 Okay, we are here for exclusive HHP event here, SiliconANGLE.com, SiliconANGLE.tv coverage. I'm John Furrier, the founder of SiliconANGLE.com. We are here for a special exclusive coverage of HP's Project Moonshot, which is a hyperscale initiative around server technology. Dave, I'm here with Dave Vellante, my co-host, co-founder of Wikibon.org. Research, Dave, what's your research tell you? And then what's your take on it? Well, first of all, this is a very intimate event, right? We were downstairs this morning, New York Times, Wall Street Journal, some folks taking pictures and so, but it's a big deal. I mean, I think that we're seeing, to me, the big picture here is it's all about the consumerization of IT. We've talked a lot, John, on SiliconANGLE and Wikibon about how consumerization is really driving innovation in our industry. It used to be, a lot of things had happened in mainframes and the data center and they trickle out. Well, it's totally flipped. I mean, it's really, we've seen flash start in iPods. We're seeing ARM processors in cell phones now taking aim at the data center. And I think, frankly, HP's being very humble here, right? I mean, we're very careful. They don't want to upset Intel. HP doesn't really toot their own horn effectively. In my opinion, I think HP's very conservative. We said it. All steak, no sizzle. I mean, it's a major shift. I mean, I was trying to tease it out and again, they're like the Boy Scouts. They're humble, but they do a great job. And here's the thing, to me, this is all about one thing. The PC processor spawned the server processor side of the Intel server business, which was laughed at by the Unix Jockeys in the day. Resk, resk, resk, reduce instruction set. And local area networking evolved. That footprint expanded and that growth was just phenomenal. It was a great run up until today. And you can cobble all the stuff together from a density standpoint, but blade systems, blade system, matrix, we've seen all the stuff from HP, great innovations operating at scale. But this new approach is all about fundamentally rethinking it based upon mobile. Mobile's the new PC. This talks about our thesis of the PC is dead and Tarkin Maynard is probably jumping up and down going, yeah, exactly what we see. And I just think it's just going to be beginning. I think this is going to be massive growth. I mean, the results are phenomenal. Yeah, I agree. You know, John, at the time, when you were talking about the LAN servers and Novell, I was actually, one of the things I did was I ran IDC server business and some other businesses and used to track our guys used to track, you know, the suppliers compact dominated. They probably had, I want to say two thirds to 70% of that server, you know, Intel based microprocessor based server market, that LAN server market. Now, most of the people, many of the people we've interviewed today, where are they from Houston, their heritage is compact. They really are on top of a lot of these things. They were there in the last wave and I think they're really trying to drive. They're redefining the new wave and this new wave is about Hadoop. It's about big data. It's about cloud. And cloud is exploding. We've seen Amazon crash. We've seen Rackspace trying to hobble together OpenStack. And you know, there's just so much demand, so much engineering going on, you know, they need these boxes. I mean, hell, if you can get 280 servers and a 4U, I mean, it's ridiculous, ridiculously insanely amazing. I asked, it was sort of a baited question, is this the lunatic fringe? I really don't think it is. I think this is going to be the norm of the data center design in the future. We've talked about this regarding Fusion.io. Some have said, oh, Fusion.io, it's a niche. They sell to Facebook, you know, Apple, iCloud. We heard that amazing comment. I forget who mentioned it, because it was kind of so many interviews on it. But they said, these web companies, they don't look at servers as a scarce resource. It's the power. Everything's engineered off-power. It comes like Facebook, no doubt going to Arctic for that reason. And they have, you know, solar panels up in deserts, not operational during the day, boots up at night, Arctic during the day. They're shifting resources around the globe in what they said, follow the sun. This is the new data center architecture. It's not about, oh, we got one in Ohio and it serves regional areas. The global data center is about serving the massive cloud. And that's going to be a follow the sun, power optimized on architecture. And I said it before, these data centers are, they're like ATMs for these web companies. We talked about NICCAR, does IT matter? Yeah, maybe the traditional enterprise where you're running hundreds or thousands of apps. You're talking about, you know, a few apps, maybe one app in the case, for instance, of Facebook that is optimized and it's printing money. And so the more resource you can put into that footprint, the more money you're going to be able to print. Just recapping the news here, HP announces an extreme low-energy server technology around hyperscale based on the ARM technology. Alzada is the first go-to-market vendor and they have a lot of ecosystem partners like Red Hat and Linux and others around that. And basically it's a multi-year project and the key is that this is not about CPU-bound performance. And the thing about the ARM technology that is in mobile is that it's an instant on. You power on, you power off. So this is bringing that to service. So the ability to turn up cores, turn down cores is a key part of this technology. The web environments, everyone's going web environments. It's IO-intensive, not CPU-intensive. Diversity of applications, open source is the key. If you're writing for the LAMP stack, this product will work today. The open stack, we talked a little bit about that, sub-5 watt per core, system-level approach, attacking the whole problem. This is at the beginning of the day of a fundamentally re-architecting of the data center. Now, most people don't understand what that means because essentially they get all the benefits on their mobile device. But imagine having better power, better application performance faster to your devices. So we had five partners today in the part of this Pathfinder program, John Canonical, which does the