Storage Unpacked Podcast - Storage Unpacked 264 – Hitachi Vantara Infrastructure-as-a-Service

Episode Date: November 22, 2024

In this episode, Chris is in conversation with Jeb Horton, SVP Global Services at Hitachi Vantara, discussing the capabilities of Hitachi Vantara's Global Services offerings, which deliver infrastructure management and infrastructure as a service to its customers. In addition to EverFlex, Hitachi Vantara has a long history of managed services capabilities that span more than just outsourced storage. As Jeb explains, the company also manages storage infrastructure from other vendors, in addition to non-storage systems. The interesting aspect of this discussion is the complex nature of the interaction between customers and Hitachi. Solutions offerings aren't merely "transactional", but have a human aspect and are tailored to meeting the specific goals of the customer. This conversation explores some of the nuances of working with customers to transfer the burden of infrastructure management to Hitachi, enabling businesses to focus on more strategic opportunities. To learn more about Hitachi Vantara check out the Infrastructure as a Service section on the Hitachi website - https://www.hitachivantara.com/en-us/services/infrastructure-as-a-service. Elapsed Time: 00:48:02 Timeline 00:00:00 - Intros 00:01:43 - What is “Infrastructure as a Service”? 00:03:25 - What else to customers want from a service (other than cost saving)? 00:05:20 - Public cloud has increased the appetite for service-based consumption 00:06:24 - What is the core of the Hitachi Vantara services offering? 00:07:14 - Hitachi added automation into a “services platform” 00:10:26 - The human aspect involves skills but also relationships 00:12:20 - A service contract involves a detailed commercial model 00:13:51 - Service also means service levels and agreements 00:16:53 - Cloud is transactional, what is Hitachi’s “value add”? 00:19:45 - Data has value, which is the focus of service offerings 00:22:26 - How does Hitachi help government institutions? 00:26:50 - What sort of data issues does Hitachi deal with? 00:28:33 - Data and AI will be a key issue to manage 00:30:40 - How does the engagement process work with Hitachi (and what is EverFlex)? 00:37:15 - What are real-world examples of Hitachi customers and requirements? 00:46:51 - Wrap Up Related Podcasts & Blogs Hitachi Vantara Microsite Storage Unpacked 260 - Hitachi VSP One Updates with Dan McConnell Storage Unpacked 254 - Announcing VSP One and Hitachi Vantara Reorganisation Copyright (c) 2016-2024 Unpacked Network. No reproduction or re-use without permission. Podcast episode #4d3x

This is Chris Evans and today I'm joined by Jeb Horton from Hitachi Vantara. Jeb, how are you doing? I'm doing pretty good, Chris. Glad to be here. Right. Let's start by you introducing yourself to our listeners and then we'll go on from there to talk about what we're going to talk about today. Very good. Jeb Horton and I am the Senior Vice President for Global Services at Hitachi Bantara. So global services, which includes delivering services to customers, of course, which is part of what you do. Global services represents managed services, professional services, and education services. And so we make a distinction between that and our customer support organization, which does all of our maintenance services.

Okay, perfect. So the reason for our conversation today really is to talk about infrastructure as a service. Now, I posted something recently where I looked at the different vendors and what their offerings were. And Hitachi has been one that I've known about for a long time. You've obviously had one particular vendor, sorry, one particular customer in particular, which I'm sure you'll talk about at some point, one of the ones that sort of i i knew about from a long time ago but you've you've had sort of as a service offerings for customers for a long time and i thought it'd be good to go back go back in and sort of explore those i know that you've had a bit of a revamp and you've sort of restructured them recently so we can talk about that as well but you know we're going to dig into

what you offer and what the services are and explain really why people might even consider going down that route in the first place compared to traditional ways of consumption. So from your perspective, why don't we start by just talking about what we think infrastructure as a service actually means, and then we can dig into it in a bit more detail. Sure. I think infrastructure as a service is really a business model whereby an OEM or a GSI provides, it can't get any more simple than this, infrastructure on a pay-as-you-go basis. And I think that what we're seeing in the market

is everybody's trying to decide what to put into that bundle. We'll look at some of our competitors. They might just be storage as a service. We look at traditional outsourcers where they're basically putting everything they possibly can into an outsourced offering. Now, that's probably two ends of the spectrum. I think that for Hitachi Vantara, we started in this business 15 years ago with the expectation of really trying to find new ways to compete. And we went in really focused on offering storage as a managed service. And very quickly, our customers said, well, that's great, but why don't you take on all these other pieces as well? And so we've seen that evolve into what we do today as infrastructure as a service, being a collection of products that we offer our customers in an OPEX procurement model.

