Steve McDowell  0:00  
Ready to do a DataCentric podcast, where we talk where we talk about all things data center?

Matt Kimball  0:06  
Let's do it.

Steve McDowell  0:12  
Have you been any virtual conferences, Matt?

Matt Kimball  0:14  
Yeah, but before I go there for our next podcast, I want to spend about 10 minutes on 70s one hit wonders.

Steve McDowell  0:23  
Like afternoon delight?

Matt Kimball  0:25  
Afternoon delight, Leif Garret, Shaun Cassidy.

Steve McDowell  0:28  
Shaun Cassidy. Did he know what was it a do a? Some? where they are? Yeah, yeah. You got it. Yeah. There's something like that. Yeah. There's john travolta had an album. Yeah.

Matt Kimball  0:42  
Yeah. Henry Winkler never put one out. He was, you know,

Steve McDowell  0:45  
there was a lot of lot of

Matt Kimball  0:48  
Yeah, a lot

Steve McDowell  0:49  
of soft rock love songs. Right kind of one.

Matt Kimball  0:52  
I know. This is peaches and herb. There's a that's that's the United

Steve McDowell  0:56  
because yeah, it feels so good.

Matt Kimball  0:59  
Yeah. And that's us. On the data center podcast reunited

Steve McDowell  1:02  
Matt and Steve together again but virtual. Let's do this baby. 

Have you been to virtual conferences? What do you think you missed the coffee? I missed the coffee. I've been trying. I've been trying to get my housemates here to make me omelets like an omelet station before.

But Katelyn's nothing nada.

Matt Kimball  1:27  
I like your approach though. I'm not going to call out any companies individually because yeah, but I've seen varying degrees of good.

It's clear, every every company is trying to make the most of it.

And everybody in every company seems to have their different spin on what they think is going to make it regulated. But I'm actually I'm probably gonna be the controller in here. I actually think if he gave this a couple of conference cycles that you could have Very good virtual conferences, but it takes there's a learning process that they have to go through.

Steve McDowell  2:05  
Yeah, there is there is and yeah. So I missed the in-person. Yeah, I do and not just because it gets me out of the house, but but you're right. You're right. I think there's been varying degrees of success. I'll call out somebody I think Red Hat did a fantastic job. You know, analysts typically get one on one breakouts and they did zoom calls with the execs that we wanted to talk to, and it was really nice. Nvidia has taken an interesting tack they they're now two months into their virtual conference, and they continue to add content. This week, they did some some HPC product stuff, or deep learning products stuff we'll talk about but uh, yeah, I get an email every couple days and there's some new content available. But I'll tell you what is well tell you what has been good because there are conferences like Microsoft build which is going on or just ended, I guess because we record this which I would never attend. And, you know, the virtual conferences, I guess because of the lowered expense or whatever, but he shows on there they're giving these things away for free to attendees. I mean not the not the kind of sessions you and I always go to, but if you want to go deep on something, it's there. And yeah, and I think that increased access is fantastic.

Matt Kimball  3:21  
To some degree though those were always available on demand after the fact right I mean, a lot of these sessions you can but what you're saying yeah, I mean, if you want to kind of get it fresh and kind of Butterfield and yeah, but yeah, one of the one of the things I'll be curious to watch it, you know, like don't push their conference back to October I think and, you know, as a as the season progresses and you know, Nutanix and HP start to do theirs, I'll be curious to see if they  watched a Think or watched a Red Hat summit, kind of took some lessons learned and kind of applied it to what they're doing. And again, those guys were on the very first front end, and they did some good stuff.

Steve McDowell  4:01  
But so so I've had some conversations with the AR people, some of those companies, I won't call it anybody specific. But they're they're being very inquisitive about what's working and what's not working as these other companies are doing it. And and, you know, there's a couple of things, right? I mean, when you think about AI, I'm not gonna complain about anything. This happened at the conference level, the first half of this year, and I'll tell you why. These guys in geared up for a conference, which you and I know takes, you know, sometimes a year to plan it. And they've had to tear down their existing stuff, right, get out of whatever contracts, etc, and spin up this whole digital infrastructure to deliver these things and Nvidia's case, they weren't in Microsoft's case, they went off and record it. And these aren't live in real time. Now they have to go pre record. Yeah, right. All of these sessions. Just the amount of logistical effort involved in pulling this together and what in a lot of cases Is 12 weeks or less? You know, which is you know likely Why don't move they're still fall to give their teams time.

