The Six Five On the Road at AWS re:Invent 2022. Patrick Moorhead and Daniel Newman sit down with Varun Chhabra, SVP ISG & Telecom, Dell Technologies. Their discussion covers:
- Announcements and innovations Dell has made in their cloud business
- Dell data services and software innovations on Amazon Web Services (AWS)
- The adoption and progression of hybrid, public, and on-premise environments
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Patrick Moorhead: Hi. This is Pat Moorhead and we are live in Las Vegas at AWS Reinvent 2022, in the Dell Technologies booth. Daniel, this is wild. I mean, things are happening everywhere. People are drinking already and we’re not. What’s happening?
Daniel Newman: Yeah. It’s always a great time here at AWS Reinvent. We love taking The Six Five Show on the road. There’s so much going on in the world, but anyone that’s doubting the importance of technology in the long term just needs to show up here for five minutes and walk around and feel the energy and just say, “Wow.”
Patrick Moorhead: All right, good job.
Daniel Newman: The cloud, hybrid cloud, the story, it’s getting really exciting, Pat.
Patrick Moorhead: Oh, I am feeling it for sure. The amazing part, as I look back is, 10 years ago it was AWS and some of its public cloud folks, but boy has this industry shifted. I mean, we’re 15 years into the public cloud and only 10%, 20% of the data and the applications are in the public cloud. The rest is on-prem, it’s in the edge, it’s in co-lo, it’s everywhere. We basically all agree that the world is hybrid and quite frankly, it’s multi-cloud, but some people aren’t there.
Daniel Newman: The definition’s moving. It’s a little malleable, but I smell opportunity. Whether you’re observability, you’re software, you’re security, you’re infrastructure, you’re here. You’re here. I hate to say it because it might be a little rude to everybody out there, but it’s kind of like if you’re in the tech space, in the big infrastructure enterprise and you’re not here, you probably should be asking yourself the question why.
Patrick Moorhead: Yeah. I think we should maybe introduce our guest. What do you think?
Daniel Newman: I think it’s time. Very excited.
Patrick Moorhead: Varun, great to see you.
Varun Chhabra: Thank you, guys. Thanks a million.
Patrick Moorhead: How are you?
Varun Chhabra: Thank you, guys. I’m good. How are you guys?
Patrick Moorhead: Good. When we do our first video, we talk a little bit too long to bring in the guest, but man, I am so glad to see you.
Varun Chhabra: Likewise.
Daniel Newman: Are we self-critiquing already?
Patrick Moorhead: Possibly, yeah. This is not your first time on The Six Five. It’s great to have you back.
Varun Chhabra: No, no, I’ve been here before. Yeah, so it’s good to be back. Really, really excited. And as you said, the energy around here is just so infectious, it’s unbelievable. Daniel, you put it best. If you’re in the tech space and you’re not here, you’ve got to ask yourself why.
Daniel Newman: I absolutely could not agree more. So Varun Chhabra, I guess, let’s start off. You’ve been on our show. You’ve had a few really big, important roles. I remember breaking bread with you probably four or five years pre-pandemic, near The Domain in Austin, with Austin guys, yes.
Patrick Moorhead: Yes, I was there, yes.
Daniel Newman: You were there, I was there. But for everybody out there, you are an alumni, but they haven’t met you before. Give everyone the quick who I am, what I’m doing for Dell. Give them the color.
Varun Chhabra: Yeah, sure. So as you guys said, Varun Chhabra, I’m now at Dell now for seven and a half years, so I’ve actually worked at Dell longer than anywhere else, which I’m really, really proud of. I am a senior vice president of product marketing and my teams are responsible for infrastructure, so that’s storage, HCI, servers, data protection, multi-cloud platforms, multi-cloud storage, DevOps solutions, as well as our edge and telecom portfolio. And then we also have team members who are focused on our APEX solutions. So yeah, as I said, I’ve done a bunch of roles at Dell in the last seven and a half years, starting from storage product marketing, to cloud to unstructured data, et cetera, all over the place. It’s been a fun ride.
Patrick Moorhead: Well, we talked to primarily veterans in the industry and I guess as I look back, 11 years ago when we even started our firm, we were one of these crazy analyst firms that talked about the private cloud and the hybrid cloud. I understand why there was such an aghast reaction initially, but Dell Technologies and a lot of the things that you’re working on are reinforcing and making analysts like me look really smart. And whether it’s the hybrid cloud or the multi-cloud, so-
Daniel Newman: We call this a victory lap, by the way. We love doing that.