Okay, great. We'll go into the detail of those in a moment. I think the first thing I think is worth discussing is what on earth are customers looking to solve by taking this up this route you know we we already know you could go out and buy hardware that that can be expensive you could go out and lease hardware and as long as you've got a degree of credit you know leasing equipment is probably fine so why why go down the route of the as a service other than that really sort of obvious financial thing what else is there there people might do? I think that our customers anyway are looking for a few things. I mean, one of them is the predictability.

So they're going to pay a defined price over time. Now that looks like a lot like a lease because you could do that as well. But once you start folding that and combine that with the operational services that we provide, it allows the customers to say, I'm looking for this particular outcome. And really that's it. with the operational services that we provide, it allows the customers to say,

I'm looking for this particular outcome. And really that's it. And I think once you're able to meet that outcome on a very consistent basis, it frees up our customers to go focus on other things. And I don't think a VP of infrastructure wants anything more than not having to worry about something. You know, if they can take something off the table, they go focus on something else.

And I think that our customers really like the model whereby they can focus on whatever else is strategic to them, but the infrastructure is on us. We put in place a very powerful team that's able to meet an SLA and a certain set of outcomes in a very consistent fashion. And what we've found over the last 10 years is that we do that really, really well. And I think that if you're in the GSI space, you're always trying to figure out how do I meet certain SLAs and there's penalties associated with it. If you don't, I can't remember the last time that we paid a penalty. It almost never happens.

And we just deliver a fairly rock solid service, which on the other side of that, our customers are able to have a certain level of dependability, focus on certain set outcomes and at a certain set price. And so that takes out a lot of variability in their life. And I guess the other angle to that is that a lot of businesses now have become used to the cloud model, shall we call it. I know that necessarily Hitachi might have been there before cloud was as popular as it is today, but cloud in general has become a purchasing model for a technology that people have got very used to.

And I think as a result, they are probably expecting to see their traditional supplies coming up with something similar that allows them to have, as you said, that predictability in cost management. Yeah, we see that model sort of pervasive in not just the procurement side of it, but the whole idea of going to a console and being able to understand what you're getting out of your cloud provider, what's performance metrics, things of that sort. So that whole paradigm is that customer experience, as well as a certain predictability in terms of what you pay, a certain ability to scale up and scale down. So I think that the cloud providers have really changed what customers should expect out of an infrastructure provider. So let's talk about Hitachi in general, then. Let's talk about your product offerings,

and let's try and work out exactly what you focused on and how you're sort of building that portfolio of, you know, we can call it features. It could be certain aspects of it. It could be the things that actually make your offering different, say, from other vendors. What is it that Hitachi are doing? Sure. There's a few things that are different. And I think that, let me go back a little bit in time. When we got into this business, customers asked us to support not only our product and deliver that as a service, but they said, hey, I want you also to take on your competitors'

footprint and run that for us. So we said yes to that. And then we folded in network switches, things of that sort. So we ended up having a bundle of products that we were actually supporting. We looked at that and said, okay, that's great. We actually have to drive out the cost of servicing that. And so we had to look at what kind of automation can we bring to the table? And that spurred us four or five years ago to make a substantial investment in our platform. And so what we've been able to do over the last four or five years is really build on that customer experience. And again, the whole idea is to change that experience for our customer, to give them the ability to go to a console, invoke a certain set of automations, be able to track anything that is that might be important to them. We provide hundreds of different pieces of data to track capacity and track their billing and so on, but a wide variety of data.

So it's all of a sudden that sort of cloud-like experience is being delivered in an on-prem fashion. And so what we've been able to do is combine that customer experience with a model that provides support across a wide range of products. Of course, at the core of that is Hitachi. Itachi, but we're really trying to ensure that we support an ecosystem of products and thus deliver infrastructure as a service for on-prem in that cloud-like fashion. I'm quite interested by the fact that you would take on other vendors' technology and manage that for them. I'd imagine sometimes that might be as part of, say, some sort of outsourcing deal where over time you might replace it with your technology, for example, and that seems perfectly

