 Live from Las Vegas, Nevada, it's theCUBE at HP Discover 2014, brought to you by HP. Welcome back to Las Vegas, everybody. This is Dave Vellante and this is theCUBE. We're live at HP Discover. theCUBE is SiliconANGLE's live mobile studio. We go out to the events. We extract the signal from the noise. Today we're going to be talking a lot about servers. Last night we saw the Apollo announcement. We had Antonio Neary was presenting to a number of customers unveiling the new HP HPC system. We're going to have some moonshot guys on. But right now we're going to talk about enterprise server solutions. Rick Lewis is here. He's the vice president and general manager for the HP Enterprise Server business. And Paul Durzan is here. He's the vice president of product management for the enterprise server group at HP. Gentlemen, welcome to theCUBE. Thank you, thank you very much. So Rick, we were talking last year at HP Discover. You guys reorganized. You brought ISS and BCS together. Streamlined the organization. How's that going? It's going great. We've been able to consolidate our efforts and focus on the enterprise customer. What we're finding is enterprise customers still have high-end needs, mission-critical needs, but they're changing the way, the things that they're buying. And what it's allowing is for us to bring the right elements of technology into creating solutions for that enterprise set of customers focused on them. We're not forcing them into a specific choice of anything. What we're doing is bringing the best technology and they can consume it however they want, whether it's our Unix platforms, our nonstop platforms, our blades platforms with x86. We create it for the enterprise customers and make sure it's the right product for them. Well, the server business, like many businesses, but the servers in particular are a horses for courses business, right? I mean, you've got to have, it's workload dependent, workload specific. Yes, x86 is a dominant platform within the enterprise, but it's not everything for everybody. So I wonder if you could talk about that trend a little bit and why is it that you've got different products for different workloads? Yeah, I mean, we always talk about we want the right compute for the right workload at the right economics and really different customers by different things. They have a different price point that they want to hit and then they have a different level of scalability, availability, et cetera. For some customers, that involves x86 and we have those solutions and for other customers, it's still our itanium product platforms. We make sure we have that right spot for that given customer and we try to figure out what that is and then above all, we provide them choice so that they can help figure out what we'd like to be right here and we make sure the right product's there for them. Yeah, I mean, there's overlap. Obviously, guys like Joe Tucci always tell me overlap is better than huge gaps, especially in the fat middle. It's maybe okay to have gaps on the edge, although things like Moonshot, you guys are doing filling those gaps and I know that's not under your group, but I wonder if you could talk about that dynamic a little bit and I mean, do you agree with that, that overlap is better than gaps or do you see an opportunity to go whole hog, focused in the server business? How is that affecting your decisions? Yeah, I think we have both. Overlap is a good thing. Like I said, we have mission critical customers who buy our itanium processors with the HPOX value proposition on them. We have mission critical customers who run that on x86 with Linux and it all depends what's your needs in terms of availability, what's your needs in terms of scalability and over time, we've continued to bring more capability to the x86 market. There is a trend in that space. There's no denying that and we're making sure that we're at the leading edge of that trend so some of our new introductions around mission critical x86 platforms are the Hawks codename platform which is really the heart and soul of the CS900, the Convert Systems 900, which we just announced last week which is our codename HANA Hawk platform that's really a specific appliance to serve the HANA market with huge scale up and mission critical requirements for in-memory database technology. So there's an example of, there's overlap, there's x86 in a mission critical market but it's very specialized in that we're the only company that can do that level of scale, that level of reliability for HANA platform. And what we find is a lot of larger customers actually want that choice, right? They may not deploy just one type of compute platform, they may deploy multiple of them and they're looking for a vendor who can actually provide that whole portfolio instead of having to try to go and piecemeal different vendors and different support call numbers across their enterprise. Well the obvious question there then Paul becomes management, right? Yes. So what is HP doing to unify the management around those multiple platforms? Yeah, so I think, I'm very excited because HP OneView is a great way to bring together the infrastructure. So we announced HP OneView last year and one of the things with HP OneView is it's going to give you the ability to start to manage that infrastructure. The starting point was really with HP Blade System. And when you combine one view and HP Blade System we've fundamentally changed HP Blade System in my mind. Over the last year, what we've done is we've upgraded the chassis, we've upgraded the blades, we've just recently announced the virtual connect 40 gig module that not only gives you 40 gig uplinks but it actually gives you 20 gig downlinks. And the important thing about that is customers who are interested in convergence, they have the ability to take eight gig fiber channel, 10 gig ethernet and actually converge it without performance impacts over a 20 gig link versus having to try to fit those two in a 10 gig link where you may be impacting performance. So these are some of the innovations we're bringing and virtual connect was kind of the last piece to bring everything together and it fundamentally changed the game, fundamentally made HP Blade System easier to work. And what it also did is it brought what I'll call a new architecture into existence. So when you kind of look at the two key architectures out in the industry, you know, there's on one hand there's a hierarchical architecture where every blade, every compute node touches one point. And when you're in a hierarchical model, two things happen. Number one, when you touch that one point, it has the potential to touch everything