Michael Hoch | SAP SapphireNow 2016
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Michael Hoch | SAP SapphireNow 2016

>>Voiceover: Live from Orlando, Florida. It’s theCUBE. Covering Sapphire Now. Headlining sponsored by SAP Hana Cloud, the leader in platform-as-a-service. With support from Console Inc., the Cloud Internet company. Now, here’s your host John Furrier.>>Hey, welcome back, everyone. We are here live inside The Cube and we are at Sapphire Now, the SiliconeAngle’s flagship program. We go out to the events, instruct (indistinct) Want to give a shout out to our sponsors. SAP Hana Cloud Platform, Console Inc., Virtustream, and EMC and Capgemini. Thanks for your support. We really appreciate it and it allows us to get these great events and provide all this great coverage. Over 35 video interviews
already up on Youtube, more coming today. Our next guest is Michael Hoch who’s a senior vice president
of global system immigration at Virtustream. Now an EMC company sold
for 1.2 billion dollars. Originally start out in the SAP ecosystem, created so much value
over a billion dollars and then exit to sold to EMC. Welcome to The Cube.>>Thank you very much for having me. I’m glad to be here.>>I really love the Virtustream story because to me, we’ve been
watching the progression of Virtustream from the beginning and it really to me, shows
the value of the possibility of what’s going on in this ecosystem. You sold for 1.2 billion dollars and that’s now come, it’s out there, it’s established. Cat’s floating, whatnot. (Michael laughs) But it really shows that
you guys started out with an SAP and then pivoted or
navigated out to a business model with the Cloud. Probably a lot of value. This is a lesson for the ecosystem because this is an example where SAP didn’t have functionality. What you guys were doing, really was an operating model that was underserved. Very underserved.>>Share the story of how it
relates to today’s ecosystem.>>Sure. So when Virtustream was founded, Cloud was sort of an anathema
for the enterprise. Right? That was the time where AWS
was starting to shoot off. Microsoft was just dipping
their toes in the water. And what Rodney Rogers
and Kevin Reed saw is the opportunity was if you could put SAP and large enterprise mission
critical applications on the Cloud, that’s something that
could have tremendous value in the future. At the time, everybody was skeptical. Security concerns. Availability concerns. Management concerns.>>”It’ll never work.”>>It’ll never work.>>They said that about
Amazon web services too.>>A few years earlier,
that would never work and now they’re what? 10 billion or something. So they focused on that market
segment for two reasons. One, there was a huge
value if it could work and two, they knew SAP. They came from a joint which they sold eventually to Capgemini. They knew SAP and system integration. White Glove Service was critical
for enterprise applications to run in the Cloud. So the company was built
with a White Glove Service that we started. As well as our technology,
the extreme platform, that was really designed to
host IO intensive stateful apps. From there, we grew, we did well, we plowed our
way through the VC era. The reason why—>>Wow, big word. Plow. (laughs) It was a sog.>>Yeah, I had been
there for over five years and there were some days but in the end, where we got to over 200
SAP production customers, EMC very interested
because of the technology, as well as the White Glove Service. And that’s where we, about two years ago, started opening up to SI partners. Now, we were proving that this could work. We were winning customers against them and giving in a small way, the types of hand holding that
they do on day to day basis. So we started partnering with
some SIs to show that they could run it as well.
>>Explain that. Take a minute to explain
>>Sure. the relationship that
Virtustream, now EMC Virtustream, has with SIs and how they engage with you and the value that you provide.>>Sure. Sure. So, we work with SIs in a
couple of different ways. So, SIs are known for high touch, high management application
services generally. When it came to where’s
it going to be hosted? Some SIs are asset light and they say, “Well, here’s your respects,
go buy data centers, go buy your own servers, whatever. Once you got the hardware provisioned, we’ll come in and do
the application work.” Other SIs built their own data centers. Capgemini runs their own data centers and they had their
application management work. So you had asset heavy, asset light. In the Cloud world, we
were able to come in easily to those asset light situations and now through our software can help those asset heavy companies to build a full Cloud model to support it. In an asset light model, we
would provide up to the IAS, maybe OS management and the SI would handle
basis, data baseboard, all of the work that they’re very good at. We did what we were really good at.>>Yeah, and this a big trend. We put this up yesterday on The Cube. This asset light and if you can take a
minute to describe that is the new normal for operations
management on the Cloud. Because you don’t want
to have heavy assets, you want to be more elastic, more agile if you will.>>Agile and responsive and it ties very well
into the current trend of enterprises saying, “How much of my data
center do I need to keep?”. We’re in a hybrid world. We’re going to be in a hybrid
world for the next several years. So there’s going to be a
large portion of on premise and a large portion of off premise. How do you build a hybrid
environment that’s scalable where you can pay for
what use in the Cloud while still making use of
whatever asset you have? So, the SIs look a lot like IT.>>So if everything’s
asset light or no asset, say we’re using the Uber for example, it backs me out to do self-driving cars. (Michael laughs)
