 This is SiliconANGLE and Wikibon's exclusive coverage at HP Discover live in Barcelona, Spain. I'm John Furrier, the founder of SiliconANGLE. I'm John McCose, Dave Vellante. This is theCUBE, our flagship program. We go out to the events and extract the signal from the noise. This is our end of day wrap up. Our final report, we're going to actually put together our editorial independent coverage analysis and commentary around HP Discover. Three days of amazing interviews. We went wall to wall day one. We interviewed all the top executives. We interviewed all the thought leaders in HP, except for Meg Whitman, Bill Vecti, and George Kedifa, the EVPs. We're all tied up. Did not make it on theCUBE. Want to make note of that, that we did not have a chance to talk to those folks. So our comments and editorial here will be a reflection of the fact that we didn't get a chance to ask them any direct questions. But what we're going to report is a synthesis of the compilation of all the interviews we've done here at HP Discover. Dave, another great HP Discover, our fourth event. We're going back to 2010, where actually in Barcelona we brought theCUBE to a small event and a lot's changed here. So let's start, Dave, a little analysis of this report. We're going to file here via the CUBE interview around HP Discover 2013 in Europe. Let's talk about first the show and then the marketplace. So what's your take on the show so far in terms of the size, the people, your vibe, and just your observations? Well, John, anytime you're analyzing HP as a whole, it's like talking about the government. I mean, the government is not one government, right? You got the executive branch, you got Congress, you got the House, you got the Senate, you got the various agencies, and they all have frankly different agendas, and that's kind of the way it is with HP. Now, Meg Whitman's challenge is of course to stitch all those together and create a vision and her vision is that new style of IT. But nonetheless, you've still got a lot of divisions that are driving revenue, driving cash flow, ideally driving profitability that largely have distinct strategies. And where there are synergies, you could see HP stitching those together, and that's what I think HP Discover is all about. It's a big show. Take IBM for instance. IBM doesn't have a single big giant IBM show like this. They've got a zillion little IBM shows. HP's the exact opposite. They don't have many smaller shows. I mean, the Vertica show for example, the Vertica user conference, but generally speaking, this is the big customer event for HP. And as they say, it's very fragmented. Meg, I think put forth a good message, but I think just the show itself underscores how many different parts of HP there are, how big this organization is, and how complicated it is. Yeah, I think Dave, one of the things that's clear on the show here is that it's got a good vibe. I will have to say for my three days here on the crown, and talking to the customers and the HP folks, is you can see the entire layout of HP. If you want a holistic picture of what the organization's about and try to want to understand how confusing it is. It's a monster. It's a huge company, I mean monster in kind of a big way. There's a lot of different areas of expertise, but they lay it all out here, and it's a chance for customers to come in and weave around. I got to say, I do agree with Bill Vecti's interview on Bloomberg that to be here, you got to feel it. And it does feel different. It feels different than Frankfurt. You can almost feel the upgrade in energy, the upgrade in optimism, a spring in the step from the key executives, the business unit leaders that we've talked to, the senior vice presidents of HP. So clearly, there's no cloud around HP. I have to report that there is really no cloud. Now there are some things we will get into. I do have some commentary on some of the management and some of the approaches I think, maybe a little bit orthogonal to what I think they should be doing, but overall, a lot of things are snapping in the right direction. They are vectoring the right course. We'll get into that quickly. So first update, let's just discuss the marketplace. So competitively, the marketplace is pretty dynamic. You got cloud, mobile and social, big data, security, themes we've been covering since 2009, and obviously converging infrastructure and storage. You've been covering for a very long time. Big data taking center stage. When you walk in, it's about big data and cloud. Two of the main anchor concepts here is cloud and hybrid cloud and big data with vertical and autonomy. What's your take? What is your view? Let's see, hyperscale, obviously, on the good bridge of our side and a bunch of other stuff around data center, obviously storage. What's your take around the market? So, let's talk about the market. So the market's huge, right? It's trillions of dollars in revenue every year. Now, when HP made the decision to go out and acquire Compaq and acquire EDS, I mean, essentially said, okay, we're going to play in all markets, hardware, software and services. HP's deeply embedded in every market segment. So I've said a number of times over the past several years, HP has to shrink to grow and that's exactly what's happening. I don't know if you picked up on it, but when Antonio Neary was on, he mentioned HP is a $125 billion company. Well, it just ended its quarter and it's actually a $112 billion company. So it's shrinking before it can grow and I think it's got some ways to go here. And that is, you said there's