underneath it. And number two, what also happens is hierarchy begets hierarchy. So you start to get managers of managers and managers of managers and managers of managers. What we've done with OneView is we've brought everything together into a single system. We've brought all our management together into a single system and it's federated such that you can manage it as a whole, just like in hierarchical model, but it gives you the advantage of not propagating errors throughout the whole system. And so this is a big fundamental change we've made. And then there's other orchestration layers that you might connect to. Is that right? Whether it's a v-sphere or an open stack layer. That's a great point. So when you look at OneView, it's built on open APIs, REST APIs. So you have the ability to integrate it into a higher level functionality. And what we announced here at Discover is we announced that OneView not only manages blade system, but it also has the ability to create volumes and zones in three part. So now you can go into OneView, you can create your virtual cluster, you can create the volumes for that cluster and deploy that cluster. In HP, it used to take us 2.5 days to do that. We can now do it in 2.5 hours. So you get huge efficiencies by being able to start to manage your infrastructure and deploy that infrastructure. So that's horizontal across the product lines. That's horizontal, exactly. Storage, maybe networking fits in there as well. And then also up the stack. Yep, so now you can take those higher level orchestrators, such as Puppet, for example, and use those to start to integrate into, through the APIs of OneView, get the profiles and the configurations for that infrastructure. So that DevOps person who's creating those Puppet profiles doesn't have to actually write the firmware for the server themselves. Well, I wonder if we can talk about what's going on inside the guts, if we can, sort of for a minute. It seems like you have, so there are a lot of trends going on. Obviously, virtualization, the ascendancy of virtualization is well known now. Every customer we have on, so we're 80% virtualized, whereas 90%, 70% virtualized, a lot of virtualization going on. So that's consolidating physical resources. You've got Intel, Jam and Cores, trying to keep up with Moore's Law with new approaches. So you've got this seemingly multiplicative effect on IO, whether it's Moore's Law, virtualization, IO, et cetera. How are you handling that? You mentioned before what I think I heard was sort of an ethernet and fiber channel play, as I don't know if that's a converged network adapter, but what's happening under the covers to deal with that escalating IO effect? Well, yeah, just like you said, when we announced the VirtualConnect 40 gig module, it's both adapters and it's a switch in the back of, it's a VirtualConnect switch in the back of the chassis. And again, what that allows you to do is start to get the bandwidth you need, because as you said, we're seeing in virtualization environments the need for large bandwidth in these east-west traffic. So we are seeing this acceleration of the size of fabrics and we're seeing the acceleration of ethernet increase. And as people converge, they want to not only converge, but they want to make sure when they converge they don't sacrifice performance. Rick, I wonder if we could talk a little bit more about converged infrastructure and what that means to your business. On the one hand, you could say it's evolutionary from the standpoint of it's natural to start to bring these components together. And the other hand, you might think, wow, it's somewhat revolutionary because you see what's happening in the hyperscale markets and you see that leading into the enterprise and you see, talk about hyperconvergence and things like that. What does converged infrastructure mean to your business unit and then how do you sort of interact with other parts of HP to take advantage of that and not hollow out your core of your business, frankly? Sure, yeah, converged infrastructure is something that HP was at the forefront. In fact, we coined that term several years back. So we've been thinking about this for a very long time. We've been developing products that are driving that convergence and we're really proud of that. And in fact, we're uniquely positioned versus our competitors because we have all those pieces so that we can converge. We can do things like one view that supports storage, networking, servers, cloud, et cetera. So that's a really strong point for our company. But back to your question, does it have any effect on the BU? It only really enhances the value of our products. They're better together, right? We plan on continuing to provide best of breed components. So whether it's networking, storage, servers, whatever, we're going to do the best products in those individual spaces and then it's going to be even better when you bring those products together because you take advantage of all of the synergy across our products and our management tools where you can run your entire infrastructure with the same tool, no hierarchy, no extra things. It's all the same from plan to implementation, same tool, very simple. What if we could talk a little bit about the competition? Sometimes at these events, people don't like to talk about the competition but customers talk about the competition all the time. They're trying to make decisions and they've got relationships with vendors but they're interested in technology too. So my first question is what do you make about IBM getting out of the X86 business and selling that business to Lenovo? Any comments or thoughts on that? Yeah, for me it was unexpected. I didn't expect them to go there. At the same time, it's very important to the industry because we're watching the trends as I said and X86 is becoming more and more important to my enterprise customers and their mission critical needs as well as their scalable available kind of needs. So watching that happen, I think has been a good thing for HP because wherever our customers are on that journey, we can serve them with the same customer, same relationship, same world class TS services on top of the whole package. It's really a good thing for us and being the number one player in the X86 space in that server space means we're healthy, we're growing, we're investing, we're not looking to get out, we're here for the long term and we're going to continue to thrill our customers in whatever technology that they'd like to do to implement their enterprise. So it's good for you, is that because of the, I mean, I know talking to many, many channel partners of IBMs, they