As reported today in Pittsburgh. You need a data center somewhere. I mean someone’s got
to have a data center. So there’s no diminishing return, there’s no race to zero
on this asset light. Someone needs to carry the assets.>>Someone needs to carry the assets and that’s where Virtustream stepped in. Five or six years ago, someone’s
going to need to own this but we’re going to need to
own it at a higher degree of efficiency and still the scalability and security.>>So, this is the issue, right?>>Yeah.>>If you’re going to use data driven, you need to have a data center. But here’s where I want
to get your thoughts on and this ties to the global channel, A-K-A the big system integrators who are doing a lot of stuff. They’re have to be
nimble to customer needs so they don’t have and tell
me if I’ve got this right? They don’t have the luxury
to provision up a data center at the scale that need in
order to get table stakes and start doing business? And that it’s easier to
go to say Virtustream and other Clouds possibly to get the critical mass of resource to start doing business and
being agile do up in software. Did I get that right?>>Well, if we’re talking
about the systems integrators in particular, they have some solution already. Most of the large ones,
already either have their own data centers or co-location relationships but they’re very manage hosting focused. What they’re trying to get
to is an agile responsive way to deliver what they’ve
already been delivering. And that’s where the
partnership with Capgemini, for example. Our extreme software
and their data centers, they’re able to use our
IAS as burst capabilities or to reach regions that they can’t today. That really gets them into a position of looking like a Cloud provider, even though, they’re owning
their own data centers. They can use us, our IAS, for regions that they’re not in or to extend. But they’re able to get to
that very responsive manner. What Virtustream was built
from from the ground up. What we’ve been doing for
the last six and half years. They’re adding to their
coasting capabilities. You’ll see that
>>You’re accelerating there with other SIs as well.
>>with pre-existing stuff. Giving them the ability to go out and do some of the agile dull.>>Don’t lose your current customer, put ’em in a modern world. ‘Cause this is another interesting trend. You’ve got ISVs looking
like service providers. All the ISVs want to move to
a Cloud enabled something. Maybe not full sass but something and then you’ve got service
providers that need to look more like ISVs, software solution driven.>>So everything’s flipping around? So the vector’s are
reversing on all aspects.>>On all aspects. But either way you look at it, they still want to have a
consumption based infrastructure behind it. So whether you’re asset heavy where you want to convert
your data center to do that or you’re asset light and you need to access
one like Virtustream, it’s really the way that it’s already tipping in the industry, it’s just going to continue
over the next three years.>>What’s the biggest challenge
for developers out there? And the ecosystem partners
that you’re working with? I know you mentioned your
story about Virtustream, schlogging through the VC and being agile, and that’s the ups and
downs of entrepreneurship. When we’ve started companies together. I’ve done companies. It’s the same way, highs and lows. But that culture’s moving
their world (laughs) It’s still turbulent to these guys. It is an up and down for these guys. It’s a slog at some level because they got to be agile and that’s very startup-like.>>To start up, they have to be agile and what I see, even the global SIs, you’re talking about
billion dollar companies, multi billion dollar companies. They’re getting pressured
by their customers to say I want an all in one solution and I want to pay for what I use. And their business models aren’t
necessarily ready for that so they’re having to really
rethink of they’re delivering, how they’re innovating, and what they’re bringing
to their customers. Because if they don’t do it that customer is going to
go to somebody who does.>>Yeah, I mean the
enterprise has to become more entrepreneurial. That is the only way in my opinion that you’re going to
see the innovation surge and that’s not necessarily
be entrepreneur, just be entrepreneurial.>>Right (laughs)>>It’s a mindset.>>Mindset.>>And you can learn that. You got to get tough skin.>>Tough skin and taking advantage of
changing business conditions, ramping down when it’s a good
>>Iterating. slow seizing. Iterating. This why everybody comes to Cloud. Agility being number one. They say we want to respond to
changing business conditions. You’re business also has to respond, it can’t just be your IT.>>Alright, the age of Cloud,
Michael thanks so much. Give you the final word. What’s on your plans for this year? What do you got going on? What’s the big highlight for Virtustream?>>Sure. So, we’ve been doing
SAP for six years or so, we’re branching out into
other enterprise applications. You’ll be seeing us expand our catalog. We’ve always been a heterogeneous Cloud but you’ll see a more
aggressive move into that. And you’ll see the scale. We’re going to be opening
up new locations globally. Thanks to our parent’s company EMC.>>Big, big, deep pockets.>>Big deep pockets.>>I bet to so no one gets—>>Our customers are global. We need to get our offering
out in the global market.>>Well, congratulations on the success and the acquisition and certainly being a private company. Dell Technologies, a
combination of EMC and Dell, will give you a lot of room to maneuver under public scrutiny.>>I’ll come back in the
Fall and talk about that. (light laughter)>>Thanks so much.>>This is The Cube. Live in Orlando for SAP Sapphire. I’m John Furrier. You’re watching The Cube.

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