Matt Kimball  5:07  
It's a lot of sleepless nights for those event planners. Yeah.

Steve McDowell  5:10  
So you know, they're they're focused more getting content out in front of eyeballs right now than they are making it. Efficient, right. And I think that's going to come. And I think we're already seeing it. I think every every one that I've experienced has gotten a little bit better. And some of the tools suck, right. And some of the tools are really good. And you can't blame the companies for that. Because until you use them, you don't know. So that's all I have to say. All right. I don't miss flying on airplanes. But I tell you what, man I miss. I miss. I miss being somewhere else sometimes.

Matt Kimball  5:42  
Oh, I miss it off there. Yes. Yes.

Steve McDowell  5:48  
somewhere else. Let's talk

Matt Kimball  5:51  
a little bit of backside question for you.

Steve McDowell  5:53  
Yeah,

I did some press earlier this week on

pivot three. I don't remember if we've talked about them on this podcast or not, but they're an HCI player, they focus on edge HCI Yeah, they're a partner of Lenovo. They're there. They're kind of vertical, if you will, they they focus a lot on on video, video processing security, things like that. Which is a huge market. If you ever step back and take a look at you know, every camera is now digital. And that data is gone somewhere and count the number of cameras you see next time you walk through the mall. Right, those are all being fed to a pivot three somewhere. Yeah. But they stepped up with Lenovo and announced the new pivot three offering based on a Lenovo epic server the week before HP updated their entry level simplicity with an epic chip. Yeah, and they both touted as part of the launch kind of better economics single socket licensing with increased core count.

Is that significant?

Matt Kimball  6:55  
Oh, it sure is. Yeah. I mean, also, some of it, yes.

Steve McDowell  6:58  
Does does AMD have an edge on Intel and kind of the single socket space for, you know?

Matt Kimball  7:05  
Yeah, so it's when you talk single socket, it's interesting because when, traditionally, and there are always exceptions, but traditionally when, when Intel supports the single socket platforms, they, they do two things. One, they tend to D feature the proc. So maybe they'll cut out a memory channel or two, maybe they'll lower the and that has an impact on memory capacity. Maybe they'll artificially slow down the clock speed are there things they do and they limit Not only that, they truly limit the number of skews that they'll allow to go into a single socket. And if you look at HP, Dell, Lenovo, Cisco now replace Cisco in this case, but in some of the other smaller players in a single socket space, they tend to Go to the very low end Zeon parts to go into those, so you don't get the processing power. You don't the high core counts memory capacity in cash. And all of the rich features in PCI that make it kind of fly better, right? So that's one thing. The other thing is the, you know, AMD is shipping PCIe four on our hearts. And I mean, you're talking double the bandwidth, right? So when you get into local processing, you know from storage to to compute, or from accelerator to compute, that double the bandwidth is a big deal. So, there are a couple of reasons why I think they're looking at AMD in that single socket space.

Steve McDowell  8:42  
And

it's interesting, you mentioned a couple things and I'm gonna I'm gonna jump away from HCI for a second. Nvidia as part of their continuing GTC conference unveiled some new AI architectures, right and one of these is the 100 is in the couple the a 100 into their dg x kind of machine learning supercomputer. And as they unveil this they revealed is powered by AMD epic. And they were asked specifically at the end of the rollout a couple of days ago. Why did you choose AMD? And their VP of engineering I forget his name. He said, we don't. The only thing we care about in terms of a CPU is being able to serve the needs of the GPU, whether that's Intel or AMD. And I love the way he puts us, he said, and I have the exact quote, I tried to get it before the call. But he essentially said that they chose a CPU that wouldn't slow down the GPUs. It was a combination of massive core count, the PCI Gen four and the number of DDR slots. And then he made the comment he goes that's AMD and you know, eventually Intel will get there.