no cloud around HP. There is a cloud in terms of growth. Companies like IBM and HP, the cloud around them is they're not growing. And if they're not growing, their stocks don't do what their shareholders want it to do. But there are some mega trends out there today that we have to highlight and was brought up in multiple occasions. That is mobility and security. Right, so let's highlight though. So you got hyperscale, you got mobility, you got security, you got big data. Cloud. You got cloud, right? You got social. So let's break those down. We also heard of developer focuses. For the first time I've heard HP talk about developers with big data. And we're going to talk about that when we talk about HP software business in a little bit more detail. But let's start at the high level. So let's talk about cloud. For years HP talked about cloud. You know, it was private cloud. We go back to 2010, we were at VMworld. You know, HP had a good story around private cloud. Back at that point, John, you remember, one of our talk tracks was the gap between cloud service providers and infrastructures of service providers like Amazon and what's happening within IT. And to close that gap was going to be a lot of work. And that gap has closed somewhat. But you see companies like Amazon, driving revenue, driving growth. Yes, granted from a much, much smaller base. But we're talking about a significant, meaningful three and a half to $4 billion IT company that's growing at 50, 60% a year. So that is a big challenge. So they don't have to make a profit. You've made this point before that they have a profitless business model. They don't have to make a profit. They can keep growing and their stock price keeps going up. Companies like IBM and HP, they throw off tons of cash. You know, they miss by a penny and their stock drops. So that's, they're hampered by that. So thinking about cloud, that's a growth opportunity for HP. For years they talked about it. They bring on a guy like Sargillai and they start really shoring up their cloud. So I would, I have to say, I'm now convinced that HP really has a cloud offering. I wasn't certain until really mid this year that they had a cloud offer. So Meg Whitman said, we want to focus on the business that we need to be in. That's a main emphasis or maybe she didn't say, I mean we heard her someone say that she said that. I can't remember specifically where that quote came from. But that's essentially focus, the focus issue. So of the, of the mega trends in the marketplace, Dave, which ones are they betting on? Which ones are they kind of like just playing with from a high standpoint? That's a great question. So you agree they're betting on cloud? Yeah. No doubt. So IBM talks about cloud two. They had to go out and buy soft layer. In your view, John, does HP have to make an acquisition like that to get into the game? Or are they in the game? On the cloud side, I think they're in the game. I would agree. I think after, when I was talking to Biri Singh, who's no longer with the company, he was doing God's work for HP. I mean, basically with no real budget and support, he basically brought them into the open stack conversation. And there was a kind of a crew of people working on that cloud model. Amazon was already making strides. And then when Sargillie took it over, they really had a fragmented offer. We even asked Dave Donatelli, which we'll talk about in a minute, his no longer his role in the company. But when Donatelli came in, we asked him, he's like, I'm not in the big data. That's a different division. So you had silos of big data. And Sar emphasized that yesterday and cleared up that positioning. But it was so confusing. You had no idea who ran cloud. You had silos competing sales. It was a disaster. I felt it was confusing and hard to understand and articulate. Because in the enterprise, the cloud market is different per customer. It's not as easy as saying, here's a public cloud. So since Sargillie took it over, we've seen the vector change. They are absolutely in the right direction. This build and operate and consume segmentation is really the right approach. Cause you have decoupled functions, highly cohesive elements around it. Clearly they have a cloud. Now, can they do acquisitions? Yeah, I think they should do some tuck-unders to get some acquisition help from talent. But more importantly, I think OpenStack is a big opportunity. I think HP could be the modern leader in moving the ball down the field with cloud. Right now, I just don't feel that HP has the leadership on the cloud. Mainly because Dave, they were been weak on execution and traditionally in the past, Sargillie brought an execution focus and the Martin Fink appointment is interesting cause he's going to nail the open source. That's great for the OpenStack positioning, but I don't think he's had an operating role. So the risk for HP right now in the cloud is they have to continue to execute. The execution focus for the cloud is paramount because you got DevOps, you have a rabid growing enterprise market that wants building block, cloud and OpenStack-like functionality. HP has the tool chest across the company to augment the cloud offering. So yes, they do, they have cloud, it's real. They can augment it with a lot of things internally and externally. So yes, on the acquisition, no major acquisitions, but I definitely would not buy- It's not a do-over. I would definitely not buy a soft layer. But it's not a do-over. No, it's not. Okay, I've been buying soft layer, but I was not high on that. I don't think that