 Live from the Fiat Barcelona Grand Villa Compensator in Barcelona, Spain, it's The Cube at HP Discover Barcelona 2014 brought to you by headline sponsor HP. Here are your hosts, John Furrier and Dave Vellante. Welcome back to Barcelona everybody, this is The Cube, my name is Dave Vellante. Jeff Carla is here, he's the director of HP Converged Systems and Chris Swan who is with AVNET, he's a general manager and looks after the HP business. Gentlemen, welcome to The Cube, it's good to see you again, nice to have you on Chris. Alright, so let's talk about Converged, it's a channel angle here, which was really interesting. I remember when Converged first came out, the channel looked at it like, hmm, what does this mean for us? So take us through sort of where we're at, Jeff, with Converged's infrastructure. Where's the market at and then we'll get into the channel. You know, it's an exciting time around here, around Converged. You're right, we've been on a vector for six years around Converged. Converged infrastructure, now Converged Systems for a little over a year, a year and a half. The market is growing phenomenally. In a world where maybe bare hardware servers are flatter declining revenue, we're seeing 33, 35% kegers. We're moving from a $5 billion TAM to a $15 billion TAM in little as two years. So Converged is alive and well and the only reason it's alive and well is because the business efficiencies that it's delivering businesses of all sizes and the agility that it's enabling for customers to deploy applications and services. Yeah, so now I remember when we first looked at this, there was interest in many segments to give me a single skew. Give me a piece of infrastructure that I can just pop in. And a lot of the channel at the time said, whoa, wait a minute, that's going to strike at the heart of my value proposition. Connect all this stuff. I make it work. Anybody's servers, anybody's storage, don't do that to me. But the market's changed, Chris, hasn't it? Well, it's changed a lot. It's probably changed dramatically right now because when you look at Converged infrastructure, as Jeff was saying, there was a lot of collage, a lot of smorgasbord of vendors putting other vendors' parts together. So as the channel or the VAR community added value, there wasn't consistency. And how could you dictate a business outcome without really having consistency and hardware? And so I think what we've evolved to from Converged infrastructure down to the HP Converged Solutions is we have consistency in HP. HP is going to bring you a solution that will allow the channel to take something to their end user, to the ultimate end user and give them agility, flexibility, and predictability. Whether it's the hardware components or the services components or how they eventually run an application on it and manage it. So where we started six years ago to a bunch of parts thrown together that looked real good and cost-effective to today, where we have very, very well documented, well integrated components that can drive business change. But you and your partners could make money doing that integration because it was complex. And a lot of that complexity is getting stripped away. It's getting tested in the factory. But you seem excited. So square that circle for us. So how have you transformed your business and your value proposition to accommodate that change? Well, let's hit it direct on. The value of the partner community and the value of Avid as a distributor or as a partner at HP is not just putting things together. It's solving business problems. If we're not helping HP and an ISV solve a specific business problem or allow the end user customer to focus on a business outcome, not on hardware, then we're probably off target. So our partner community is moving rapidly towards piece part assembly, tweaking to how am I working with an ISV? How am I looking at cloud? How am I looking at backup and recovery? How am I going to take the edges off the corners for the end user partner so they can very quickly evolve their business forward? I would say, you know, kind of kudos to Avid. They bring together competencies and capabilities that are none or what our customers need to get over the hump of dropping in gear to solving their business problems. I view Avid and the partner community as an extension of our reach. So us together is merely working as one to solve these customer problems. So you guys have an announcement of the Converged Systems 700. It is a single skew product that you guys at Avid are going to be providing. I think it's actually available through you guys first. Yeah. And the beauty thing, you know, we were sitting here one year ago announcing, I guess, and then it was Sharks and Converged Systems and we've learned a lot together. The last year we've learned our customers want a little bit greater flexibility in the configurations. They may want to actually use an alternate top of rack switch within the configurations. They want greater flexibility within the configurations from small, medium, and large. They want greater reference architecture around things like BDI or Link for SharePoint. That's what we're announcing this week here at Discover. And Avid is our primary partner for delivering this flexibility and allowing it to