Session Name: Building a Cloud Ecosystem for Europe.
Jo Maitland, she’s the Research Director for GigaOM, she’s going to be talking – having a discussion on building a cloud ecosystem for Europe, with Jason Capitel, the COO of the EMEA for EMC. Please welcome Jo and Jason to the stage.
Jo Maitland 00:19
Good morning everybody. Thanks for joining for the first level of the day. I just want to kick off and ask Jason. You have a C-sweet title at EMC, as COO. So, tell us what does a COO do besides show up for this sort of thing?
Jason Capitel 00:35
Well, first I want to echo my thanks to everybody that got up early and made it for this kick off session. So thank you to all of you. COO is actually a new function at EMC. We’ve gotten – my 11 years being there, we’ve grown from 5 billion to 23 billion in revenues and we’ve gotten vastly more complicated as a company and so, my role is really to try to mask that complexity to the customers and try take all the business unit functions and the federation of companies and merge them together into a single entity to mask the complexities for the customers. So in short I’m here to help EMC be successful in EMA, a longer answer would take a little bit more time.
Jo Maitland 01:16
So, federation of companies meaning the sort of portfolio of EMC companies?
Jason Capitel 01:22
Yes. So we have within EMC information infrastructure, we have different business units as we finished our 83rd acquisition – in the 11 years I’ve been here – a few weeks ago. We have multiple business unitsâ€™ functions within the EMC information infrastructure and then our business model as a whole is setup as a federation of companies. And so we have EMC information infrastructure, we have VMware virtualization, we have RSA from a security standpoint, we’ve just recently formulated the pivotal initiative where we’ve taken some of the assets from VMware and EMC and putted them together to go solve what we referred to as the big data and the fast data problems, and capitalize on those opportunities on the market.
Jo Maitland 02:05
So how do you make sure that left hand knows what the right hand is doing when you’ve got all those moving parts?
Jason Capitel 02:09
It’s difficult. It’s actually the balance that we’re running right now. At our core we are an innovation company. Over the last decade I can’t think of a business case or another company in the planet – we’ve spent 11% to 12% of revenues on research and development every year, another 11% to 12% on M&A every year. And so 25%, rough and tough top line revenues are spent on technology and innovation. So you don’t want to lose that drive, who you are as a company which is a technology innovator. At the same time you get complex, right? You play in different areas, you’re moving up the stack, you have a big partner – Ecosystem which is one of the things we’re here to talk about today – and so how do you mass that complexity to the customer and how do you really help them lead to a transition to the new paradigm shift of dynamically reconfigurable services which is what we believe IT should be.
Jo Maitland 03:14
So, in the partner Ecosystem is that partners outside of the EMC’s portfolio of companies? How do you think about the ones that are outside of your company versus the companies inside?
Jason Capitel 03:27
Yes. So we have a vast partner Ecosystem when we were building our services provider program four, five years ago. Joe Tucci pulled me into his office when we were in the boardroom and he said, “Look, you have three choices. You can stick your head in the sand and pretend that this is not happening, right? Which is always not a good option. You could become a services provider and build it yourself. Or you could enable the services providers to go and solve this problem at a different level. And our strategy has been and continues to enable the Ecosystem from a partner set. And fundamentally we believe very, very strongly that the workload and the SLA characteristics of that workload and the performance characteristics of that workload should dictate where it lives. Whether that’s in internal private cloud, whether that’s an external public cloud, whether that’s an external private cloud dedicated to that customer. The work load and the characteristics in the governance structure should dictate where it lives. So, in order to do that, if youâ€™re not a service provider yourself, you very quickly realize that you have to get strategic with some key partners in the marketplace to serves the market.
Jo Maitland 04:47
So, maybe just clarify than VMware, VCHS because it’s of the first round of VMware’s approach to the public cloud was to arm the service providers with software and then the second round now with VCHS says, “Here’s the software to run a public cloud but we’ll also operate it for you. So you kind of – are you also operating the cloud but not actually, it’s not necessarily your facility but there’ll be VMware people in there running it. Is that correct?
Jason Capitel 05:22
You know, if you think about it, it’s really no different. We’ve talked about this in our prep call, right? It’s really no different than some customers of the EMC, for EMC, that are of the enterprise ilk and they say, You know what, we love the technology but we don’t have the expertise or we don’t have the economic means or we don’t have the desire to actually run it. So EMC has consulting services that go on running. Now VCHS is a little bit different in the fact – I’ll let my colleagues from VMware discuss with you and be happy to answer any questions. Ricardo De Blasio is actually here who runs that from a sales standpoint globally. VCHS is really about a new category which is a compatible hybrid clouds.