was an answer. I think that's going to be more like Rackspace, and I think Rackspace has not succeeded in the OpenStack foundation because they're not a software company. So a hoster turning into cloud is okay, but I just don't think they can go the distance with the muscle when you're talking about software to find data center. And I think the strategy is good. I mean, Margaret Dawson articulated that strategy as essentially the bumper sticker on it is hybrid, hybrid cloud with customer choice. And I think that's a good strategy. Now, it's like Jerry said on the Cube at AWS re-invent when he came back from Hong Kong. Jerry Chen, he said, OpenStack's trying to be all things to all people. Amazon's trying to be one thing to all people. So HP essentially is trying to be all things to all people. That's harder, it takes longer, but it gives you a bigger market opportunity. Let's talk about the business now. Business, the model of HP. Obviously the staying in the printer business and the PC business is great. The enterprise business is enterprise group now run by Bill Vecte. It's looking good. We're looking that over from Dave Donatelli who's no longer leading up that effort. We'll talk about that in a second. And then you have a lot of variety of excellent innovation around moonshot and technology to convert systems by Tom Joyce. We heard from that really good. That should start competing with VCE and Oracle. Big, big integrated systems, large scale, big customers. And you got Antonio Neary heading up servers. And you got Aussie's three par kicking butt. So let's start with Meg Whitman, let's start at the top. Meg Whitman's keynote was very clear, Dave. It was essentially a recycled speech from her previous keynote. You know, the captain on the bridge, be on the captain, see the bridge, love that message. She had a picture of Bill and Dave which I liked. But she added in some new things in here that I wanted to highlight. I thought it was very interesting. HP makes it, we back it and we service it. That's a message that she had. The foundation is being poured for a new style of IT right now and they want to be in that. And she highlighted storage obviously and moonshot as a futuristic, kind of a window dressing but real trend for HP. So I think Meg is doing a good job of consolidating and mobilizing the existing team. I think one of the things that we've pointed out in the past as the opportunity for HP, Dave, is the management team. You know, with the late Leo Gaum when Meg came in, she had to do two things. One, show up the financial structure of the company, get the finances in order and appease Wall Street and target a Wall Street target audience as well as fix the products and get the management team pulling in the right direction. It's clear that's happening. So I think she's doing a good job on that. Well, I'll just add to that, John. Personally, I think HP's got upside. I mean, look at the stock price that's been hammered. It's a $112 billion company trading it, valuation of just over $50 billion. So it's got a long way to go. To me, HP should at least be trading at one X revenue. At least, so I think there's a lot of upside there. I think HP, I would be a buyer here. I would be looking for opportunities to buy HP because I think that the cash flow, their ability to pay down debt is very good and their customers love them. Now, I'm not buying them for growth. I'm buying them because they've been so hammered and they're like a dog of the dow kind of buy. Okay, so, but I think there's upside there. Let me ask you a question. What do you think about the management team? Meg's management team, again, just to reiterate, they were not here on theCUBE. We did not have a chance to talk to Bill Vecti or Meg Whitman in person or George Kadifa, but George has been on theCUBE before. So we have a good feeling of what we understand, what he's working on, what's your take. And then we've also talked to all the SVPs here on theCUBE, Dave, but what's your take? Does Meg have the team to pull it off? Where are the strengths and where are the weaknesses and what's the opportunity? Well, I think we're seeing that team is in transition. I mean, we know Dave Donatelli's on theCUBE a number of times. We know what he is and we know what he isn't. Dave Donatelli's not a big slick marketing guy who's going to get up and give this great presentation, but he is going to make sure that guys get done. He's going to kick some ass and he probably ruffled a few feathers. So I don't know in the enterprise group what that transition's going to look like. I don't know Bill Vecti, I've only met him once. He, as you say, he has not come on theCUBE. I thought he gave a great keynote. I thought he was very smooth. And frankly, I think he gave a better keynote than what I've seen Donatelli give in the past, but keynotes were not Dave Donatelli's strength. Execution was Dave Donatelli's strength. So I think, I hate to say it, but it's an analyst thing, but it remains to be seen. I just don't know the answer to that in the enterprise group. George Kadifa, I've always been very impressed with George Kadifa. I like the fact that he understands the software business. He's got software chops. He came from Oracle, but I still do not like what HP's doing in the software. We want to talk about that. Let's talk about Dave Donatelli. Okay, so he's been on theCUBE multiple times. He's no longer running the enterprise group. He's in some strategic projects, which means looking at some new ventures. Yeah, that's what it means. He's not here. So Dave