were freaking out in the first quarter because it killed their pipeline. Yeah, we don't mind that. We don't want those channel partners to be freaking out but we have a lot of those channel partners that are calling us in the same way. Well, you know what I'm talking about. Yes, absolutely. You're out doing deals with IBM X86 and they announced they're going to sell the business to Lenovo, the customers go, whoa, and the channel partners go, what are you doing? Because at the time it was probably better because it's Q1, that's probably the best time to do it, no good time. We've been very, very busy since their announcement, let's say that. Lots of requests for us. So you chase those guys around. Yeah, exactly. They're trying to put out the fires. Yeah, and they're coming to us. I mean, we're getting lots of calls of, hey, can we engage with you guys? We need to up our relationship. So we're happy about that. And the Lenovo animal is going to be, I would think different than IBM, as a competitor. I'd be a big services company. Lenovo feels like it's going to be more Dell-like. Is that a fair assessment, do you think? Yeah, I would agree. And if you look at what's happening, right, Lenovo doesn't know how to support enterprise customers. So IBM's already told them, hey, we'll support your enterprise customers until you learn how to do it. And Lenovo probably hasn't written enterprise management software. So IBM said we'll help write that software for you till you know how to do it. So essentially, Lenovo customers are not only going down the path of Dell, but they're going to be the guinea pigs for Lenovo to learn how to be an enterprise customer. Oh, that's a good little marketing line. But it's true, there's going to be some, I mean, IBM's transferring a lot of people over. But there's no way it's going to be seamless, right? So you guys obviously, so you're hopping on that. How about Cisco? So they're coming in, they've got kind of a disruptive approach. They got it to the server business that sort of chilled your relationship. You guys bought 3Com and now there's what I call sometimes the urinary Olympics going on in the two companies. But they're an interesting player. So how do you compete with Cisco? Why HP? Cisco did a couple of nice things. First they enhanced the management tool capability. So we recognize that for sure. We already had ours in development. They were first to market with more of a simplified management architecture, but we now with one view of Leap Throglam and we're not looking back. We're continuing to invest in one view and developing the capabilities. The other thing is in the area of converge, they partnered with some outside companies to get further down the road of converging systems, et cetera. HP doing a great job now within one company of converging systems. So we can offer storage networking and server compute capabilities all converged from the same company with the same TS support that we're world renowned for. So we just have a better offering at this point. Great job kind of helping drive the industry in that direction, but now HP, we feel like we're better positioned. Yeah, so I mean, I agree. I think it was goodness. You know, it's good to shake up the business every now and then kind of wake up the, poke the giant a little bit, poke the bear. How about the ODMs? Do you look at them? I mean, do you consider them competition? Obviously they're gaining momentum. You look at the IDC numbers. They seem to be increasing the percentage of their marketplace. Is that something that you look at? Is that something you have solutions toward? What are your thoughts on ODMs? So ODM is a very important part of the industry and we partner with ODMs to do some of our programs and products and as you saw, we recently announced our joint venture with Foxconn to specifically focus on a tight relationship with Foxconn to serve the high end of the service provider marketer, the tier one, the largest service provider. So it's a trend that we aren't ignoring, but at the same time, we still feel like right compute for the right workload at the right economics. It's a space that we need to make sure we're well positioned for, but we have other spaces that we're also very focused on. That fundamental hasn't changed. All right, just a very little time left, but Paul, I wanted to ask you last question of yours. What's exciting you inside the product? You know, what are some of the technology trends, the developments that you see that get you excited? Yeah, well, like I said at the beginning, I mean, Blade System has got up with, we've brought out this 40 gig virtual connect module with 20 gig down links, great thing, industry only brings together convergence. And as we've talked about, one view is a fundamental game changer. It's going to make management of day one easier, provisioning easier. It's also going to make management for day 30 easier. We've paid a great deal of attention to make it easy to find things, to make it easy to see relationships. So these are things you can't do with other vendor systems. And I think fundamentally we've got a great product with a great advantage in terms of management, in terms of architecture, and in terms of technology set that we bring. Hey, Rick, last question for you is talking to customers. HP, why HP for the future in this business? Why HP for the future? Innovation, simple. We continue to invent, we're driving innovation. It's a key theme for make. It comes out all over here at Discover, if you look around. We are seen as the leader in innovation in this space for compute, for storage, for networking. And we plan to continue to do that, to thrill our customers. And it's not just in one dimension. We didn't talk a lot about even our non-stop and HP UX. We continue to innovate in those areas with new developments, new technologies, new capabilities. So we're going to make sure we keep thrilling our customers no matter where it is that they want to spend their money from a compute point of view, from a storage point of view, from a networking point of view. We're investing for the future and we're innovating. Yeah, the non-stop, the HP UX, even the open VMS there. There are customers out there that are relying on that. They got business processors, processes hardened to those systems and they're generating revenue around it so they're not messing with it. Absolutely. They're here to stay. So all right gentlemen, thanks very much for coming to theCUBE. Thank you. Great segment, really appreciate your insight. Yep, appreciate your time. All right, keep it right there, buddy. We'll be right back. This is theCUBE, we're live from HP Discover.