Patrick Moorhead: No, I do that. We have some big announcements this week here, at AWS Reinvent. Can you talk about the highlights? Listen, I know you love all of your children the best, but give us the highlights.
Varun Chhabra: Look, I think what is really amazing about what’s happening in the cloud industry, you mentioned it. We’re 15 years in, but it still feels like it’s early days. It’s such a dynamic space. And we have transitioned from people being on one cloud or testing the waters on one cloud and then saying, “I’m going to be only in one cloud. I’m going to move everything to one cloud.” To now, I think we’re in a world where people are realizing it’s going to be a multi-cloud world, where on-prem, there’s co-lo, there’s edge increasingly. I mean, we don’t quite understand how much even edge is going to change this model, but what we find when we talk to customers more than anything else is complexity. And as veterans of the IT industry, it’s kind of funny, every time there’s a technology inflection-
Patrick Moorhead: And it’s always about and. Sorry, it’s about or.
Varun Chhabra: Or.
Patrick Moorhead: You’re going to abandon this technology and go to something else.
Varun Chhabra: Well, and the promise is like it’s going to get rid of all of your complexity. And what happens? 10 years later, there’s always more complexity because it’s always and, and it’s not an or. Right?
Daniel Newman: I think we started, the CEO of Basecamp came out this week and he wrote a big letter about how they’re basically moving back on-prem and obviously we’ve seen the a16z conversation, the cloud economics, and I think the reason he gets to do a victory lap, and I’m not a huge fan of letting him do those, by the way, but-
Patrick Moorhead: I don’t know. He did say you had the best point. You caught that, right? I don’t get it.
Daniel Newman: But I’m not score-keeping in my head.
Patrick Moorhead: Yes, I know you, David.
Daniel Newman: But what we are seeing is it was kind of like we were going to try to get to the end and the end was going to be, everything was going to be done in the public cloud and it didn’t take very long for people to be like, “That’s not going to work.” There’s economics, there’s technological reasons, there’s technology debt and legacy. So, it isn’t going to happen overnight.
Varun Chhabra: And you brought up the Basecamp example, but I mean if you think about the sliding scale of cloud adoption and where companies are, I mean Basecamp, I’m assuming, started all in on public cloud. There’s so many companies we work with who are, as you were saying, Pat, the majority of their applications and data, the overwhelming still on-prem. Now, they have aspirations to redress that balance and change it, but it’s going to be a journey. I think that’s what we’re finding, more than anything else.
Patrick Moorhead: But I think we can all agree, first of all, the world is hybrid. It’s going to be a combination of on-prem, or co-lo, or on the edge, in the public cloud-
Varun Chhabra: Multiple public clouds.
Patrick Moorhead: Yeah, and multi-cloud, multiple clouds. And the funny part is, I have yet to talk to a single enterprise, I talk to a Fortune 500 enterprise probably once a week, and there is not a single one that doesn’t have a multi-cloud, but they have duplicative DevSecOps to go across it. And that is just not efficient as it could be or should be.
Daniel Newman: Yeah, there’s silos, there’s more operational silos than ever before. Going back to the complexity. There’s, as you said, DevSecOps, there’s silos all over the place. And if you go back to kind what you were asking about, what we’re going to talk about at the event or what we are talking about, it really is about helping customers make sense of this multi-cloud world and finding ways to reduce complexity. Just in terms of some of the announcements we’ve made, to me, it’s amazing over the last few years, especially over the last couple of years, just to see how much we work with customers that are using AWS.
People think of Dell as a hardware company, but really, customers are increasingly asking us to do more with them in the cloud, as they move to the cloud, as they move applications to the cloud, or as they bring applications back or have a more dynamic balance. So, we announced our enterprise grade project, large storage PowerFlex. We announced last week that it’s now available in the marketplace. It’s a huge step for us. I mean, I can be-
Patrick Moorhead: Big surprise to me, by the way, this PowerFlex is, and it still is, literally this power emanates from it. So many of your customers are doing good with it.
Varun Chhabra: And it’s massive scale. We have customers who are … We have a government agency that is running or supporting 90 different state agencies, running multiple nodes. It’s really built for scale, enterprise grade. So, bringing it to AWS is a no-brainer for us and for our customers because customers want that consistency. They want the same tool sets, but it’s not just about storage. I mean data protection.
