 Live from Chicago, Illinois, it's theCUBE. Covering Veeamon 2018, brought to you by Veeam. We're back at Veeamon 2018. You're watching theCUBE, the leader in live tech coverage. I'm Dave Vellante with my co-host, Stu Miniman. Stu, always great working with you. Bruce Shaw is here as the Senior Director of Global Alliances and Industry Solutions at NetApp. Great to see you, thanks for coming on theCUBE. Thanks for having me. So I got to start out with NetApp. I mean, we have followed NetApp for decades. You know, from the very beginning, back when I was at IDC, Stu, you were probably still in your mother's womb. But you guys are back in a big way. I mean, for a while there, it looked vulnerable. You took advantage of the Dell EMC merger. You're gaining share again. You're growing. Stock prices up. There's a spring in your step. What's going on? Well, a lot of things are going on. I think we've had a lot of leadership additions to the company. Henry Rashard joined and took over as the CSO of the company. We've got a new CMO in Gene English. But, you know, more importantly, a lot of the areas that we were late to the market in. And candidly, we've admitted we were late. We didn't have a good flash story a couple of years ago. We've been very aggressive with flash over the last 24 to 18 months. We're now the fastest growing flash service or storage provider out in the market. And we think we'll exit this year as number one. In fact, we think that's the current course in trajectory. We're very happy with where that's going. The FlexPod partnership with Cisco was great this past year. We had a record year in converged infrastructure, which was a down market. We picked up about 13 points of share, according to IEDC. So a lot of the cylinders are starting to fire. But the one that is probably the biggest and the most shocking for folks is three, four years ago, the belief was that cloud was going to kill, on-prem storage for companies like NetApp. And I think the one thing that they did right ahead of the curve was they embraced the cloud. They've got great partnerships with Google, Amazon, the hyperscalers, and cloud strategy in the business that drives the company there is the fastest growing part of the company. And Anthony Lai runs that team and it's doing an amazing job. So explain how, and you're absolutely right, many most, frankly, myself at times felt that way. Explain how cloud is a tailwind and not just a one-way street into the Roche Motel. Oh, well, it's, you know, there isn't an enterprise today that isn't thinking about cloud in some way, shape, or form. Now you have prognosticators on either side saying it's all going to the cloud or something less than that. But the truth is when you look at a strategy like ONTAP and the ability to move your data, whether it's on-prem or to the cloud and manage it through our data fabric story, that's where NetApp really starts coming into their own. And I think, again, that's where we've been able to take advantage and it's not just having it one way or the other or being good just with the hyperscalers or good with the guys that want to be secure because most companies do a hybrid story and they want a bit of both. Well, I think the one thing that I would observe about NetApp and follow the company for many, many years, which I think gives you an advantage is NetApp really has always had storage services in software that were largely decoupled from the hardware. And that allowed you to get into cloud early. You think Stu? Yeah, absolutely. And Bruce, you know, we're here at Veeamon and their message sounds a lot like that to me. So maybe help explain, we were just talking to VeeamCMO is when you hear some of the descriptions of storage services, software, multi-cloud everything, NetApp and Veeam sound alike. How are they complementary in, you know, maybe where do they bump against each other? Yeah, well, you know, we both compete in the same market which is storage. So of course there's areas where we're going to compete with each other. But we are very complementary in terms of the story and the markets that we serve, right? NetApp is incredibly strong in the enterprise. Veeam has a great commercial channel presence. So from a route to market, there's a lot of complimentary stuff we do with each other. Price point in terms of where we hit the market and the things that we go after. We have a lot of opportunity where there's not overlap to help each other out. To the point there now, the relationships evolved over the last four years where we're actually doing OEM of each other's products. We've got our E-Series, we just announced yesterday that we're OEMing with these guys which again is targeted at exactly those markets. And it's, you know, the story between the two that we're both at our core, not hardware companies, not storage companies, but data management companies really is where this starts to come together and play well. And the fact that they're mutually supportive of each other makes for a really strong value proposition for the customer and the channel. Especially the guys like the service providers or you know, hybrid cloud providers. It's a big time story for them. So you're growing with the partnership with Veeam is growing. You got a combination of trends that become tailwinds, but then you've got execution. Can you explain what are those tailwinds and