Matt Kimball  9:52  
Yeah, yeah, I think some people or some people in the industry maybe I played the PCIe for some more because you know, You don't see the broad adoption of it yet, from a personal perspective, but you know, it's always the leading edge apps that are going to take advantage of these of these advancements. Right? And you talk about the 100. That's a perfect example. And it's just a matter of quarters before everything's on PCIe four. This kind of reminds me of when you know AMD was was behind the curve on the memory adoption side was DDR three no DDR for Intel are not unheard of and left and right, because they didn't have a DDR for support. Right. Which, you know, was a memory speed issue and a number of other issues. So, you know, it's just, it's a step up for free.

Steve McDowell  10:38  
Yeah. And so Microsoft also a build this week announced its Azur supercomputer using the they didn't call out the 100. They confirmed it afterwards. They didn't talk about the CPU, but I think the inclusion of the 100 and videos demands in that space. That's likely an EPYC.

Matt Kimball  11:00  
They were building it but it was it was it was called out as EPYC later on.

Steve McDowell  11:04  
So am AMD and Nvidia together just dominating not just AI but the supercomputing space right now.

Matt Kimball  11:12  
It makes sense, right? I mean, because you hit on the things that you think about the characteristics of high performance computing or supercomputing, you need to move memory or stuff or data in and out of memory as fast as possible. You need to pull it feed the GPU as quickly as possible, right. memory bandwidth and memory capacity and, and the ability to get to the to the peripheral as fast as quickly as possible. Those are all of us right? That is that is what realm is. Even if you say those cores don't performance while all of those functions are really what what you care about in HPC, right. Yeah, so it makes sense. I'll be curious. This not to kind of transition but this leads into you know, the announcement Lenovo made with them. A couple of weeks ago, you know, filling out their portfolio of AMD products they did the the ASR 645 and six 665 to two socket boxes when you look at you know, you look at Lenovo and what they've done in the, you know, on the top 500 supercomputing. It looks like a natural marriage for them to go after more HPC deals. Killer apart and epic. And then you've got this company that knows how to go when supercomputing deals can be really fun to watch them over the next few quarters and see how much damage they can do together well isn't it interesting though, that AMD and Nvidia Are you know, are playing so well together and go in and save the world together and it wasn't too long ago that AMD wouldn't support the the Nvidia GPUs because of the you know, the bitter rivalry.

Right, exactly. Exactly. Now and I, you know, I don't expect they're going to buddy up and play well together in the consumer space. You know, it's a whole different world between between even between the kind of service we're talking about and mainstream servers. Yeah.

Commercial HPC they probably won't they probably won't play nicely together. Yeah.

Steve McDowell  13:15  
Hey, I'm gonna switch gears and I need you told me before this call, you said let's not talk about earnings, but I think we should a little bit. Here's what I want to say that I'll put the disclaimer upfront, right. You and I are not stocking analyst. And I don't want to talk about numbers. Right. And I think, you know, as we record this, we've seen Lenovo and hp. I don't think we'll have kind of a full understanding of what's happening in the world. Until we see Dells numbers next week and, and some other earnings that are coming out late next week, right.

Matt Kimball  13:48  
So with all that disclaimer

COVID-19 is killing me.

Steve McDowell  13:54  
I think here's what I think we've seen over the first five months of 2018 20, right, we've seen an uptake in and mobile sales, which you and I don't pay a lot of attention to. Right. But it's clear as we migrate to remote workforce. We've seen a lot of at least anecdotally, right, a lot of movement around VDI deployments, which are driving some server sales. Right. I think long term infrastructure projects are probably on hold. But supply chain has been hugely impacted. And you know, we think about COVID-19 is impacting us starting in March, but it started impacting some of the supply chain heavy areas in China late last year. Sure, yeah. And and HP ease earnings came out. We'll talk about the numbers, let's say they were disappointing. But the message from HP was this was the supply chain issue and to show you that, you know, we have a billion and a half dollars in backlog products. We could not ship in this quarter because we couldn't get them built. Yeah.