Donatelli is in here. He's doing start-ups, right, or acquisitions. And he's not doing acquisitions. There's no official word that he's out yet, but you know, everyone's speculating. No, I'm just saying, they just put him in a box, right? And said, okay, done. I mean, let's be honest here. We're independent media. I mean, we can say that, right? Even though we're on the home court. Let's stick with the facts, right? The facts is he has not left the company. But he has created a really awesome group of people. And one of the things I want to ask you is, do you think there'll be any fallout from the Dave Donatelli being removed as the head of the enterprise group and Bill Vecte taking over? Do you think it'll be a Vecte bringing in his own crew? Do you think, what's your speculation there? What's the feeling? I think it'll be a mix. I mean, I think you got to give Donatelli credit for the focus on converged infrastructure. When he came over from EMC, he was focused like a laser on that whole converged infrastructure piece. Now, of course, he had his hands tied for a while because EMC's law department's like a P&L. They kept him from working in storage for a while, but you knew he was going to bring that whole converged infrastructure vision to HP. He did, they're executing on that. You're seeing that now run by Tom Joyce. You're seeing it growing at roughly 50% per year. That's working. So if I were Mag or I were Vecte, I wouldn't mess with that. Now, there's other pieces that you're seeing. You've seen some changes in ISS. We saw Antonio Neary here taking over from Mark Potter. You're seeing some adjustments there. Mark Potter, they'll move the CTO, which is a great role for him because he's technical. Yeah, he is technical. So they're turning some dials. They're not throwing away the baby with the bathwater. They're saying, okay, we need to optimize that piece of it. HP is a fault-tolerant organization. You unplug one person, it's not going to crash and burn, but if you start removing a few other pieces, then you're going to have some slowness. So I think Tweaks are, I fully expect that Vecte's going to make some Tweaks, going to bring in some of his own people, but not going to do a rip and replace, because again, when Donatelli came in, I would say them in the Enterprise Group, they didn't have a really a storage strategy at all. They didn't have a converged infrastructure strategy at all, and they had a big server business. So the server business is still big and still market leading, as we heard from Jim Gontier. The storage business, the three power acquisition, that was under Donatelli, and that is, as I call it, the gift that keeps on giving and networking, even though, of course, Donatelli didn't buy the networking group, put Bethany Mayer in charge, and that seems to be having a market impact. So that's my take, John. What do you think is going to happen in that group? Well, Dave, I mean, I try to read, you know me, I like to try to read the tea leaves, right? So like, oh, they're closing the hall down, we're wrapping up here at the show. So here's my take on HP. If I put myself in Meg Whitman's shoes, okay, I'm looking at, I took over an HP that was battered, reputation-wise, okay, off the turn at the top, solid company, we've always said HP has a zillion assets, R&D was cut by Mark Herd, and then there's also some weird maneuvering when Leo came in, okay, clean all that up, that's done. When you come in, you have to move the battleship. As I said in my blog post, Meg Whitman is the captain on the bridge of their own ship with the team, and you got to get the battleship moving in the right direction, job one. So you have to assess the team around her. But like I said in my analogy, when we opened up the segment is, I use a downhill extreme skiing example. If you're in the middle of a shoot and you're downhill skiing, you got to pick your spots because if you miss your turn, you're going to be off the cliff. So I think Meg Whitman, if I'm in her shoes using my skiing analogy, I'm saying to myself, okay, I'm going to pick my spots. I got to make four turns over five years, four major moves. Hit that spot, pivot to the next turn, move down that black diamond slope because she has no room for mistake because it was already fragile to begin with. So walking in her shoes, Dave, I think that's the issue. So, and she's doing that. You can really see in her maneuvering that the feedback is from the people. She's an enabler. She's not batting people over the head. She's not driving instilling fear in them. Very collaborative. You got Antonio Neary, great guy. That's the new culture you're seeing in HP that she's in fostering, teamwork, cohesiveness. At the same time, performance. And we'll talk about their performance. So the thing that she needs to focus on, in my opinion, is not risking the turns, not slowing down. For instance, you got cloud, you got software defined networking, you got three par. These are areas, for instance, I think are killing it. You got Vertica that's doing great and autonomy is going to be infiltrated throughout the organization. These are major assets. If you slow down that integration by making too many personnel changes, then that's dangerous. I think that could slow down the recovery. So I'm watching for what happens with the management team. I personally think the management team that she has right now is very solid. I think it's a great group of people. George Kedifa, we've met with and interviewed multiple times, solid guy, understands the marketplace, knows the M&A market, Silver