what's the execution ethos with the partnership? We are a channel only company for all intents and purposes. I mean, I don't know what the number is now, but you've always been very, very high. Yeah, I know. So, you know, we look at the businesses that we drive and channel is at the core of what we do. So when you have a tailwind like, you know, where we are with Flash and the growth there, the channel partners are making more money. The programs that are coming for them, we're not taking business that they're doing today and pushing it towards the cloud. Again, we're talking about the story that's transitory between the two. So for a lot of the channel providers that are out there getting in the market, that's a very powerful story for them that it's not a competitive business. We're not going to try to create our own cloud service to take away from them. We want to help them as they migrate between the two. All right, first one of the other areas we're spending here and a lot about at this show that I think lines up with that app is the analytics and AI. Can you maybe talk about how that, you know, ties into the products? Yeah, I mean, you look at a lot of these markets, like AI, like analytics in terms of what companies are doing, it sheds off a tremendous amount of data, right? And that data is at the heart of what they want to analyze and go through. And when they bring those things to market, the goal is how I quickly move it from where I'm capturing it to where I need it. And ONTAP does a really good job of doing that in terms of being able to take the data to where they need it, whether it's at the edge or whether it's back at the core of the company so that you can actually do the real work with it and gain the insights that drive the business. Bruce, what's the resale agreement that you have with Veeam? Can you explain that? So we have Veeam on our price list. Our sales reps can sell Veeam, can be compensated for it, vice versa. They can absolutely hook in and drive with NetApp and now that we're getting products like E-Series where their product is embedded on ours that only strengthens that kind of motion. So for a NetApp sales rep today, if they have an opportunity where Veeam is needed on it as part of the offering, it's absolutely in their wheelhouse to go sell it and they get the same level of love and attention from a quote and comp standpoint that they would if it was NetApp only product. So this is kind of an interesting innovation that Veeam I think has been out in front of. And I don't know how they do it, Stu, but I think Veeam understands the lifetime value of a customer and is willing to make, put equity, sweat equity into a deal as part of a partnership to make it transparent to a partner sales force. And that's innovation in business model. Absolutely, we're very proud of our sales force and the work that they're able to do. We view ourselves as kind of the last big enterprise standalone storage company that's out there doing this. And I run strategic alliances and some partners integrate really well with our sales guys. Others, it requires more work. To your point, Veeam has done a superb job at identifying how and where they play with our folks and getting together where we go to market together. You know, it's interesting. We used to, several years ago now, ask the question, can NetApp remain independent? We've seen all these independent storage companies going to go away. Used to have this conversation with David Scott at three par all the time, you know, EMC itself. Sure, wasn't able to maintain it. And then NetApp got to the point where it was almost too big for an acquisition. And although, you know, stock price was down, NetApp was the rumor of M&A more than any company I could think of in the storage business. But now you're seeing sort of antithetical to what most people expect. It's kind of like the cloud we were talking about before is storage companies emerge. You know, Pure was the first one over a billion since NetApp. Yep. What are your thoughts? And what's that? I wonder what the, you guys must talk in the hallways about that whole, the dynamics of the industry. It seems like it's still a viable business model to be best at. It breathes. It's very viable. So I took over running these strategic alliances at the beginning of January. And yeah, my dance card's full. I can't believe the number of folks that are calling up wanting to partner. I think we've gotten much more mature in terms of how we view the market and our ability to get strategically with other companies to be successful. And there absolutely is always going to be a place out there for a best of breed story. So, you know, customers want the best technology that they can get to handle their business needs. And if we partner with great partners, whether it's Veeam or others to provide that for them, I think the viability of NetApp only gets stronger, not weaker. It's interesting because you got, now you got NetApp Pure, Nutanix, soon to be Veeam is billion dollar independent, you know, pure play companies in the storage business. Isilon couldn't get there. Data Domain couldn't get there. Compellent couldn't get there. Three-par couldn't get there. Left-hand couldn't get equal. I can go down the list. They never were able to reach that escape velocity. And maybe it is cloud. Maybe cloud is that weird tailwind