reasonable. Why wouldn't you um but at the same time i think it's quite an interesting interesting aspect because it it's it sort of focuses on the fact that what you're delivering is a service it isn't necessarily you just repackaging your own products into a you know just a different way of giving the customer that product it is actually delivering an actual service and that that to me sounds a bit different. It is a little bit different. And I think it gets back to that outcome approach. And I think that when you think about customers, yes, they're buying Hitachi, but they're buying

other products. Let's just say it's this whole storage footprint. Well, they've basically turned that over to us. It's probably a little bit different for us because we're quite willing to take that on. Yes, I'd be very happy to replace every competitor product with our storage product, but that involves other risks and things of that sort. So it's a nice thing to be able to say to my boss that, yeah, taking on our competitor products and providing services for it gives us this opportunity. But in reality, the storage capabilities for our team extends to other products pretty

easily. So being able to take it on is a natural for us. And then being able to fold that all together as one outcome being delivered to our customers is a bit of an advantage. One of the things I think that's interesting with that, and just as a bit of background, I have actually been on the customer side of an engagement with Hitachi where you weren't strictly outsourcing it, but you were providing services to us. And it was very interesting because one of the things that was sort of key to me looking at that was that engagement with people and that engagement with skills. So having

people who, who potentially had a very deep knowledge in certain areas that would have been longer take, it would have taken longer for us to learn that or to get that and onboard it and, and so on. And I think with all of these sorts of things, there's a, there's a human aspect to this that has to be covered and has to be discussed. Absolutely. I think that the human aspect really can't be underestimated. We like to manage our business with typical labor arbitrage, move things into an offshore model to get a more cost-effective delivery model. But time and time again, our customers really like interacting with people that are in their office, on the ground, day in and day out. And what we try to do is find a nice balance between an onshore team that's in the office interacting with

our customers, with an offshore team that takes care of all those sorts of things that can be done offshore, be done remotely. And that balance, if you get it right, you end up with a very happy customer that says, I like interacting with Dave, as an example. And I'm thinking it is actually Dave when I'm thinking about this example. And Dave does a really good job of making sure that our entire team is focused on the problems that they have at hand. And that might be hundreds of people. And often it is. But that team that's in the office day in, day out, working to solve and working to collaborate on particular problems is really critical to our business model. And it really can't be underestimated.

Yeah, absolutely. Okay, so that sort of gives us a good idea of some of the aspects of your product offerings. Unless, of course, there's anything we haven't covered there you want to talk about in more detail. But I think we've covered the gist of it. I could go on and on about what we've done, you know, with our customer experience. But, you know, it really boils down to a few things. I guess the one that we haven't spent a lot of time talking about is really the commercial model and how we put that together.

I guess I would add that because it's a good deal as a combination of a good user experience and trying to ensure that that's delivered effectively. It's a good human interaction, having the right people on the ground. And of course, putting the right commercial model defines that in a cost model that works for our customers as well. What we try to do is predict what that footprint is going to be on a multi-year basis. Some of our deals are long, you know, seven years, five to seven years. And so we try to work out what the forward pricing is going to be in our products. And so once you start thinking that way as the manufacturer, you start to think, okay, I know that I can get to a certain price point in three years time.

So when that refresh comes around, I'm going to be get to a certain price point in three years' time. So when that refresh comes around, I'm going to be able to actually deliver at a cost model that's effective, not just today, but also three years from now, five years from now, six years from now. I think that has helped us have an extremely good renewal rate with our customers because we're constantly in the position of trying to work down what the cost per unit is, both on the labor side, leveraging offshore and labor arbitrage, but also on the product side,

to be able to ensure that we deliver predictability as to what that price point is going to be on a multi-year basis. And part of that, just to finish that off, Jeb, I think is you are actually delivering to a service. And of course, that means you're not delivering a product that sits on the floor that does a particular thing. You know, you'll have service levels, you'll have platform and equipment service levels in terms of things like response time and latency, all of that sort of stuff. But you'll have service levels that sit outside of that, that talk about how quickly you can

grow that environment. You can upgrade it, you know, all of those sort of things. And I guess hopefully you'll have everything that includes maintenance and outages and downtimes or the lack of those in order to do all of that. So the service encompasses an awful lot for what you're potentially building into that cost model. That potentially has to cover a huge number of additional services and maintenance tasks and everything else.

There's an awful lot to it into that, I think. There is, and it prevents a great opportunity for our back office team to put together enormously complex Excel spreadsheets to figure all of that out. I hate to say it's in Excel, because it should be more sophisticated than that. But certain things are.

