 Back live at VMworld 2012, this is SiliconANGLE.com, SiliconANGLE.tv's exclusive continuous coverage of VMworld 2012 in San Francisco. This is day two, almost through second half of the day. A lot of great stuff happening here. I'm going to bring that to you live from theCUBE, our flagship telecast. We go out to the events, extract the signal from the noise. I'm John Furrier, the founder of SiliconANGLE.com, and I'm joined by my co-host. I'm Dave Vellante of Wikibon.org, and we're here with a good friend, longtime CUBE guest, David Scott, who is the C.D. Vice President and General Manager of HP Storage, former CEO of 3PAR, David, welcome back. Great to be here. So it was two years ago, literally to the day, that we were up here speculating about who was going to win the bidding war, was it Dell, was it HP? Obviously, that's kind of recent history, maybe not ancient history, but since then, 3PAR has just guy rocketed, right? I mean, at the time, you were a $200 million company. I know you can't tell me this. I've said tracking towards $600 million, maybe even more, got to get to a billion, and it's really the story of HP Storage. Well, it really is. I mean, we just came off in another quarter where we posted greater than 60% growth for 3PAR, and that's been on top of a lot of 100% year on year quarter growth, quarter over quarter year over year growth. So we're really, really pleased. We're really being able to leverage the channel and the breadth of distribution of HP, and we continue to build momentum, and that business is really coming on very strongly in the high end now. We're clearly taking market share in that high end of the sand business, and we want it to continue, but it's not the only story, because our store once technology for de-duplication and backup is also growing at a real clip, more than 30% year over year, so we're really pleased. Yeah, so actually the 3PAR growth is slowing quite dramatically. It's down to 60%. It's the law of big numbers, unfortunately. Especially when 3PAR has now become our biggest product line. It is the biggest storage array product line. You know, what's interesting is that years ago, companies would buy a storage asset. I mean, think about when EMC bought data general and it took a long, long, long time for them to figure that out, and then you've seen Dell make acquisitions, obviously HP, EMC, and others, and the industry's getting much better at integrating these acquisitions and just exploding them. You never could have done this as 3PAR on your own. I agree, and I think the smarts around execution integration are becoming more and more well adapted over time, and you can certainly see it with the integration of 3PAR. Yeah, so here at VMworld, what do you think, what's going on? What do you make of the VMware mojo, and what's HP's point of view on all that? You know, it's tremendous momentum. I mean, HP is such an integral part of kind of the overall VMware ecosystem. I think kind of 42% of all VMware deployments on our HP server platforms, obviously technologies like 3PAR or the back-end data storage, in many cases offering tremendous kind of performance, enabling people to kind of double their virtual machine density. We have other products like our left-hand store virtual technology designed for small to medium businesses and remote offices and branch offices, which are also really tightly integrated. And then in fact, the whole area of virtual storage appliances, if you like software-defined storage, is really taking off here at the show, so I was like. You know, every cube I love to walk away, and I always learn something every time we do an event, but the epiphany I had on this trip yesterday was, and you mentioned, you guys had three mentions on the earnings call prior about your success with an HP, and some of the other interviews, it's very clear that the storage equation, and we called this two years ago, Dave and I with storage is sexy, back you guys saw that front end of that wave, is still exploding. So Dave and I have been introducing this concept called data infrastructure, not converged infrastructure, data infrastructure, but the focus that data is now the centerpiece of the value proposition, everyone we're talking to is all validating that the storage component is now front and center of the architecture, not necessarily changing converged infrastructure, just leading it, so software-defined networking points to that, big data analytics that's being powered by these platforms, so I'd like to get your take on that, because I know you guys have led in converged infrastructure at HP, you organized around it, but now with storage exploding, you guys seem to be growing, it's just not just you, IBM's the same way, there's storage groups out on the side, they're realizing we got to do something with this, so they're trying to make some moves, you got, and you start off popping out like Fusion IO, so storage is at the center, so we're trying to define this data infrastructure, what's your take on that? Well, I think that's an accurate representation, I mean if you look back 20 years, storage was always viewed as a peripheral to the server world, but those of us in storage for that length of time really knew it was exactly the reverse. You were biased, of course, and it was almost like Galileo, saying, does the earth go around the sun or does the sun go around the earth? Fundamentally, I think there's a huge amount of truth to what you say, you state data infrastructure is really predicated on the sophistication of the storage infrastructure, and there's a lot of evolution going on there, not only how do I handle these kind of three big trends, the development of IT as a service, whether it's private or public clouds, how do I hand the massive explosion in unstructured information driven by kind of increasing human information, extreme data sets, or how do I move to kind of hardware agnostic based storage services in the form of virtual storage appliances, all those three trends, combined to support what is dynamic. Yeah, another buzzword on top of that that we're hearing, and being a software guy by training myself, you hear the word dynamic policy, I mean you're seeing these concepts and constructs in the architecture, so there's this need for policy based fill in the blank, I mean provisioning, dynamic this, policy blank, so how does that change the current configurations of the architecture, or does it? Well I think there are a couple of stages, in fact kind of with the HP three