come through Avid. So when you say alternative top of rack, you mean more granularity? Alternate vendor. Alternate vendor. I mean, we're really branching out to include not only all of HP's proven and tested technology, but we're actually offering some level of expansion to non-HP based on the customer feedback that we've been getting. The Converged Systems 700 accommodates some diversity. It will be accommodating some diversity in a control fashion. It's a flexible configuration with limited... And then folks like Avid can bring it together as one skew to deliver it to all the installation on site so we can do some customization or limited flexibility within the configuration. The storage volumes now. There's 100% increase in the ability of adding blade servers now. There's roughly 300% increase in the amount of storage you can have. So you have much more... Is that one really, really fixed configuration? You've got a variety of choice points along a continuum of flexibility. Okay. A lot of people would call that a reference architecture problem. No, you're not going to react. So you've got to explain the difference. That's right. Well, this is delivering as a system. It's delivered with an integrated product to care services. It can be value added with some reference architectures or some specific usage models. We're also announcing a VDI reference architecture with our great partner Citrix that's proven, built on the Converged Systems 700 on how to deploy Citrix's end desktop to allow 5,000 VDI users at a phenomenal price per seat point. All right. So you've got to weigh in here. Yeah, I'm going to. Sure. A reference architecture, to me, doesn't really... doesn't really typify what we're trying to do here. We are going to deliver Avnet in the month of January. We'll deliver fully integrated systems, 700 systems to our partner community. In that integration, there may be customization required. So we are going to then turn a specific configuration to our end users in 7 to 10 days. So there might be that nuance of ensuring that the configuration meets the end users' architectural needs, speed to market, without going through the complexity of reference architectures. It also continues to allow our partners to add value where they want to add value in that they help integrate, migrate that technology into that environment. But we are very excited to be the first distributor and the launching partner with HP to build and integrate in North America to start and pan HP in the near future. Okay. So if I understand it, there's an all HP configuration. Right. Which is out of the box, boom, go. And then there's some level of flexibility that you're going to allow in the configuration. Let's talk about where is that flexibility? You said top of the rack switch? Right now it's a top of rack switch. Other flexibility within HP is the three-part storage. You want an all flash array in your purchase from 700? We've got you covered. You want to change the spindle size. You want to change the memory configurations, the processor. You know, limited flexibility within the configurations and then alternate choices around the top of the rack switch. Okay. Yeah. I would just add to that what I've really enjoyed about HP's innovation here is they haven't drawn boundaries. There's not a boundaries here what's in and out of scope. They want to solve the end users situation to make sure that we get an HP footprint. Oh wait a minute, but compute is out of scope, right? You're not going to be throwing Dell servers in this thing, are you? We don't have a goal of displacing a Gen 9 at all. But right now we are not, there's nothing that is out of bounds. So more importantly is that you look at OpenView and the other technologies that are being announced in Barcelona. So why would you stray away from HP would be the better question. But we're keeping everything in bounds because we want to make sure that HP starts laying those footprints across these environments. I mean too much flexibility defeats the value proposition of the infrastructure, right? Exactly. Too much flexibility also you have a bag of doorknob. You say hey, you put it together. Then you're back to the DIY approach. That's why we're taking a calculated and strategic plan on how much flexibility in the offering and it's best based on the customer feedback. The applications, the workloads, the problems they're encountering. So we are increasing the envelope for some flexibility configurations leveraging our partnership with that and have to deliver that. Is Do-it-Yourself still your biggest competitor or is it other converts plays? Do-it-Yourself is still the majority market out there. Clearly there is a lot of converged players out there that we are targeting as well. And the only way we can target successfully them is have a better experience, deliver a better experience around the workloads for your efficiency. But Do-it-Yourself is still a very, very large chunk of the total available market. So why would people do it themselves? I mean there's got to be a good justification but maybe it's just too hard to get off of the processes. But I mean in concept, if I were a CIO I wouldn't want Do-it-Yourself. What are customers telling you guys? Well, one, in Do-it-Yourself we're seeing a vast