That’s one of the best kept secrets about Dell, I would say, is that a lot of people think of us as a hardware company. We’ve been deploying or helping customers deploy data protection software in the cloud, or in the public cloud, for a long, long time. In fact, we continuously get metrics back on how much data we protected. We have over 14 exabytes of data protected in the public cloud. A large proportion of that is in AWS.
So, whether it’s storage, data protection, or even DevOps with supporting EKS. As EKS anywhere is now extending into the more hybrid scenarios, being able to support customers’ dev test operations, you build once, deploy anywhere, that kind of model, there’s co-innovation and customers are asking us for that simplicity across both on-prem and off-prem across the board.
Daniel Newman: It’s interesting, I am not surprised at all. My take is that Dell’s always been a company that’s prided itself on being where the customer is. It’s a very pragmatic company.
Varun Chhabra: Yes, exactly, exactly.
Daniel Newman: You know if Dell’s there, it’s happening. There’s real business. And so, when you say you’re going to do it, I’ve watched some of the things, I still remember the Snowflake partnership, and at first you blink and you’re like, “Hmm.” And then you’re like, “Actually this makes a quite a bit of sense because that looks a lot like what most enterprises do.” Most enterprises can’t get away with a 100% data being warehoused in the public cloud. That’s not the reality. So Dell’s saying, “How do we enable our hundreds of thousands of customers around the globe to be there, but be-“
Varun Chhabra: Yeah, be able to-
Daniel Newman: … where they are.
Varun Chhabra: Yeah, without having to move their data and make it simple.
Daniel Newman: Which takes me to a next maybe topic that I’d love to have you delve into, is the theme that we are seeing is that the trend line from prem to cloud, and cloud to prem, it’s like two trains.
Varun Chhabra: Yeah, ground to cloud, cloud to ground. Yeah, yeah.
Daniel Newman: Colliding towards each other though, as over the last few years, you’ve seen every big cloud providers doing more to make on-prem work. And every on-prem is building more connectors to the public cloud. But why is it so important and why is Dell so heavily invested in making this work? Because, I mean, we alluded to it, but I’d love to get your inside take.
Varun Chhabra: Yeah, look, it really comes back to what customers are asking us for, and going back to that sliding scale of cloud adoption, if you think about two extremes. Customers who are still early in the journey of adopting public cloud for their applications. And then the other extreme is customers who are maybe born in the cloud, if you will. And what we’re finding is there’s, as you guys were saying, is a constant revaluation of what the right model is. And there’s no right answer for every customer.
So, if you think about customers who are still early in their cloud journey or have made some adoption, have driven some adoption for public cloud, but they still have 60%, 70%, 80% of their data in apps on-prem, which is quite frankly, most of our customers. They’re looking for the same capabilities that they rely on us for storing their data, protecting their data, crunching analytics, running AI workflows, et cetera.
As they move applications to cloud, they want to do it in a way … or to the public cloud, I should say. They want to do it in a way that’s not disruptive. They can use the same tool sets. So, that’s the ground to cloud, it’s quite a tongue twister, ground to cloud modality.
And then for cloud to ground, it’s things like what you were saying with the born in the cloud companies who are realizing became depending on their use case, “Hey, I’ve got to think about it slightly differently.” We had a video analytics company, this is two or three years ago, that reached out to us. They were born in the cloud in the Bay Area and their model was, “Hey, customers are going to store their advertising data on … video advertising data or video ads, on their platform.” And then they’ll run analytics all the time.
And guess what they found? As this company was supporting more and more queries, their egress costs were becoming like 30%, 40% of their company’s overall operating expenditure. So, they came to us and said, “Look, we’ve got to figure out a new model. How do we bring some of this on-prem so that we can reduce some of our egress costs? So anyway, I think on both sides there’s just a need for enterprise grade capabilities and have that consistent experience here.
Patrick Moorhead: One question that I get a lot for is, well first of all, Dell Technologies is number one in almost every category of infrastructure. I mean, I see it every earnings, number one, number one, number one.
Daniel Newman: You got that slide memorized, Pat.
Patrick Moorhead: That one slide.
Varun Chhabra: Yeah, number one in everything. That’s what we say, yeah.