part product line, we realized this a very long time ago because you talk about policy based, but there's actually a step further, that's the concept of autonomic management where the system is so well integrated and is able to so well instrument it, that it can determine its own policies if you like for deploying optimal storage, and that's where kind of HP with three power platform has really led the industry in autonomic management, but below that sits policy based management where there are more alternatives, and we fundamentally believe that, virtualization certainly helps that. Absolutely. I mean we're watching low level virtualization as a trend down to the bottom of the stack, and up to program level virtualization at the top of the stack, and everything in between, it's like. It really is moving forward, and I think you will continue to see the development of that, whether it's policy based optimization of storage tiering, when that gets extended out of the storage into the server based domain, that will be a next generation. So I did an interview in 2008 with Sondra Khan Patel who's now running HP Labs, and early back then they were talking the data center operating system, so you guys are no stranger to this notion of software defined data center, and in a sense you guys have been doing a lot of R&D around it, so what's your take on that as it is now, obviously VMware's putting it out there front and center as a core emerging trend that they want to drive into taking software defined networking within the Sierra DL, SDN, and moving into software defined data center, which right now is just, I guess, positioning and direction. What do you guys see, what's the internal conversation amongst your group, because you have all these elements, you've got the networking storage and servers all together, we've covered you guys on the storage side, Moonshot, we know what's going on, a lot of optimization, so you got the tech. Can you share some color, what's going on internally around this software vision? I mean, Bethany Mayer is on theCUBE, saying that they're shipping an open flow, but seem like to be a feature, so how's that shaking out? I don't think it's really a feature, I mean, all of the kind of three major platform businesses within HP, whether it's server storage or networking, are working together to drive kind of this automated policy-based approach that evolves into being autonomic management, but we're also very heavily focused on the converged infrastructure management of IT as a service. How do you orchestrate and provision across this entire set of converged infrastructure to really reduce complexity, eliminate cost to the benefit of customers? Awesome. David, I wonder if we could talk a little bit about, shift gears and talk a little bit about innovation. I was always intrigued by sort of your path, your career path. You joined 3PAR at a time, we kind of take for granted what 3PAR's done now. I mean, it's quite amazing, 3PAR and others, but 3PAR uniquely was going after that very high-end, very demanding storage in a way in which it simplified what was a very, very complex set of processes. I mean, you and I have talked in the past about how difficult it was to actually achieve that, how much money you had to raise. I mean, you know, close to $100 million to actually get to the technology. I hate to say it was 183 million dollars. Is that okay? Oh yeah, okay, you're right. But you add in everything, right? Sure, so, but to get it off the ground, I mean, and now you're seeing a ton of innovation around Flash, and you're seeing some takeouts a lot earlier. You know, people, so you had obviously a massive exit, you saw data domain with a massive exit, and you saw now you see EMC make a move with extremely, without a product. What do you think's happening there? Can you compare and contrast what you guys and others were doing with storage virtualization, with what's happening with Flash, and you know, the amount of capital it's taking, is it more, is it less? And the whole dynamic of maybe taking large companies, taking companies out earlier, you think that's a trend that we're seeing? Help us get perspective on all that. Well, I think the whole evolution towards non-volatile memory in general is going to completely transform the storage market. Even the fundamental designs of systems are going to change, and the question, probably at the top of mind for every one of the major systems vendors, is their current software architecture, their storage software architecture, suitable to be adapted to this new non-volatile memory way? At HP, we clearly believe with technologies like Free Pass, StoreOnce, leadership technology in their own right, on modern storage architectures, we are very well positioned to be able to evolve those technologies, take full advantage of non-volatile memory solutions. There are others in the industry who evaluate that question, and you can see their answer. Someone like EMC says, well, maybe VMAX and Ingenuity is not the right operating system to take advantage of non-volatile memory. IBM makes the same decision when they buy Texas Instruments, so it's really a statement of how... Texas Memories. Texas Memory, yeah. Texas Memory. At least the Texas, I think you might have said Texas Instruments, but that would have been the one that was here. Sorry. That's okay. But it's really an evaluation of our software architectures too old to be able to take advantage of this massive disruptive trend that's occurring in the industry. And I think the answer from EMC and IBM is looking like, yes, they are too old, whereas the answer from HP, we feel very firmly, is that we're in a very, very strong position to evolve 3PAR and our StoreOnce architectures to take advantage of it. Okay, so you would differentiate 3PAR, obviously, you just did from some of the other guys because the flash startups would all say, no, we did good marketing, and I got to put all these guys in a bucket, it's bolt on, kind of like the marketing, they're going to take a page out of 3PAR and turn it around on you. Well, obviously, we're going to let the market decide that you feel confident that your architecture is suitable for these new modern flash devices and you can make them reliable. Yeah, we certainly do. I mean, compaction is a critical element of what you need to deliver in order to optimize nonvolatile memory environments. And if you think about the technology assets HP has with 3PAR leader and thin provisioning, with StoreOnce integrating