array of Do-it-Yourselves. We've got how many different CI solutions out there. So then users are getting inundated with options. So I agree with you. As it's CIOs making a decision and they're going, they're grabbing their heads and saying, stop, all I want is a business outcome. And I guess we're HBs turning the clock back a little bit and saying let's go back and figure out what you really want. If we have to put it in a top rack, okay, let's make sure it integrates nicely neatly into your network. Let's make sense. Why wouldn't you use a three-part? Why wouldn't you use a Gen 9? You cannot come up with a good reason, why not? So let's go back to what you're trying to solve. What is the business outcome you're looking for? What is the total cost of ownership? Some of these other coalitions are starting to run into a new roadblock. What's the thing that will cost year four? Year four, when your first three years of maintenance agreement runs out, what are you going to charge me? I would challenge my competitors to answer that question. So as that CIO starts to look at the total cost of ownership, business outcome, the do-it-yourself, or the build it as you want, starts to go to the side a little bit. And that's where I think HB is not saying no, but saying follow me now. We have got the right strategy. We've got the right formula. Okay, so what I'm hearing is the channel wants the flexibility, understands the value proposition of converged infrastructure. So you guys have sort of compromised on how much flexibility in order to preserve the value proposition. We're getting it right? Very good, very good. Okay, and I presume this is coming from your partners. My part, yes. We have probably right now 40 or 50 in North American gauge partners around the converged solutions, a product family. And they're very excited about the opportunity with us integrating the product in North America. For a couple of reasons. A primary one is really just a speed to market. Right now, coming with a seven to 10 day delivery to a product is a key differentiator. And we will start to deliver those in the end of January, as well as then starting to look at how do you customize or look at them to a specific workload? So let me make sure I understand what's in my converged infrastructure. So it's compute storage and networking. I get that. Hypervisor? HP OneView, our management construct for managing the converged infrastructure. So compute storage and networking management. And hypervisor and beast. Which hypervisor? Well, of course we support Microsoft and VMware. And we extend through our management capabilities HP OneView integration into vCenter as well as into systems there. So we're extending the reach of the infrastructure management and the automation not only into those partners but now we're also announcing the extension of it into HP software and our operations analytics portfolio. So now we've even got a new add on extension that you can drop on top of HP OneView that allows you to seamlessly pinpoint, predict to actually prevent problems from occurring in the infrastructure. All through the open API that HP OneView delivers. Okay, so Hyper-V or VMware OpenStack? Coming in the future? Yes, definitely. So you'll accommodate OpenStack? Definitely. We're going where the market is going. For sure. And what about, so where do I, I'm just trying to understand where the lines are going. How do I back all this stuff up if I got 4,000 virtual machines? We have a variety of backup offerings, if you will, some of our own. Some through partners such as Veeam and others. So we're really providing disaster recovery backup, burrock, we would call it. Choices, again, customers are looking for different ways of actually doing the backup. So that's opportunity coverage? Well, and also the three-part family has now gone, converged infrastructure optimized. So they have backup tools built for converged infrastructure. So what you're seeing as we've talked today about all these different aspects of converged infrastructure, each business unit inside of HP is focused in on how to best utilize their technology and drive it towards converged solutions. And so three-part has now got converged, specific strategy. You're seeing open view backup strategies that are all optimized for converged. So again, what we talk about this, HP is attacking it from all angles. And I don't see many competitors that are coming out like this. So whether it's backup, whether it's virtualization, whether it's hyper-converged, these are all areas, HANA and HP is attacking straight on. Yeah, so I was going to ask about the specific solutions. So you guys have obviously gone hard after SAP, Dana, in particular. Yeah, we're doing great in that space, especially with IBM and their decisions. Yeah, we're doing great in that space. You mean IBM's decision to sell its X86? Exactly, right. Okay, so that's open. You got it. You don't have, at this point in time, if I'm correct, an Oracle optimized solution. Correct. That's one of the areas that we're looking at. Oracle majority runs on HP gear and we're working on some potential reference architecture approach on top of our merge system 700. Yeah, I think that would be a great opportunity for you guys to think about all the effort that DBA puts