Patrick Moorhead: You put a lot of effort in that. What’s the experience like shifting, and it’s not shifting, it’s the and, the experience on Dell infrastructure versus let’s say Dell software, which by the way, I applaud. You guys are in the software business, surprise, operating on AWS infrastructure. How’s the experience? How do you make it a similar experience?
Varun Chhabra: And really, the answer comes down to APEX. You guys have been along the journey with us. APEX is really our initiative to bring all of our multi-cloud and as-a-service innovation in one place, give customers that consistent experience. And really, the genesis of APEX is bringing some of the things that people love about public cloud and the things they like about private cloud everywhere they run infrastructure.
So, you were asking about hardware, software. The model for us as we think about multi-cloud is very simple. It’s really two pillars. One is we want to deliver innovation increasingly either as software or services. So, software is self-evident. It could be SaaS, it could be going to the AWS marketplace and then downloading and deploying it on EC2, like we do with PowerFlex. But services is essentially transforming the hardware infrastructure business to a more outcome-led experience for customers. So, that’s one pillar, software and services.
The other pillar is really partnerships. Multi-cloud is not … I mean, even for some of the largest public cloud vendors, it’s not going to be something that they can solve all the customer challenges on their own. So, we think that partnering with vendors up and down the stack, it could be all the way down into the silicon, to IS providers, to PaaS providers, to SaaS providers. That’s really going to be what the success is going to be like.
And you talk about Dell’s heritage. Another one of Dell’s heritage is we’ve always been an open ecosystem champion, whether it’s on our servers, on laptops, et cetera. So, I think it feels like it’s something that we typically do a lot, very well.
Daniel Newman: So, we spent some time on the partners, we spent some time on the ecosystem. Spend a little time on the customer. How are they adapting to this pivot narrative? Of course, again, we started as cloud versus prem, and now we’re moving to this hybrid and now you’re like you said, but you’re still fighting for, do I start with the public cloud and work back or is Dell our main partner in extensibility to the cloud? How’s that evolving? And as you’ve matured, are the customers getting more comfortable? Any good stories you could share?
Varun Chhabra: Yeah, absolutely. Look, for a company with a customer base as large as Dell’s, there just any one answer. And you guys said it, we want to be where the customers are. So, if you’re on the spectrum where you’re starting early, we’ve got services, we’ve got professional services to help customers rationalize the infrastructure. So sometimes, that is the way things go. In many cases, it’s also the other way around.
So, it really depends on what customers are looking for, where they are in their transformation journey. What I will say though is that it’s still amazing to me, there’s so much that customers, partners, and vendors are still figuring out about the potential of this kind of new world we live in. So, a lot of it is very co-creation and figuring out use cases. And in some cases, it means going down the vertical rat hole or rabbit hole, and saying, “Hey, we are going to build vertical solutions.” Sometimes it means horizontal platforms that scale across the board like we did with edge recently with Project Frontier.
Patrick Moorhead: Are you seeing customers gravitate toward certain Dell services first? I mean, I know you started in backup for a reason, but why there? Why start there as opposed to compute as a service, or something like that?
Varun Chhabra: I think it depends a lot on customer use cases and we think we can add unique value and then also time to market. So, with something like backup, where we have software assets that are differentiated, we’ve got dedup that leads the market, where we’ve got relationships with customers that they’re looking for those models, I think that that drives a lot of this. And that’s the reason why with what we’re doing with Project Alpine, with storage, like what we did with PowerFlex here is the next frontier, if you will, for what we’re trying to do here.
So, a lot of it is driven by where we think we can add unique value. Things like computer as a service, I mean those are on the roadmap as well. We want to expand to deliver a full platform for our customers, that they can use whatever they’re running infrastructure.
Patrick Moorhead: I mean, listen, I thought it made a lot of sense because you’re really good at that and what a lot of people don’t know is you have a very large managed service business doing that for customers already. And the transition to APEX is really taking what you’re doing for a ton of managed service and productizing it, simplifying the front end of the back end. So instead of having hundreds of customers, you can have hundreds and thousands of customers doing it.
Varun Chhabra: And it really requires also, I think a complete end-to-end reinvention of all of our value chain. So, starting from how we source materials, to how we deliver them on time to customers, there’s time to value guarantees in there, or expectations, but even how we sell, there’s just so much change that’s happening. So, that’s another reason why businesses that are very high volume compute, you want to make sure the system’s are working for us before you can put a lot of your massive franchises on that.