Matt Kimball  14:56  
Yeah, it's like, you know, it'd be interesting to see if that impacts Intel as well,

well, you know, it's funny because on the HP side, I'm not a prophet, but I just did a piece on us and for the impact of supply chain. HP z, HP is interesting million, I think, while they were impacted by this supply chain issue. Yeah, to some degree for this past quarter, they have a very, they have a very robust approach to supply chain from kind of a quality of product security and product security of overall deliverable. And I, you know, I think we're going to try and get one of those guys on here in the next couple of weeks to kind of talk about, you know, how they're how they're addressing supply chain moving forward, so that should be a fun one. No,

Steve McDowell  15:45  
I read your piece and it's interesting because this goes off for earnings a little bit, but when you think about cybersecurity, I think this is what I tweeted out on your piece. You don't often think about what happens to your equipment before it shows up on Doc, right, and that's a huge vulnerability where HP has been, you know, kind of front and center and taking the lead on how do I secure my supply chain? And this is not a new threat. I remember a decade ago reading stories about, you know, Cisco gear being intercepted. And so

Matt  16:19  
yeah,

Steve McDowell  16:20  
I mean, he's taking kind of a component up approach to

it.

Matt Kimball  16:30  
I will say this. I mean, there's so many touch points along the way, right from component, you know, from capacitors and resistors all the way to the, to the look into

Steve McDowell  16:41  
don't hit the desk when you do that, man.

Matt Kimball  16:44  
There are all these touch points along the way. You've got to reset it when you look when you think about kind of drawing out the path to the consumer, you know, from our supplier. It's crazy. how complex that is. I mean, it really is in some ways, rockets. It's and it's, yeah. Anyway, that's part one. Part Two, is, I think, on going back to the numbers, I think HP i think is in better shape than the numbers kind of point to I think they actually have their the way they're transitioning their company, you know, to the house of service, you know, kind of in leaning on their professional services more and more. To me that that is where the world is going. And you know, it's going to be a tough transition. It always is to change from what you were to win you want to be but I think on the other side, there's a really strong there's a really strong company that comes out of this.

Steve McDowell  17:43  
Yeah, I mean, it's interesting you say that I'm looking for the numbers now as we go but you know, they're as a service as greenlake and what they said in their earnings call yesterday was and this is a quote from Neary we gain traction in HP greenlake continue to see acceleration in this The profitable strategic business seeing larger deals coming in. It says our annualized revenue run rate is up 17% for greenlake 520 million dollars. So, yes, I think there as a service is a boom, I think everyone's as a service is going to grow first half. And, you know, this this sudden reconfiguration of everyone's data center, I think is highlighting the need for let's bring on some of this capacity on demand. Right.

Matt Kimball  18:35  
There's a challenge in there, right? Because some of this as a services as a service, local peer data center, right. So I think they actually haven't even seen what it could possibly be anything because you think about that. You take the professional services aspect of that setting and beat out who's out on the on the ground to to install and configure. All of those projects are held up right because I don't know. pisan kind of lights up Data sec. There's a lot you can't deliver these you can't put them in to start that kind of meter ticking. So I think it's it's not even seen as full attention. 

Steve McDowell  19:09  
You know, I agree. I agree. I agree in it. But I think we are seeing a Cova driven uptake. And these things we You and I, we talked to on this podcast, your storage a couple of weeks ago. You know, they said we're seeing business increase for VDI deployments. And as a service is attractive because I get kind of the cloud economics, without the cloud without the cloud without trying to migrate my applications to the cloud, because you think about, you can't push a button and retool your IT infrastructure to use the cloud, right? So if I suddenly need to support 30,000, VDI for remote workforce, I've got to do that in my existing infrastructure, right. And I don't maybe want to use the capital investment. And that's I think, we're seeing an uptick for all of these guys. And it's certainly demonstrating the power and the flexibility. So I'm still a fan of the as a service as the cloud Go ahead.