Jason Capitel 06:16
And I think that the notion of friction-less IT is what we’re trying to achieve and 70% of the new applications that are being developed are on new types of frameworks and they are typically being developed in the cloud. The question then becomes, how do you get that workload if it’s successful out of the cloud? Or how do you transition it to a different cloud? And how do you not stay locked in to where you are at? And our business model is built upon choice. So we want you as a customer to feel flexible, to leverage EMC’s storage with Open-Stack technologies or HyperV, we want you to feel free to use VMware software with HTS or Netapp storage. We want you to feel free to use pivotal to solve some of this complex problems but not feel encumbered or locked in. And we want to make sure that innovation happens to each one of those areas.
Jason Capitel 07:25
Now if you’re talking about friction-less IT – I think that anybody that runs an IT shop will understand – that the more you can standardize, the more that you can have commonality, the more that you can get specific layers to be closely connected and aligned, the easier it’s going to be for you, the customer, to have choices to where those workloads live. VCHS is really about creating a stack for service provider’s that is common. That people can understand that if I’m a Unilever or if I’m a PepsiCo or if I’m any number of companies, I can go an organization that has the same regulatory compliance, security measures that are built on the same like infrastructure that I can chose where to go. And to me this is what VCHS is all about.
Jo Maitland 08:21
Is it going to meet the cost model of the current cloud? Offerings out there which are raced at sort of low cost or is VCHS and EMC version of cloud going to be, EMC pricing?
Jason Capitel 08:38
Well, I’m not sure what you mean by the question, to be honest with you, Jo. I think that there’s varieties of cloud pricing that exist. And there’s economics that makes sense. Anybody that’s actually done a profile analysis, actually the cheapest way to leverage the cloud is to build your own. So, EMC has historically has had this premium product, premium pricing kind of mentality and actually it hasn’t been true for the about five or six years really. Again, we don’t believe that one array or one technology business model can solve all problems. We believe that you put the piece of information or the workload in the right place, at the right time, at the right cost structure. And that’s why there’s multiple variances of storage systems, whether it’s block, highly available. You want to move data from Singapore to London to Dallas, Texas, asynchronously, great. You want to do some web scale, scale out – I mean we just shipped to a customer 85 Petabytes on the social media. That is not at a high premium price scenario and I think cloud services are very, very similar. There’s public cloud where you use for test and dev. environments and then it’s how do you give industrial strength to those things and you’ll a different level of service.
Jo Maitland 10:13
I’m just curious about that one that’s 85 Petabytes of storage. What kind of storage was that?
Jason Capitel 10:19
We’re unfortunately not allowed to talk about it. But think about social media, web scale, some very, very large customers. I actually believe it’s the largest capacity order ever shipped. And these are the types of dynamics that are existing in the market today. You’re seeing social companies come to EMC, you’re seeing — the mobile boom creating massive amount of space that’s required. And while EMC we don’t make money off the mobile device, or things that are stored in the mobile device, often times a lot of these things are stored elsewhere. And so we have to help find ways to deal with that information. And VCHS is part of it, our partner Ecosystem is part of it and those big refrigerators with spinning desks are sometimes still part of it as well.
Jo Maitland 11:13
So we’ve got a couple of minutes left, I just want to make sure you guys know that this is interactive. So if anyone has questions for Jason or about the EMC or about the sort of trends that he’s seeing around cloud. There’s a microphone in the middle there and then there’s one on that side as well. So these are the legacy kind of more traditional competition, HP, IBM, etcetera. What do you think kind of looking forward over of the next five years, what do you think EMCs differentiate of these established players are? If there are people here in the audience who are also maybe IBM customers or maybe HP customers and they’re thinking—they’re trying to think the next three to five years about their cloud strategy. What’s different about you guys versus IBM?
Jason Capitel 12:18
I think IBM is a wonderful company that I have a ton of respect for. As well as many of our other competitors on the market place. I believe that the transition from siloed infrastructures where every application has their own thing is radically shifting and changing over a five year period. And I think that EMC at our core–Joe always says, “Know what you are and be great at it.” And what we are is a technology innovation company. That’s who EMC is at our core. I believe that companies are building their road maps right now and have been for the last year, 18 months and will continue to solidify their strategies as to what they look like and to how they leverage this information over the next period of time. I also believe that if I’m a customer – and I’ve vetted this with many – that I have room five people to talk to, five people are going to influence my strategy. I believe quite honestly that three of those spots are already taken. So, a big company is going to talk to an SAP, or an Oracle, they’re going to have a sit at the table they run their business on them. They’re going to talk to a Microsoft who, they also run their business on. They are going to have a system integrator outsourcer or service provider that sits at that table. And there’s two other slots left. And I believe that EMC with the credentials and credibility that the companies have based on this acquisition and M&A and technology and innovation model, is somebody that you need to have sitting at that table and bringing thought leadership as to how you’re going to transform your organization. And I think that if we do that and do that well and not get caught up in some of the messages that you can got caught up and doing it, I think that in and on itself is a differentiator factor for EMC.
Jo Maitland 14:23
Cool. Good luck. Thank you Jason.
Jason Capitel 14:24
Did that made sense?
Jo Maitland 14:25
Yes, it was great.