both deduplication and compression algorithms, we clearly have the modern technology basis to take advantage of those solutions. Oh, I see, so I wonder if we could take that through, I mean, without divulging too much here, but so although the flash startups are bringing things like compression and you do to their primary platforms, do you see that going to primary in your portfolio? We certainly believe that as you evolve to nonvolatile memory architectures, all of the wide range of compaction technologies will be critical to improving the efficiency. But I think there's also a short-term and a kind of a medium-term difference that people also have to consider, and that is what is the future of flash versus other nonvolatile memory technologies? And it really doesn't matter what those next generation are, whether it's HP's Memrister or PCM or ST RAM, those fundamental technologies that are coming up have very, very different characteristics from NAND. And even then, some of these flash-based startups will have to make significant changes to take advantage of those new nonvolatile memory technologies as they come on board. So what do you make of VMware's new CEO, right? A head-to-head competitor and now a partner? Well, I think he was a partner first at Intel and he's the partner again at VMware, so we feel very comfortable. So that's kind of an interesting dynamic, and of course we've always said in the queue VMware's not going to, or EMC's not going to sub-optimize VMware to get a competitive advantage with EMC because the potential for VMware is much, much larger from a market valuation standpoint. But it's still an interesting dynamic and do you think it marks a change in the way in which this industry is evolving or is it just a management swap? No, I think VMware has kind of managed to create itself more than those kind of valuable properties, if you like, in the IT industry by maintaining a level playing field between different vendors. I think that's in its best interest to maintain moving forward and I think there's every evidence that they will maintain that position and we will continue to partner with them in critical areas of future development that we think can improve kind of customers' costs, their efficiency, reduce their complexity, et cetera. Yeah, you missed it yesterday, it was interesting they had the CEO panel up there and Gelsinger saying his new best friend was Tom Georgins and of course Michael Dell and it was good humor and we had Pat Gelsinger on the queue today and obviously, you know, very committed obviously to the community. But I think the VMware evolution is really going to play a very heavy part. In fact, the hypervisor evolution overall in this new generation of will finally there be an alternative model of storage where you can get enterprise storage arrays without the array, i.e. can you use virtual storage appliances like our new store virtual VSA that we kind of introduced or rather reintroduced based on left-hand technology where you have the benefit of creating on industry standard hardware of any variety whether it's HP, Dell, IBM, Lenovo, fundamental rich storage services like disaster recovery, thin provisioning, out of existing equipment, completely hardware agnostic but also very importantly, hypervisor agnostic because our new store virtual storage appliances work in both VMware and Hyper-V environments and they work at the same time, i.e. a heterogeneous environment so you can literally have mixed environments but single cluster storage-based solutions around store virtual VSA. And the reason why I think that's important is that I saw recently some data, I believe it was from an IDC study on storage and server virtualization trends and it said within 18 to 24 months over 80% of people will expect to have more than one hypervisor in their environment, a heterogeneous hypervisor solution. And that's why I think HP's position in this new world of virtual storage appliances where we support multiple hypervisors is really a strong position. Well, so that brings up an interesting point because Bat Kelsinger yesterday said in his keynote we're at 60% applications virtualized today on Intel servers where the goal is to get to 90%. That says that you really got to take away the complexity. I mean, 60% was relatively easy compared to all the ERP applications and Oracle database applications that now have to get virtualized. And presumably it would be easy if you just had one hypervisor. But that's not going to happen. So HP's role, or one of your roles is to abstract that complexity across hypervisors. That's how you add value beyond the hypervisor. And we intend to be the leader in that in storage providing that abstraction layer for those people who want software and the architectures and there are a lot of people who do. I mean, we have a store virtual VSA entire booth at VMworld here today. And the reason we have there is there's such interest after our launch and it's kind of being packed out. Effectively, there are a wide variety of customers who are interested. People who are small to medium sized businesses who want to have simple infrastructure. Maybe they just have a server environment. They want to run a virtual machine environment and co-locate applications, virtualized applications running side by side with their storage services. Perfect solution for that. They can choose their server vendor. They can use existing hardware. Remote offices and branch offices of large scale enterprises where again they really want simplicity. They don't want a separate storage device and then the server device to run their applications and storage networking between them. They can collapse it all down into a single infrastructure using store virtual VSA, get disaster recovery solutions and provisioning. And then interestingly, there is a clear move in many cloud vendors to look at hardware agnostic environments where they can build scale out architectures and leverage virtual storage appliances in one or more hypervisors to deliver their services. And so we think in those three different segments we really have a leadership position with our left hand heritage now in store virtual VSA. All designs that keep removing those layers of complexity which is what you got to do to get growth in a hug going. So, all right David, well thanks very much. We really appreciate your time and coming on theCUBE always a great guest. Thank you very much. Okay, we'll be right back with our next guest right after this break.