Daniel Newman: I’m really watching APEX closely, and I’m sure you are too, Pat, is this is I would consider a real inflection point for Dell.
Varun Chhabra: Yeah, it is, it is.
Daniel Newman: Seeing if the customer can really migrate from one common purchasing behavior to a new one, which by the way, is something that they’ve come to become comfortable with as an operating model.
Varun Chhabra: Exactly, in the public cloud already.
Daniel Newman: But haven’t necessarily completely gotten used to when it comes to the capital expenditures of their own infrastructure. But I think to your point, it does seem like … You and I like crawl charts, we love a good crawl chart and it seems like every one of the companies that’s sort of doing this prem to cloud motion as kind of a crawl chart of services. You’re not going to be able to offer the full complement of services. But there are these common, core, high volume, necessary services that are very difficult to do in the public cloud for these companies have big on-prem. And it seems like that’s the starting point and you build out from there to more granular.
Varun Chhabra: Exactly, yeah. Unique IP, unique value. And then also, like I was saying, you just have to build the platform to be able to support your largest horses as well. And you want to work up towards that.
Patrick Moorhead: Well, when I look at 10 years ago, we used to debate what is the cloud? What is the cloud model. It’s scalable, it might have DevOps, it’s simple, it’s a card swipe, and then you stand back and you’re like, “Okay, I can get that on-prem too.” It’s the cloud, just in a slightly different way. And if you look at how most people make big, public cloud purchases, they’re not swiping the credit card. Those might be the developers.
It is like two year, three year commitments, which is a major commitment that might make sense. So, location is becoming less important, we’re here. Now, final question for you. How do people learn more about what’s going on at Dell this week?
Varun Chhabra: Yeah, yeah, that’s a great question. So, if you’re at Reinvent and attending in-person, highly, highly encourage everyone to drop by our booth, right here. There’s presentations every 30 minutes on where we’re helping customers with their AWS journey. You can see here, ask the experts, there’s whiteboard sessions, we’ve got technical staff here.
Patrick Moorhead: I thought this was us. I thought we-
Varun Chhabra: That’s for you guys, yeah.
Patrick Moorhead: … I thought we were the experts.
Varun Chhabra: We’re the opening the act for the ask the experts.
Daniel Newman: Next time give me a marker…
Varun Chhabra: I’ll put signs here, yeah.
Patrick Moorhead: Pseudo experts.
Varun Chhabra: But whiteboarding sessions, presentations in the booth. We also have, if you’re not attending, there’s blogs, there’s things on dell.com
Daniel Newman: I’m pretty sure Futurum Research did a Project Alpine white paper.
Patrick Moorhead: How about that?
Daniel Newman: On the impact story
Patrick Moorhead: Gosh, I haven’t read it, Dan. I might have to go and do this.
Daniel Newman: I can’t believe sometimes they hear that you’re just not sitting at home, strapped your chair, reading-
Varun Chhabra: Dan’s white paper.
Daniel Newman: … my white paper.
Patrick Moorhead: Dan’s white paper.
Daniel Newman: It’s why we all went to grad school. So, well Varun, I want to thank you so much for joining us here for-
Varun Chhabra: Thanks for having me, yeah.
Daniel Newman: … The Six Five on the road, in the booth. It’s kind of like a hybrid. On the road, in the booth.
Patrick Moorhead: Yeah, in the booth.
Daniel Newman: With Dell at AWS Reinvent. But Varun, it’s always great to talk to you.
Varun Chhabra: Likewise.
Daniel Newman: Very excited about the direction Dell is heading. We’re very bullish on it. It’s going to be a great journey to continue to watch and there’s a bunch more conversations with some of his colleagues here. So, I hope everybody out there can go ahead and tune into those.
Varun Chhabra: Yeah, hopefully I haven’t turned anybody off from all the other conversations, but you guys were great.
Daniel Newman: You did great.
Patrick Moorhead: Not at all. No, I appreciate you coming on.
Daniel Newman: Thank you. Thank you. Thank you Pat.
Patrick Moorhead: So this is Pat, Dan, and Varun here in the booth at the Dell Technologies booth at AWS Reinvent. We really appreciate you tuning in. If you like what you heard, hit that subscribe button. If you have questions, comments, you know where to find Dan and I, we find way too much … spend way too much time on social media. Have a great morning, afternoon, evening, wherever you’re on the planet. Thanks again.