Ubuntu Linux, Red Hat, we all know Red Hat, Calzada, which basically takes ARM processors and adds data center server class power to them and makes them data center ready. And obviously ARM, which is kind of the substrate here, the secret sauce, and AMD, which is kind of an interesting- AMD. You know, it popped in here. It's great. You know, in the essence of Intel, AMD taking an opportunity to step up the microphone. Yeah, we'll play in this game, you know. We love Intel. We love AMD. We're the Q. We love everybody. But Intel not being here is a major issue for me. I think Intel needs to be here. Well, I mean, it says it all to me, John, that ARM is, you know, ahead in the race, and Intel's playing catch up. And like you said before, they'll get there. I like the conical, the Linux approach. It speaks volumes to the fact that, you know, this is something that, you know, not a lot of people are talking about in the mainstream media, that Linux has reached a kind of a glass ceiling from a deployment standpoint that in production environments, Unix vendors are being switched out to pure Linux. And running Linux at scales requires massive support. That's why Red Hat's doing so well. And so to have this kind of architecture, this is purpose built. I mean, this sounds a lot like Larry Ellison's vision. I mean, purpose built gear up and down the stack. You know, I'm interested that he see how this plays out. It was interesting when we had Calzada on, you know, one of the more, one of the companies we didn't know a lot about a lot of people. I couldn't even pronounce their name at the beginning. They have this trailblazer initiative that the companies that they're working with in their ecosystem, Autonomic Resources, which is a cloud service provider for the government, Canonical, again, Keringo, which does object store, couch base, data stacks, eucalyptus systems, cluster, momentum SI, ops code, pervasive, a lot of the guys driving big data today, no Microsoft, right? So the interesting set of companies a little broader than the five that we see here. So I fully expect these and others will be involved. This is all the action is in the industry. Here's what I like about that just to riff off that point. This means HP's making bold moves. The old HP would be criticized for pandering to Microsoft and Intel. What they're basically saying in my opinion is we're going to go forward. This needs to get done. This new architecture, this new generation approach is good for the economy, good for the sustainability message, and it's the right thing to do. Now, the good news, there's demand for it. I mean, we're going to be at Hadoop World next week live to Cube in New York City. We're going to cover all those app builders and the web scene with big data. And those guys are all living the nightmare of the data center problem Dave with power, Twitter, Facebook, StumbleUpon. So some news that just came across, just hit our HP investors regained faith as the CTO retires. Silicon Angle blog just posted this. I saw that this morning. Phil McKinney? Was it Phil McKinney? I'm just pulling it up now. Let's see. After some flip flopping back and forth, it turns out a Hewlett Packard will keep its PC division. It was okay. We know that as an HP person. Phil McKinney, that's right. Yeah, he's been here like nine years at HP. I don't know. I mean, I've never met him. I know he's done a lot of evangelization with some of the social media people. I've never personally even met him in person. From what I could read from his blog, he's really a smart guy. My opinion on it is, is that he was more of an evangelist, not sure specifically which projects he's worked on. But it's a focused execution right now. It's clear from... He was instrumental in the POM acquisition, I believe. So I'm not sure what's on the signal that. He's an active blogger. In fact, he broke the news of his retirement on his personal blog. So, you know, love the guy. He's a blogger. So one of the things that impressed me today, John, is a lot of emphasis on the ecosystem, right? And on having partners and software developers. You didn't see that with the tablet. I mean, everybody knew that you needed apps for the tablet. But you saw a real lack of applications for HP's tablet. And they, of course, pulled it from the market. And so there's a big question mark around it. So I think they're doing this right. Well, I mean, I have an opinion on the tablet. HP tablet has got a great OS in WebOS. The WebOS had a great developer ecosystem. We covered on SiliconANGLE going back to 2009 prior to the merger or the buyout. And loyal WebOS, a senior Apple engineer told me privately in Silicon Valley that the WebOS is the only operating system on mobile that can compete with Apple. Hands down, he said, he said, at Apple, Steve Jobs and others talked privately about the fact that there's only one horse that could compete with Apple quickly. And that was WebOS. OK, so, you know, I understand the Android's rapid growth and numbers speak for themselves and the rapid rise of Android. But WebOS is a major asset. I'd push that out there as an open source project. I'd get it out there. I would not kill a WebOS. So Meg Whitman, if you're watching, and team, HP, keep WebOS. You got HP Labs here. Give it to someone who's smart. Let him play with it. Early days on mobile. Let him play with it so early that the night. I think to that point, I mean, we've heard a lot about Android being really bloated and speaks to the point of it. There's a real demand for an alternative to Apple. Android's just early. I mean, Android has been cobbled together, rushed to the market by Google. It's growing leaps and bounds. Android is that PC-like Windows environment where you've got a massive distribution through the carriers and the handset guys. So Android is rocking and rolling. You cannot deny the distribution effect of Android. And again, what developers love, they love distribution and they love monetization. That's developers love that. And any kind of stability around a platform, developers will go crazy for. If WebOS is kind of like floundering, and at some point, they just got to cut it. My thing is save it. Keep the developer community bringing into the fold. And again, the tablet stuff with HP was, they sold off the shelves at $99. Now the bill of materials might be closer to 