Certain things are still. We haven't got past Excel, have we? Excel still seems to be the tool that everybody depends on, even the people doing AI. Yeah, without a doubt. It's hard to escape columns and rows. It's just a great format. It'll work something out.

Absolutely. But to your point, there is an enormous amount of complexity. And when you start thinking about support and maintenance for our products, we also then provide or have to kind of work out the support and maintenance for other products. There's refresh rates around all of it. There's backline fees that we're paying. There's agreements that have to be in place. There's back-to-back agreements. And how do we ensure that we can continue to meet the customer's expectations around certain, you know, price points? I mean,

it just goes on and on and on. And not to mention, we have, you know, BMW as a customer, and their business is affected by steel, which is affected by the war in Ukraine, which then turns into how they manage their factories, which then turns into how they manage data. Externalities come into play as well that we didn't really anticipate, and we have to be able to flex up and down in a way that makes sense for our customers. And so the complexity in that business model also has to have a high degree of flexibility for it to work. And if it's not, then you end up in a bad situation. I think that we try to make sure that the payment side of all of this covers, is able to adjust for all of these complexities to ensure that, yes, we're going to meet certain outcomes and we'll do that over time and we'll flex up and down as a customer needs. And all of that then ties together into an experience that's one built on consistency and meeting particular needs

at a particular price. Absolutely. So let's talk about value-add a little bit. And here's my thinking about how we can phrase some of this discussion, I think. I was just thinking as we were getting to the point where we just reached in the conversation around the fact that a lot of the cloud side of things is very transactional in nature you know you go on and you want a particular thing and unless you're an enormous customer but potentially your engagement with the cloud is very transactional you buy a service you stop using a service and i think if you're going to be a company

like attache coming to give me services of any sort i'd'd like to understand what I get out of that in terms of value add. I would expect a bit more of a partnership type thing. That's, you know, you're going to help me see things that I couldn't have seen previously and maybe bring skills to the party I didn't already have. You know, there's a million and one little things I think I would hope you would bring there

that would give that value add. So what do you build into your service offerings that actually give you that? I think that we're constantly looking at you know the customer set of problems and saying okay where is it where are some natural adjacencies and um you know one i had this conversation actually yesterday and we're just brainstorming around a particular client to answer this particular question for somebody else. And what we find is that we have depths of skills around data and data management. Yes, that storage of that data, but also extracting value out of that data.

And there's a couple of really good examples where our customer was faced with a complex reporting requirement from a regulator. And we were able to go in and index that data and provide insight and a reporting capability off of that data to satisfy some pretty stringent regulatory requirements on broker-dealer transactions, as an example. And that comes up again and again, which is sort of interesting. We found that, you know, Hitachi gets involved a lot more in these sort of regulatory sort of questions than I would have expected before joining, I'll say that. And so that's sort of a value add that we're able to bring. And I think that in this whole, you know, realm of data management and figuring out where to place the data, how to retire the data, how to manage it, how to do it most cost effectively, as well as gaining insight into that data around complex regulatory requirements, be they PII or finding out somebody's doing some insider trading, is sort of the realm that we're looking to actually be able to go deeper with our clients. There are natural other things that, if you think of managing infrastructure,

can you take on other products and natural adjacencies? Well, yes, we do that. But I think what gets more interesting is when people ask us, hey, how can you help us solve this regulatory problem? Yeah, the data side, that's an interesting one, isn't it? Because ultimately, funny enough, before you were Hitachi Vantara, you were Hitachi Data Systems. And, you know, there was a good reason why that name was, it wasn't Hitachi Storage Systems, it was Hitachi Data Systems. And that name, you know, I know you don't use it today, but it clearly had a sort of deliberate

choice around it that highlights the fact that actually what you're trying to do is manage and help customers manage their data. And that becomes more of a partnership, I think, because the data is the asset and it's the value for the customer. So by having services that can help you understand that, that actually is really probably what customers want. The infrastructure management

and the infrastructure operational side of things is not necessarily byproduct of it, but it's just, it's sort of incidental into the fact that the reason that you're there is to help customers manage their data. Yeah, it's sort of an interesting, you know, problem in this, you know, in this industry is that if you're focused on just providing storage okay that's okay there's value to that if you could probably park that you know a capex transaction buying a storage device as probably the you know least complex part of this whole process and um you know the the customer that's doing that is having to find other ways to extract value out of that data. They'll do it themselves.