Lake, Oracle, great executive. You got Martin Fink, open source guy, knows technology. I'm not sure he's got a lot of operating experience, but you got Sargillie, right-hand man, who knows cloud and has turned the cloud around and has continued to execute. You got the enterprise group that now Vecti's taking over for showing growth off the hangover from the Donatelli. That group is solid, great business. They have a historical track record, 70 years of market share leadership and servers, great group. When you look at the moonshot, you look at the pod, these are emerging markets. And you get the printing business is printing money, right? Still continues to print money. So I think HP overall solid may cannot wait. So the question is going to be on Bill Vecti, what does he have up his sleeve? This is a new role for him. I think he's kind of cutting his teeth into a big operating role, Dave. So Vecti's got a great team of direct reports. We'll see what his moves are. And again, if the politics don't get too hairy, I think HP is definitely going to clear the runway on this turnaround. I think that is going to be the key thing. Management personnel, how they handle some of these market forces. Right now it looks great on paper. The execution looks good. They just got to keep moving the ball down the field yard at a time and look for the big passing play for a new black swan-like product. Yeah, I mean, I got way in there. So, I mean, as I said, from a financial perspective, I'd be a buyer of HP here. If I were a customer of HP, I'd be very comfortable buying the company's technology. I trust HP. It's notable the customers want HP to win, John. I mean, they were clapping in the audience when Meg said, hey, HP is here to stay. Having said all that, and despite notwithstanding your, I think, very positive outlook, HP's got to do better. They got one business that's growing, the enterprise group, and it really ain't growing that much. It's 1.8%. I'm not happy with the performance of the software business. HP's software business is between $6 and $7 billion. It's like 6% of the company's. It's declined 9% in the last quarter, year on year. And of course, the reason was there was a big deal from GM last year. Take the deal out there, still shrinking 2%. This is a $6 to $7 billion software company. It's got to grow. I mean, even Oracle's growing. It's not growing that much, and Oracle's $37 billion company is growing. So they got to do better. Let me ask you a question. And the challenge is, in my view, they don't have the portfolio. They got Vertica. Love it. Big data piece. But Vertica by itself is not big enough. Exactly. Autonomy, interesting what they're doing with autonomy. We heard Robert Jung say, we really haven't figured out the business model yet. So I'm not happy with their software group. And I've been saying this for a while. They've got to do much better. Is George Kadeep for the person to turn it around? Yes, but he's somewhat handcuffed because as Meg said to me last year, at the analyst meeting, we're not doing any acquisitions until we pay down the debt. So if you're in HP software group, you're somewhat handcuffed. I think they've got to get to the point where they have to start making small acquisitions that are more strategic. Let's come back to that. I want to drill down on the performance of their business. Obviously, the only thing that was up was enterprise group. But again, that was under Bill Vecti. But again, he just took that over from Donatelli. So we're going to give Donatelli the credit for that run, that run of performance. But Vecti's still yet to be proven. Do you think that HP understands the market realities? Based on the interviews we've had here today, we had the CIO on who explained to us the internal architecture. I do. I think HP is very much in touch with the market realities. I don't think at all HP has its head in its sand. I mean, they have a huge customer base. Those customers give them great feedback. So I think they know what's happening. So check the box on the market. They get the market. They get no question about it. The conundrum is. Products. And they're so penetrated into these markets. It's hard to grow. And number one, number two is, under her, they really starved R&D for a long, long time. You can't just fire up that engine again. So that's why I keep talking. That's why I found the think move interesting, right? Martin Fink coming over from labs to cloud. It's a sign of- Explain what you mean by that. Why is that interesting? Well, okay, so he's running HP Labs, which would need his Prith Banerjee left. So he took it over. You got a lot of focus on there. Meg's saying she's doubling down on R&D. Why move a guy who's new in the position with a vacuum on that position? No one's stepped into that role. Why would we move them so fast? Obviously cloud is a strategic and operating objective for them P&L. Why would you move them over there? He's not really have a lot of operating experience. Is that to kind of kind of watch over the store? Is there an actual specific role? Have not heard that yet. I want to dig into that further. And when I talked to Martin- So you know, I got to jump in again. So Meg says that she's doubling down on R&D. R&D declined sequentially. Now, the decline is a percentage of revenue probably stayed roughly the same. I don't see HP doubling down on R&D. I mean, they're spending a few billion dollars a year on R&D. Okay, so they understand the market reality. I think they got to spend more. And the problem is they can't because they