for people who can figure out how to take advantage of cloud and hybrid cloud. Your thoughts? Yeah, I think it is, number one. I think also the companies that you mentioned at various times. And I mean, I'm a hardware industry dinosaur. I've been around forever. A lot of those companies you talk about, the difficult moment from them was, hey, we're a storage company, now we want to add compute. Or now we want to go into this part of the market that put them at odds with the guys they were partnering with. You know, George, our CEO, has been absolutely maniacal with his vision. Of our path forward is in managing data, period. Whatever form that takes. We don't need to be a compute company. We don't need to be a networking company. We want to be a data company. And I think how that then drives the decisions, whether it's partnering with cloud, whether it's going into new markets with HCI, even if it's things about transforming the legacy data center. From traditional data center and how it's managed on-prem to something that's all flash driven and much more efficient and much more programmable than it was in the past. So it's easier to administer. Those are the areas that we can go innovate. And as long as we're partnering with the right partners out in the industry, that makes us a very good, viable destination for the customer without worrying about, well, do we have a compute node? Are we in the server business now? Or are we suddenly in the switch business? Those are things that they're not even on our radar. Yeah, I mean, you guys are in a unique position from that standpoint. You're very large now. You're the largest independent storage company. So everybody wants to work with you. You don't bump up into these adjacencies. It's, and you can make bets. You can place your chips in areas. And whereas some of the startups, there's tons of innovation, but it's really hard to hit that escapade. The amount of resources that you need, the money you need for promotion, the talent war that's going on out there, the go to market challenges, the partner challenges. So you guys are in a pretty good position right now. We really are. And I think we've actually done a lot of the restructuring work internally to continue that and capitalize on it. Probably the biggest change, which outside the company, most folks wouldn't notice immediately, is that we moved at the beginning of this year to a three distinct business unit structure, where we're focusing on three parts of the business to go forward. And we've got our cloud business unit, which is driving into, as I said, the hyperscalers under Anthony Lai. We've got cloud data center, which is more of the new technologies like HCI and Converge, and object storage technology like Storage Grid. And that's right now, that's an incredibly fast growing business for us. And then of course we've got our traditional storage software infrastructure business, where we make products like E-Series and modernizing the data center, which is primarily driven with this transition to flash. So you've got three BU's now that are maniacally focused on the different areas of the market where we see here's an immediate opportunity in flash. Here's a slightly longer opportunity in things like hybrid cloud and HCI and Converge infrastructure and a much longer term bet was how does the cloud really become a piece where we're managing between all of those? So it lets us be a lot more nimble between it, it's almost like three sub-businesses where we're going to market. Yeah, Dave, and actually that aligns perfectly with the research we've been doing now for over five years from server-sand and true private clouds. You've got the hyperscale, you've got the transformation locally and spanning those two and then you've got that transition to the traditional. Yeah, I think it's a sound strategy and it'll serve us well in the years to come. Here's obviously a lot of noise about artificial intelligence in the marketplace. You've got some companies trying to position to be the platform for machine intelligence or artificial intelligence. What's NetApp's point of view on that? Well, certainly we share some of that, but again, I think at the end of the day for us, it's much more important about fine, wherever I'm capturing that artificial intelligence is not likely to be the place where I'm going to do a lot of the analytics and work on it. So it really does come down to, am I moving it up to the cloud to do that work? Where am I making my big insights? Where am I mining through it? And then how am I relating that back, whether it's at the edge or whether it's at the core data center? And again, we think with ONTAP, with the partners that we're going to market with for AI, for ML, IoT, that's the difference maker for us at the end of the day. It's not that we're just another storage company storing the telemetry data off of a car for AI. We're putting it into a format and a form that's usable quickly and efficiently real-time where Tesla can go make a decision on the car right now, not days, weeks, months from now. All right, Bruce, well, hey, thanks for coming on theCUBE. Really appreciate your time and good luck. Enjoyed having me. All right, thank you. Great, thank you. Good to see you guys. All right, keep it right there, everybody, we're back with our next guest. You're watching VeeamON 2018. This is theCUBE.