They're working with other partners. So they may go to somebody and say, I just want that device. I got everything else covered. But the fact is still there that somebody has to do all the other stuff. And I think that our approach to this is really looking at how can we actually help the customer manage that entire ecosystem of questions associated with data on those devices. And that's a higher order of need. And at the end of the day, that's why we're in this business anyway, is because we're trying to figure out something. The storing of that data is important and has to be secure.

It has to be stable. But at the end of the day, that should be table stakes for everybody. And then being able to derive insight into that data ends up being able to provide greater value back to the organization as a whole. So you mentioned obviously PII and that side of it in terms of, I guess we'll class that as regulatory sort of requirements that people might have. On a slightly different tangent, what about governments? What about, you know, agencies and various other people who are going to come to you and expect probably something slightly different? There must be a bit of a uniqueness around that sort of thing for for m vendors to be able to offer i would have thought well there is um i think that we provide a you know a lot of uh you know services to you know products and services to to governments government institutions i think that um they're looking from a technology perspective for many

of the same things that a large financial institution might be looking for. It's got to run, it's got to be stable, it's got to work, have a massive degree of uptime and so on. I think that what we find is they're also extremely shorthanded and are often in complex relationships with a large number of providers and are having to figure out how do I bring all these different pieces together? We work with government institutions in a model where we provide storage as a service, provide other add-on services as well,

or we go back to back with another provider where we are a subcontractor to somebody else that's in that relationship. I find the government transactions to be a lot more complicated than I'd like them to be. I sort of wonder about how governments are trying to manage their own cost structures given how complex they make it. But we have to be very flexible in how we actually provide our model

back into that ecosystem of providers. I did do some work looking at one of the US four-letter agencies, spent a couple of months putting together what was potentially going to be a bid for outsourcing and taking all of the storage and managing on their behalf. And yeah, it was an interesting time. The engagement process and following through the RFP and all the stuff they had for it was an interesting time. The engagement process and following through the RFP and all the stuff they had for it was very interesting. And you looked at some of their requirements,

you're thinking, okay, that's interesting. I'm not sure why that would be in there, but clearly there are differences and you do look at it and think, yeah, there's some challenges to delivering that. But I guess it's probably no different to, as you said, a large organization that's got many locations, many sites.

And as a result, it's just complex. large organization that's got many locations, many sites, and as a result, it's just complex. And maybe there's part of the discussion there that's one of the things that's really important. There are probably few organizations who can help somebody who's very complex because it requires a lot of different views, different skills, different technologies. So dealing with complexity is probably very hard when you're going to deliver something as a service. It is. I think that if I look at one particular financial institution comes to mind where we're the service provider, 25 locations, they deliver services across, I think, 75 different countries out of those 25 different data center locations.

Very complex set of systems. And at the end of the day, we've tried to organize that in such a fashion that they're paying a monthly fee. They can depend upon us to make sure that that infrastructure is up, always running. If there's an issue, we resolve it quickly. And we can do that on a global basis. But you're right, once you start thinking about that complexity, and the back to back arrangements that we have to have to be able to support

center in Pakistan, just as well as we do one in China's and one in Singapore and one in South Africa. Now, all of a sudden, yes, the level of complexity is very, very high. But on the other hand, large financial institutions find ways of making money anywhere in the world, and they need to have an infrastructure that can flex with their business model. That's a global business. They'll go anywhere to figure out how to get a deal done, and we need to be there to provide the data and ensure that's always up and running to make you know support transactions or acquisitions or you know regulatory issues and things of that sort yeah absolutely so okay one last question then just uh we sort of briefly touched on high level services and you sort of

touched on the data side is there anything else around that side of things on data management you would do? You know, it could be anything, I guess, from looking at efficiencies to protecting data to identifying PII to helping people build data pipelines. There's a lot of technology that you've got in your wheelhouse that allows people to do things like that. I just wondered if any of that came into that discussion. Yes. I mean, I guess there's a, it'd be nice to be able to organize this in a really nice way, but you know, that we get involved in a wide range of issues associated with the data. Now, some of it is, do I have it in the right place?