got to pay down their debt. They can't pay up here. So that's when you say to the understand the market, yes, but they've got some shackles on them that's just going to take time. That's why Meg says I need five years. She's right. She's smart. I would definitely say this. I would try to do it in three and say five, do it in three, right? Everyone wins. But here's, we'll see if that happens. But, you know, under promise over deliver, she's smart. And then we've got to, we've given her props for that. Okay, so one, they understand the market reality is check. Two, business performance right now needs to increase. So if you take the analogy, Dave, to go back to that point. If it's the battleship that moving very slowly, throwing off a huge wake, nuclear engine underneath. You know, now it's time to crank the engine. Do you think that HP has a straight and narrow right now? Are they on the right vector? Or is the battleship still aligning up? So the question to you is twofold, straight and narrow? Has it moved on the vector? And is it just run and crank the engine? Or they still got some aligning to do? No, the latter. They still got some work to do. I mean, half their business is PCs and printers. 50% of their revenue. Am I happy with their PC business or you? I mean, I know. So you think that right now. Meg's on CNBC saying PCs are not dead. The desktop is not dead. Okay, great. So you're saying that they're not yet in the right businesses? They're in the right businesses, but they don't, they're not, you said, are they ready to just throttle the engine? Yeah, meaning they've picked their markets. Now it's execution time. Yeah, they're still, which markets are they meeting? They're still pairing the dead wood, right? They're still, we're still in storage. We're transitioning from the EVA, moving to the three-par model. In PCs. That's a product discussion. Okay. Are they on the vector markets that they're picking? They're in every market. That is true. I mean, what market are they in? So to me it's a matter of getting the portfolios right and having the right, you know, product suite. So let's talk about the process. What are the successes to you? What's the number one group that you point to is the shiny bevel for HP? And what are the, start stack ranking the groups? Looking at the numbers, looking at the technology portfolio kind of combined. I would say, I would say, because my issue again is growth. How does this company start to grow again? That's what everybody wants to know. So I'm not actually going to, my surprise some people, I'm not going to talk about the hardware infrastructure piece. I think it's big data. I think what they're doing with Vertica, Vertica, you said it the other day, they got Vertica for a song, $340 million, which maybe at the time was, was, you know, everybody thought it might have been a little expensive. That is a crown jewel. With Vertica and Haven and Autonomy, they can actually participate in that big data business. They can compete with the vision that Maritz is putting forth with Pivotal and what Cloudera is talking about and others. I think HP could really demonstrate from some growth there, but as you well know, the key to that is developers, John. And that's where I think you have a lot of expertise and a lot of value add in this discussion. Don't you agree that HP has to appeal to developers in order to tap that opportunity? You know, Dave, I feel strongly that this, the new HP, if they want to be software led in all aspects of their business, because this is the future. They're seeing the commoditization of hardware and with their value, with their supply chain, I mean, their supply chain advantage, HP could be in any market with a device. And that means wearable computers, sensors, every single market. They have a huge competitive advantage on the supply chain. Okay, so right there, they can compete at any given moment in any market. So that being said is key. No problem building a device. Software drives everything. So from whether it's from the dorm room to the board room and everything in between, HP can be successful if they have the right software architecture. So to me, they cannot do that without developers. Amazon and the cloud, the two biggest areas for focus for HP, cloud and big data, are emerging for HP. They're getting organized. Sargalize got the right track with OpenStack. We heard from George Kedifus folks here in autonomy that they're going to, and Robert Young-Johns, they're going to have developer conference. Vertica has a user conference, a quasi developer conference. They need to look at the success of Amazon in the public cloud and how developers look at that as a great resource. Cloud is the new development get data. So with big data, you're seeing guys coming out of college that are programming in Scala, Python, C to Java, across the board. New coding is going down across all platforms. So if they want to be, they want to win from the dorm room to the board room, HP has to win the developer market. Because if you hear about what's going on, whether it's IT service management, software defined data center, big data, it's all about ecosystems. You're seeing the platforms in all sectors of HP. And platforms need developers, and they need ecosystems. In order to compete effectively, you need to have an ecosystem. And that's why I'm watching some of the management actions and the press releases in their conversations because I'm looking to see which managers at HP get the developer ecosystem across the board of the company. And I got to tell you, I