Matt Kimball  20:00  
One last thing and I know we're gonna you want to move on because we have we have a hard stop on this. But you know, one of the things, interesting little bits I saw in the HP presentation was that their synergy to composable infrastructure business was actually a little bit over the last quarter, which in the face of, you know, kind of other eras being computed being down storage beat down, I thought that was interesting, because it speaks to that whole, you know, kind of a cloudy, cloudy environment that companies are trying to deploy. I wonder, you know, any of this is driven by the awareness that you're not always going to be able to be on site to provision and deploy server so interesting.

Steve McDowell  20:41  
Yeah. And in the other area, bright news, an EP was intelligent edge, which did what they grew in North America by 12%, first quarter, and the networking piece was up 7%. Now it's hard to contextualize this a little bit because Prior to the earnings, I think they did a reorganization. And I'm not clear looking at the slides whether this reflects the new organization, or the old one, because edge now includes what's their networking business? All this stuff? Yeah. But either way, right? I mean, if you look at edge is kind of a category, it's good to see growth there. It's good to see growth in, in the services. And on server and storage. I think, you know, we'll see what shakes out.

There was another earnings call. It was

Lenovo, which was

not as dire as HP is, but I'll also say their level of business is not an HP scale. Right. So there if you look at proportional impact, yeah, maybe like

Matt Kimball  21:53  
the thing to know is, yeah, I read some articles on them. And you know, I I hate Reading the press because they, it's like they don't always take a critical look at what's going on. They just look at the numbers of the bottom line numbers and kind of report out on that. And the thing with the Nova where they got hit was hyperscale. You know, on the data center side, you know, they've been they've been maybe overly dependent on hyperscale for a long time.

And, you know, they as they've been building up that non hyperscale business,

and it shows in that's right as hyperscale is as a desert. If you look there, they're not hyper scale business is still in, it's still growing.

Steve McDowell  22:37  
Yeah, they broke out on the chart.

They broke out on the chart. I don't know that I've seen it broken out previously. Maybe they did. I don't remember it. So they said revenue decline year over year on hyperscale. hyperscale is actually down close to 9%. But non hyperscale revenue grew 5.3% right? double digit Cross key segments it says server is up 14 server volume is down 14%. year over year, China revenue is up 23%. year over year. Storage is up 54%.

Yeah, but I know

it's a nascent business and we're talking small numbers. But if you look at you know where the momentum is and the fact that we're seeing upward arrows and a quarter that others are suffering in

Matt Kimball  23:28  
Yeah, they're there. Yeah, I'm looking at their chart there. Their volume growth, the server volume growth is 14%. You know, their revenue is not I see 3.640 No, it doesn't matter year over year revenue growth of 3.6 3.6 5.3. It doesn't matter what I what that tells me is that their channel business is doing better B and they're not getting a as p said, because those are those are not great. asp is typically on the on the volume business, but they have They're 

Steve McDowell  24:00  
there is growth, right,

which, which is why they're calling out server volume as opposed to server revenue. That's, yeah, they're using revenue from us in the end. The other thing to keep in mind with Lenovo is not necessarily apples to apples with an HP. They're heavily China centric in Asia, and their server business. And that's, that's a region that that's, you know, bouncing back a little bit from the COVID that we're still experiencing.

Matt Kimball  24:25  
I actually look at the numbers and I go, Okay, well looks to me, like they're on track to growing their non hyperscale business, which is what they've had to do to kind of get a sustainable run rate, you know, a quarter quarter, that's good. You can see that through the volume there, they'll fix the volume, or they'll fix the ASP issue. And when you look at some of their strategic initiatives, you know, Software Defined services, you know, they have strong growth across the board, right, man. So to me, you know, if you read the press, you go, man, that doesn't look good. I read it, and I go, you know, I see the green shoots there and they're ready. shoots that go in the way that, you know, Kirk is wanting to take the business right so yeah, just keep on doing and don't pay attention to some of these pundits out there,

Steve McDowell  25:12  
Right, and i don't think Lenovo does pay a lot of attention to the pundits honestly watching them do business. The other note on on Lenovo, and I think this is, you know, you and I are both paying a lot more attention to edge right now. And Lenovo is edge business. That's a critical area of focus to them. They started a division late last year that's 100 percentage focused starting to pay off so as an Aggie, you know, I wish they gave us revenue numbers, right. All we can look at is growth, but it says smart IoT quadrupled your infrastructure, which is Ed intelligent edge up 37%. year over year. Yeah. And software and services. is up 43%. Yeah, yeah. And we saw similar numbers in HP services are up across the board.