300 or 200. So you just go to your supply chain guys and say, get this thing down to 99 bucks. Well, the fact that keeping the PC division is a big deal. You've told the story a number of times about the calculator division and how that became the distribution channel for printers. I mean, this would be an appropriate time to tell that story. Well, you know, I think you should because we're in front of. So I'm going to tell the story about it. This is, again, John's story. This is nothing. I don't think it's actually written anywhere. But behind me is the office of Bill Hewlett. Bill Hewlett was the founder of HP who wanted to have a calculator that can fit into his shirt pocket. So HP built the calculator that we know, the 15C or the predecessor. Everybody has one. We probably have one. We all had one. Everyone who's over over 30 probably had one in college. And so what happened was it became a big success. And at some point, it wasn't really making any money. So no one wanted HP wanted to kill it because the founder built it. It was his project. It was a pet project. So what they did was they essentially kept it alive and they said, well, let's just sell it through resellers and sell it to college campuses and bookstores. So they created an indirect sales channel of dealers. Barely made any money, but it kept the project alive. The founder saw his baby still out in the marketplace. And then what happened was during the mini computer crash in the 80s, and when the PC revolution that Steve Jobs created started booming, HP had no PCs. Their mini computer business was flat and dying. They were on a road like data general and digital equipment like this. And- Prime Wang, DG, Apollo, they all died. Dick Hackborn in Boise, Idaho built a laser printer. List price, $50,000. The CEO, John Young at the time, nixed it. He went out and with Canon built a laser printer for sub 4,000. OEM the engine. OEM the engine. Canon built it. All they built was the motherboard with PCL, printer control language at a Boise, Idaho. My friend Bill Murphy coined the term laser jet. That was the name. It went out the door and sold with Wangward processors. And because it was a rogue project, they had to sell it. So they sold it through their reseller division, which was barely hanging around only because no one wanted to kill the laser. Which was the calculator. The calculator. That nobody wanted to kill. No one wanted to kill the calculator product, which created the indirect sales channel. And then from that point, the laser jet saved HP. Created the inkjet, which was a build off their think jet, which is a thermal printer. Created the PCC change, the servers. And since that time, the company's revenue, skyrocketed. And an ink franchise. Ink franchise, stock splits over and over again. All because they had a reseller channel. If they had killed the calculator, they never would have had the reseller channel. HP might not even be alive. That's my story. And it just goes to show you that you keep things around just because it's not making money doesn't mean you have to kill it. So tie it back to WebOS. So the PC division, my thesis was, why would you kill the PC division? They're number one in the market. May not be that most economical right now, but you have supply chain expertise. You have people and you have integrated components. Now it all came out. The analysis proved what I was saying to be true. And you have a channel of distribution there. So with that channel, you have market power. So all you gotta do is create a good product and put it through that channel. So that could take a year, it could take two years, but they have an opportunity. They are not dead. WebOS, certainly not dead. There's things in the marketplace that could come out with a new product, that could do a partnership. You just never know. It's a fantastic case study in storage on it. You just don't know. And there's actually a calculator on his desk inside here. We'll have to get some footage of that. But it just goes to show you that, if the founder wasn't around, what would have happened if they had a board that didn't care, they would have said, oh, this doesn't make any money. Let's kill the calculator division. There's the story. And now we're at the cusp of this huge tsunami called mobile. And HP owns one of the more interesting assets. The one that you're saying Apple was more concerned about. Apple was concerned about it. And obviously, and Steve Jobs in his biography, actually did not trash HP. He was actually, he was bummed for HP. But he didn't trash, I mean he trashed everyone else. But he actually had a huge respect for HP. Obviously, Steve Wozniak worked here. Dave Packard was a mentor to Steve Jobs. HP has a huge reputation of quality, great brand in the marketplace. I think the performance of the divisions within HP are all doing well, Dave. If you look at the numbers, underneath the leadership void that's been there in the past decade, the divisions have been doing extremely well and the executives in charge of these billion dollar businesses are actually developing great products. We're hearing this announcement here today. So with Meg Whitman at the helm and Ray Lane helping with the duties on the services side, I think you're gonna have a compelling turnaround. I think it's not as hard as people think. I think the formula is there. And again, if they can develop that next product, they need a laser jet. They need that killer product to come out. And so that would be the mandate that I would put down to the team. And you see what happens. Well, we're seeing a glimpse of that today. I mean, we've talked a lot about ESSN and we've been very high on ESSN in the networking business. Obviously, the storage business, the three-par acquisition, which was a huge acquisition, two and a half billion almost that they paid for that, but three-par has doubled its revenues in a year. Look at the three-com integration, Marius Haas, who we were talking about, yes. Bethany Mayer's running that now. And now we're seeing a real innovation on the server side with this announcement today with Calzada and ARM and others. So we had guests coming up. We had Stan Williams scheduled. He was a senior fellow here at HP Labs. He's a total geek. He's the director of the Nano-Electronics Research Group. He's not here. So Angelina Jasper.