would give them a good C minus on this area. And that's a gift in my opinion. I don't think HP does a good job with developers. I don't think they would grade themselves a tire. I mean, this is a new realm for them. We heard from Robert Young-Jong yesterday that they're just starting to think about executing on this strategy. So- They need to be A plus with developers. Because now the enterprise, we asked- Yeah, in order to tap that market that I said was number one, you said what's number one, they've got to be A plus with developers. Here's a kid that I'll share with you. That's one of my happiest moments on theCUBE this week. We interviewed the CIO, the global CIO of HP here on theCUBE. And I asked them one question and I really wanted to know. And he answered it beautifully. And this really to me is a proxy for the marketplace that we're just talking about. The CIO, I asked, hey, you know, you've converged Zillion data centers down to seven or a few data centers and rationalized Zillion applications down to seven. Small numbers. I said, how many developers do you have on staff? He said 3,000. And I- You said, that's an army. That's an army. It was a direct quote. That is the blueprint of success for all enterprises. HP does have a kick-ass IT enterprise system. They've had it for years. Going back to the 90s and the 80s, HP has always had great IT, just like EMC and IBM and others. But HP in particular really has a great internal. Now you go back and ask customers, how many developers do you have? I guarantee you, it's not armies. They're outsourced to the hilt. And so what they're all doing now is they're all building in DevOps and CloudOps and big data. So you're going to see enterprises start to adopt more developer focus internally. And I think that new in migration of developers in the enterprise is a huge opportunity for HP. And that's what, that's to my point about, they have to be in A. And it's okay to start right now. They can still win, because it's not the same game as Amazon. So developers is going to be a strategic weapon. And quite frankly, let's look at the management team. Who knows developers? So you asked me about that. So that's the software. And then obviously the other piece is this whole converged infrastructure. But I see that as evolutionary. I think if they don't do that, they're just going to lose market share. The other thing I want to talk about, you asked them, are they in the right markets? I said they're in all markets. They're actually not mobile, right? And you know more about mobile than I do. But what's your take on HP's mobile strategy? I mean, Meg's talking on CNBC, the desktop is not dead. That's not the message that a company of HP size needs to be sent. That is not the message Meg Whitman should be sending on CNBC. What Meg Whitman should be saying on CNBC is we have an unprecedented advantage with supply chain. We could be in any business we want. Right now we're taking care of our knitting. And that's what we're doing. And you see in the financial performance that she's just out laid out on her earnings, which is great. I mean, you're seeing a stock buyback. You're seeing a dividend. This is a signal to the Wall Street that look, we have a financial future that's not going to go under. And that's a message to customers. So I got to give Meg four stars on that one. That's a really, really good thing. Once you get the financials up, then it's the straight and narrow in the markets that you're competing in. And that's what we were just talking about. I think they do not have it. Mobile is table sticks. I think HP has to absolutely be in mobile with a product because you're going to see, bring BYOD come out and look how fast Samsung Dave got into the market. And I said this with Android, you don't have to be liked as good as the iPhone, just be almost good enough. Be a second player, third player and then shoot for number one. HP has the muscle to build the kind of device to do that in terms of expertise in manufacturing and supply chain. Question is, do they have the management that understand it? And I think that's the issue that we're looking at here. If they can get guys who understand mobile first, they can do a great job and then get mobile out, internet of things, wearable computers, sensors. If they're going to be in the big data business and want to have an end-to-end edge device, they have to be in that business. So to me, it's like, until I see a mobile device, HP's just going to be this enterprise company. And then if I may, back to EG, I mean storage, you got three part of the gift that keeps on giving. Tracking their flash, tracking their all flash array piece. We heard some positive news from customers this week. Let's see that keep going. I like, I was impressed with Bethany. I mean, I think she's doing a good job, Bethany Mayor. What are your thoughts on networking? Again, that's a business you track closer than I do, but... I think Bethany is humble, executive, but she's very talented, right? So what they've done with SDN is they have an unbelievable business. It's a great business. They have three common there. But the software-defined networking, they've had core competency and open flow going back to the first ones to ship the port. She's moved the ball down the field. I think she's in a good position. She's a great executive. She's going to continue to do good. It's not that complicated. Network virtualization, accelerate development, ship product, no-brainer, and make sure all that software and that expertise goes up into a converged