Matt Kimball  26:01  
Yeah,

the the I look at Lenovo on the edge is kind of how I look at Lenovo and storage and those are good numbers. They, you know, I think they're kind of starting to hit some kind of velocity. But I you know, I think they're starting from a smaller starting point than an HP major business you know,

I only say that because I don't want to I don't want to come across Lenovo is killing an HP is, you know is not killing it on the exciting thing you know, given the market conditions HP was pretty darn strong on the edge side. Worldwide, not just North America.

Steve McDowell  26:48  
Sorry.

Now you're good.

Yeah, they have this is confusing. I'm looking at their deck and they have two different growth numbers for non hyperscale computing. Maybe I'm reading Wrong one says 3.6%. But if you go up a few slides are back on your deck, right?

On slide seven, it shows 5.3.

Matt Kimball  27:09  
Interesting. Yeah, I was reading something else it said they, and I haven't seen this in their in their slides, but I didn't look at it as deeply as I should have. Yes, they said that their HCI business was not as strong from a revenue perspective as they had hoped it would be.

I'm kind of curious, you know, kind of curious as to what that is, you know, what I read, speculated that they sold a decent amount early on, but it kind of things got saturated with COVID and put a big stall and deployments and kind of expansions, but it's hard to it's hard to really tell but you know, they've got a really interesting you know, list they've got a really interesting HCI approach. Right, they partner with everybody. Seemingly, which is not a bad I don't mean that as a negative, but they have a lot of different kinds of HCI partners that they go along with.

Steve McDowell  28:12  
That's right. Yeah. I mean, they partner with pivot, they partner with scale compute. They have some Nutanix business on the enterprise side. Yeah, yeah. But what I'm what I'd like to see is more color on what they're doing with storage area focus for me, they grew 54%. It said, they have the JV with NetApp, which should start bearing fruit, right, first half of this year. Med apps earnings are on the 27th. I think so we'll see what they say about that business.

Matt Kimball  28:41  
See what that number looks like.

Steve McDowell  28:45  
Yeah, we'll talk about NetApp next. Maybe not. Next one, the you know, in one of the upcoming podcast post earnings, but they just brought on a new president and their existing President George Kurian shifted to CEO and this is on the heels that you If you look over the past 12 months, I think they've replaced most of their most of their senior leadership. So be interesting. What else we're gonna talk about Matt.

I want to talk about a lot of things, but I think you need to go around and take care of scenarios or something. So, making sourdough and I don't know if you heard the timer behind me.

Matt Kimball  29:24  
Of course you are,

Steve McDowell  29:25  
Man, you know, my butt was already big, but my wife is making two pies a week. She's making ice cream. She's got bread and ice cream going right now. 

Matt Kimball  29:38  
I love that. I love that. It's been nice for good for you, man. I'm going around. I got I gotta go. nappy, sister.

Steve McDowell  29:47  
Go run. And I don't know if we have a guest next time but we have a guest coming up soon.

Matt Kimball  29:52  
Yeah, yeah. Next, I think it might be the next time maybe not next time but in the next couple of podcasts. Talk about we're gonna have john Barrasso from HP. He heads up supply chain worldwide and their strategic engineering initiative. So now he's going to talk about kind of what we're talking about earlier, all the supply chain craziness going on and how they navigate those crazy waters. So it's gonna be fun.

Steve McDowell  30:17  
There's gonna be a lot of HPE news coming up. I'm predicting, I haven't been briefed, but HP Discover still on for late June, which is, you know, only a month away. Yeah. So I expect them. expect them to make announcements across the board. Their storage stuff is getting stale. It's ready for refresh. I'm expecting some storage stuff for sure. It'll be interesting time. All right. So we'll see you.

Matt Kimball  30:43  
We'll talk soon yeah.

Transcribed by https://otter.ai