Computerworld: It's awkward to ask a CEO to second-guess his customers, but what do you think CIOs should be doing differently, faster or better?
Tucci: I don't second-guess them because they've got a huge problem. They too understand the benefits of cloud computing, but they've got applications that run their business that were written years ago and they've got thousands of them per CIO. In some cases tens of thousands of them. It's just not so easy to snap your fingers and say: You're on a mainframe today; you're going to run on an x86 cloud tomorrow. It's just not that easy. You're on an Oracle database. I want you on a Hadoop-based information system. It's not that easy.
Their CEOs and their board [members] are reading all these cloud things and saying: Why don't we do that, why is your core infrastructure like it is? I understand the pressures they're under every day but I think what we can help CIOs do, and what they should do, is plan out their journey and explain their journey. Say it's going to be four years. In four years I can be here, or in five years I can be here, or three years I can be here. Timing will change. In 10 years I could be here.
But if you don't plan a journey and you don't start the journey, you never end up at a destination. You need a destination, just like you're taking a trip. If not, you just walk around in a circle. So you've got to plan your destination. Here's where I want to be. Then you've got to back up some. Here are the steps on how I'm going to get there. And they've got to explain the economics all the way along. And then I can do some green-fielding and anything new I do is going to be here.
Computerworld: From an EMC perspective, how concerned are you about the move to the cloud? Are you concerned about the white-box phenomenon of cloud providers who would not set up infrastructure the way traditional IT shops set up infrastructure?
Tucci: That's what Amazon does. That's what Google does. But what we forget is they have a tremendous amount of talent and money; they pay for that talent that set that up for them. Because, let's face it, there hasn't been a period of years where a technology component didn't have a severe latent defect. When that shows up, you've got to replace 5,000 [of them], you've got to keep the genealogy of what you bought, you've got to keep setting it up. If you don't set it up exactly right... Well, it's not free to do that.
So yes, you can just go buy the white box, but time and time again customers start out that way and say: Can you do that for me? Because that was a lot harder than I thought it was, and it's a whole set of resources I've got to acquire [that don't have] anything to do with my business. We need people that are going to help run our business, not people who are not going to add a lot of value.
So yes, you could build up that talent yourself, which is exactly what the big cloud guys have done. Or you can come to a company like EMC and we'll do it for you. Our fastest growing and biggest business is to cloud providers. So why don't they do it? Well, I just told you why. They have so much to do that if I want to hire 100 people, do I want 100 people worried about the infrastructure, or do I want 100 people developing my next app, or 100 people working with one of my business units to use software-defined something or other, a software-powered business model that's going to be highly disruptive?
You think of a company like Uber. They're driving all the cab drivers and all the limo drivers nuts. What have they done? The power is in their software. So if you're a company like Uber, is the real power in developing infrastructure or is the real power in the software?
Computerworld: I want to talk about how you navigate the competitive landscape. You've got some big traditional storage competitors and at the same time you've got a slew of upstarts that are attacking those seams that you mentioned or new market opportunities. How do you balance the commitment to the technology paths that you're laying out for customers with the kind of rapid innovation that you're seeing on that startup front?
Tucci: First of all, startups have no magic. ViPR was done by an incredible group of engineers, the leader of which was in Seattle, and he did a tremendous job, built a tremendous team. We funded him to go disrupt, purely go disrupt. That's an example of one of the hottest software products, software-defined storage products, out there that we developed ourselves with a very novel team saying: Just go do that.
Computerworld: So a skunkworks-type project.
Tucci: It's not a skunkworks; it was very well-defined, very well-funded. Don't worry about any of our existing [products]. Go do that the way it should be done. Don't worry about carrying any legacy. You fit in the legacy later, not as the design point. You design it to be the best software-defined storage and then later figure out how I make my legacy work with that.
The second thing is you buy things like XtremIO [Ed. Note: A flash array company.] or ScaleIO [Ed. Note: A software-only storage-area network company]. Right now a lot of companies make a lot of noise on the flash side but there's no company that has grown even close to what XtremIO is growing at. There's a case of two huge winners, one we developed internally called ViPR and one we bought. By the way, we bought it before it had a dollar of revenue so we funded it heavily and actually delayed it because we wanted them to add some even additional features which they hadn't planned. We kept the original development team and it's been a home-run success. ScaleIO is another one.
There are three kinds of innovation. There's incremental innovation, disruptive innovation that you do internally and disruptive innovation that you get from outside. What you don't want to do is buy incremental, not disruptive, from the outside. By the way, if you do three rounds of incremental innovation you've probably taken a massive step and it probably is disruptive.
Computerworld: Companies are always buying other companies for that external innovation, but it seems like big companies fail around that dynamic internal innovation. So how do you spark that? How do you generate that?
Tucci: You just build it in your culture. Basically it's the old adage. If you don't allow people to fail, you're not going to get innovation. What percentage of startups is successful? I don't know the answer to that but it's small. Very small. You've got to allow failure. You've got to let the engineers dream.
When you have an existing product with a big base you have a lot of requirements from that base so they're having more input, whereas these guys don't care about a base because they don't have one. They get a clean sheet of paper and sometimes, most times, that clean sheet of paper is wrong, but when they get it right it's pretty amazing. I can tell you pointblank that I didn't have many customers coming to me saying: Hey, you know what I need? I need somebody to come along and virtualize my microprocessor.
You've been around a long time. Did you ever hear anybody asking you for that?
Computerworld: No.
Tucci: I can tell you I've been around a long time and I didn't hear anybody asking me for that. I actually found out about VMware from a customer. They said it was the coolest thing they had ever seen. Come look at it, I need you to support it. And I actually did more than that, as you noticed.
Computerworld: Indeed.
Tucci: It was pointed out to me from a customer, but even that customer would tell you that they didn't dream back here, you know what I need? I need that microprocessor virtualized. If you listen to your customers and 75% of your customers say I need this feature, you put that feature in. That's incremental innovation.
But it's important to do all three, and I think a lot of companies don't know how to do two. I think all big companies know how to do one, incremental innovation. If you have a big enough war chest you can always buy a company, [number three].
The question is identifying a company. Importing the company and keeping the talent is a different question. But very few companies do two well, where you can really say: Hey, you guys, go disrupt. Use your brain. I'm not going to tell you what to do. Here's a bunch of money. Go disrupt. But very few companies do that well.
Computerworld: Well, I'd suggest a couple of reasons. Big companies are afraid of cannibalization or they like the idea of failure much more than the reality of failure when teams set out to do things.
Tucci: I think you're right. Plus it's a hard case to prove. I mean you go to a board and you get some say ROI guys, and there's no case. It's not: Here's a huge business case, go do it. You're seeing something that might be good and you're saying: You're kind of special. Here, go out and go do it. I'll fund you.