system, which is Tom Joyce's organization. Because the real game changing action will be hyperscale. So I think that's a big thing for her. Yeah, okay. And then, you know, the last thing, the last comment I really wanted to make here was, I come back to my R&D thoughts. I mean, HP, industry leader, they can be the muscle for OpenStack. I just want to see, when I hear Meg say, we're doubling down on R&D, I'm not buying it. I mean, IBM's a smaller company and they spend twice as much as HP does on R&D. So I want to see more there. I want to see more coming out of HP Labs. I wish she would dam the torpedoes with Wall Street just a little bit and spend more on R&D and get back to HP's roots, which is in vent. Okay, so I want to ask you one final question and we'll end this segment here. What is the one thing or things that you've learned from HP as we unpacked, as like brain surgeons suck knowledge out of their guest's head and shared that with the world on theCUBE. What did you walk away with? What new information, either validating something that you've been thinking about or other new information for Dave Vellante that you observed or acquired? I would say this. Here's how I would say this. As long as HP has competent management in place, it can't lose, in my opinion, because it's got great products. It's in every single market. It's got the financial muscle and its customers want HP to succeed. That, to me, is critical. You don't always see that. A lot of cases, a lot of times in the IT business, when a company falters financially or otherwise misses a product cycle, the customers walk. HP customers are very, very loyal for good reason. HP puts the customer first. They've always focused on the customer and so that, to me, is confirmation of something that I've always felt very strongly that HP won't lose as long as its management sets the ship in the right direction. Okay, my observation is a couple things on the company side, one, I think that Bill Vecti inherited an amazing enterprise group. I think the enterprise group is really poised as it's kind of coalescing together. I think that group is going to continue to do well. I think as long as they don't screw that up, the performance should be good. So if it starts falling off a cliff, then I'm going to get nervous, but I think the enterprise group is poised for success. Given the focus, given the market, I think they're in a good position. So that's why I ask some of the questions around the server. On the cloud side, I think Sargillai has turned that around. I think that's going in the right track. I think getting into OpenStack in a big way and leading the industry and continuing to add on and be a player in the cloud is great. And then autonomy, I like autonomy is doing, augmenting into Vertica is not the main headline player, but getting their capabilities infiltrated throughout the organization. And Robert Young-John said that they want to just get this out there and get it into all the different product groups. But that being said, Dave, two observations that were validated here for me. One, old is now new again. And what I mean by that is systems programming and the old systems days of computer industry is back. If you look at the architecture of the hybrid cloud and big data, it's basically an operating system. So the stuff that we were learning in the 80s and computer science is now back, but on a completely different distributed scale, you got open source weaved in there. So old is now new. It's seen the same paradigms all retrofitting in notification, network management, all being played out on a whole different paradigm, but same concepts and paradigms. The second thing is on the big data side, everyone talks about business workflow, business process improvement. You see some of that stuff with autonomy. I think people are really missing two aspects of data that I didn't hear much from HP on. I think it's an opportunity. One is machine data and human data. So the three data sources, machine, business and human. Everyone focuses on the business. What validated from here is Robert Young-John's comments that they're focused on both machine, business and human data. And I think the human data is an area that's going to really play into social media, internet of things, new data source. So I think that's going to be a new phenomenon that's going to continue to fuel the unstructured data side of the business. So old is now new, machine and human data will be a big part of the fabric of computing. So to me, I think HP is in all the right markets there. I think they're poised for success. Enterprise is looking good. Cloud is on the right track. If they can nail the OpenStack equation, they should do that well and continue to add developers on that, that's great. That's a big bet and then a good one, right? Okay, that's the final report here of HP Discover. Again, I give this show a very solid, good grade. Give it a good A minus, Dave, because one, I didn't see some of the props I wanted to see. I didn't get a chance to see. Talked to Meg Whitman or Bill Vecti. So that was giving the A minus on that. But overall, great vibe, good energy and great conversations. I think the best Discover we've been to. Yeah, by far the most energy, most relevance. The message in the story was pretty solid. So that's it, that's the live coverage. It's a wrap here inside theCUBE. I'm John Furrier, the founder of SiliconANGLE. This is Dave Vellante, my co-partner here, co-host, co-founder of Wikima.org. It's a wrap from Barcelona, Spain. We'll see you in our next CUBE visit.