into having to worry about performance tuning and managing infrastructure when he or she doesn't want to do that. Exactly. Of course, we're tight with Microsoft, whether it be Link, SharePoint. Yeah, so you've got solutions for Microsoft, right? Yeah, definitely. We've had those for a while. SQL, as I mentioned, VDI. VDI seems to be a popular use case. It is. In all of this. Why is that? Right. And maybe you can talk about traction you see there. Exactly. I'll address it. You can answer it as well. From a VDI standpoint, we've gotten over the hump in the technology of graphics, performance. We've gotten over the hump of what through the multi-core processor and the larger memory footprints to be able to post more and more and more desktop images in SQL. Of course, that's driving the cost per seat down. Experience-wise, it's now achieved a common experience you may have with your desktop or your laptop. So that was a key enabler of getting the acceptance, if you will. VDI as a performance, as an alternative to the standard desktop practices. Did you know anything? VDI, I look at it from my channel partners' perspective. VDI, cloud, big data, all the different applications. Our partners are looking for different entry points into a customer. So as they go in there to try to find out the business problems, how the customer's going to handle their desktops, their mobility, their cloud, whatever area of their business, that's where we're training our partners. We're making sure they understand what the end-users are saying in their business and their drive to change their business and become more competitive. So today in VDI, a lot of our partners are looking at how to optimize those desktops, how to optimize other areas of their business. So again, it's less focused on hardware, more focused on business outcome, whichever flavor you pick, and that is the evolution of the channel right now, becoming that business workload expert. You mentioned, Chris, hyper-converged before, so we saw the Evo rail announcement at VMworld, which got a lot of attention. But customers I've talked to, they don't see it yet, so it's created a lot of buzz in the marketplace, which is probably a good thing for you. I wonder, how do you view that announcement, how do you guys play, and what has it done for your business, because you can't really get it today? Well, first and foremost, our announcement was around two different offerings. One, our partnership with VMworld and Evo rail. The second one was an HP IP version around store virtual. So it's our own VSA technology. So we've got two distinct flavors, and the beauty of that is the initial feedback and reaction has been tremendous. Over the first week of the announcement, we had well over 1,500 inquiries, just on understanding more about that ability to get some not-to-see pricing. What is really resonating with our customers is the simplified install and support. So someone that's just a virtualization IT manager or administrator can take this thing and deploy it. It has storage policy built in. You don't need specific SAN and SAN administrators. It's all built in a nice, sweet, single package. Being able to integrate through the user interface, IP addresses, your license and registration, you'll get this thing up and running and scale it, scale the cluster as you need it. So that's a win-win. Huge is a simplicity thing, and I actually think the experience that comes around the world of hyperconverges is to extend through the enterprise as we move forward. It is the new experience that is the bar for us to move through the entire enterprise and the way we design and deliver products in the future. Well, I think that's the bottom line here. You guys are bringing sort of the hyperscale model into the enterprise. Most enterprises don't have a zillion PhDs running around like Amazon and Google, so they need you all to help them. Is that a fair assessment? Well, it also amplifies... Think about what Jeff just said. I'm going to provision and bring up another hyperconverged box in 15 minutes. Self-provisioning. What value is the partner or is distribution going to bring in that environment? The value we're going to bring is identifying when hyperconverged fits in the right application or in the right customer set. So it goes back to understanding what the roadmap is for that customer or where that customer is. So it's getting away from speeds and feeds and hardware, it's getting into business, understanding business... And I can have that conversation around the Converged System 700 with you, Chris, starting in January? You sure can. Actually, you can have it now in December where we're going to start doing budgetary quotes this month and then we'll be in full production in January. Alright, so if you've got a little budget flush money hanging around to your end... Yeah, let's go. Thanks very much for coming on theCUBE. Really appreciate it. Good update, a lot of excitement around Converged Infrastructure and hot new market space that we've been covering here on theCUBE for a while. So thanks very much. Alright, keep it right there, everybody. We'll be back with our next guest right after this. We're going to hit the keynotes and we'll come back here for more interviews live from Barcelona. This is theCUBE.