Another might be, we're going to close down a data center and move a data center. So then there's a migration of that data to move it into the right place. That's pretty mundane, but it's also very expensive, those types of moves. And we bring expertise on how to do that in a very effective and efficient way. Then there's arriving insight from the data, which is, I think that's sort of the pinnacle of what we're trying to do. But organizing that data for those type of analytics is critical. And as you see with the advent of AI, those data pipelines and managing data and organizing that in a way that's cost effective is going to be the big problem that we face in the next five years

and so we see that and that now we start to touch on some of the most you know complex algorithm driven you know types of problems to solve uh and to be able to do that you've got to have the data well organized in the right place and um curated and managed and you know these are all the sort of direction that a good service provider needs to build skills and needs to build depth and skills to be effective. I look at this business in that fashion, of which managing the infrastructure is core, but for us to be effective,

we've got to do more than just that. I think that the AI side of things is going to be really interesting in terms of data management. And the reason I say that is I've had lots of conversations with people recently where I hear lots of people telling me, you have to have your data in order. You have to have your data clean. You have to understand what it is, the value of it. And this is a conversation actually we had with one of your, I think he's now an ex-colleague but was one of your colleagues some months ago or maybe a couple of years ago when we were talking about data and data pipelines and how you manage it and it's really interesting to see that

understanding your data assets and knowing where they are and managing them and being able to quantify them is now going to be even more important than it was previously and there's a lot of people have been very sloppy around that and not having that sorted is going to be a problem. So anything we can do that gets those ducks in a row, I think is going to be really critical. I think so too. And I think that we'll start looking at not only that,

but actually we've got to figure out how to ensure that we can move that data fast, cheaply. And so then we start looking at, okay, where is it located? What, you know, we have network constraints, things of that sort. So, and the volumes are massive or can be massive. It can be small, it can be massive. And so now you start looking at, well, how do I actually do this in a way that, you know, doesn't tax the network, doesn't, you know, tip things over, doesn't explode on us. So I think what we'll also find is that there's going to be an explosion of ideas

on how AI can actually improve a business outcome. Not all of them, of course, are going to work. So then you've got to be able to test often and eliminate things quickly and easily, which is going to put a whole lot of burden on an infrastructure provider, infrastructure services to be able to adapt as fast as one needs to in supporting huge numbers of experiments with large numbers of data and doing it in a very, very cost-effective way. And they're not going to want to move it in and out of the cloud every single instance that they want to test something.

So there'll be opportunities for service providers to figure out, here's how we can help you actually test things quickly. Yeah, I'm looking forward to seeing how a lot of that's going to come together. Now, okay, so let's talk about engagement process. You know, somebody comes to you and says, we're interested. I think this might be a good opportunity, by the way, just to cover off in Everflex what the different services are that you offer, because we haven't really sort of explained what your different offerings are.

And this might be a good opportunity to do that. So what is a typical engagement process if a customer comes to you and says, we need your help? And how would you do that? You know, would you do site audits? Would you sit down and do TCO calculations? You talked about, you talked earlier about expected outcomes. What can we expect that would happen? The conversation usually begins with, I, you know, as a customer coming to us and says, I have this footprint. There's an Hitachi piece. There's other component parts. I've got some servers.

I don't want to run this anymore. I'd like you to take that on. Or it might not be you. I'd like you or somebody else. It's often a competitive situation. And so we won't say. But the first order businesses understand what's in the box, the bread box. And so that doesn't have to be a

site audit. I mean, we can simply say, let's give us the data. I mean, ultimately it needs to be validated that what they say is there is actually there. We can do that and do that. But it really just begins with, here's the footprint. Then it becomes a question of, well, we've organized our services into what we call consumption, which is sort of low level of services. And really what we're trying to do is offer our storage as a service with flexible consumption model. The next level up is foundation, where we introduce our platform to manage our infrastructure plus other infrastructure. So once we get into foundation, we start having the conversation about how we can manage everything

that's in that box. And then we get into managed services, managed, so consumption, foundation, managed. And in the managed realm, we inject a deeper service model. And at that point, we say, okay, well, we've given you everything in consumption plus foundation plus a whole team that will manage that for you. And then once we get down that path, we start having the conversation about, well, what outcomes are you looking for? Is this a cost exercise? Is this a cost exercise? Is this a massive growth? You expect to double the size of your environment in the next five years, and you don't want your resources to focus on the management of it.

You want your resources to focus on how to, say, manage that growth and do it in an effective way. And then we say we will deliver this infrastructure as a service. We will flex up based upon your model over the next five years. We'll ask the question, do you expect, you know, what's the age of that equipment? What's the capacity that you're running at today? At what point in time do we need to inject other equipment? We do a refresh.

And now we've built out the building blocks of a financial model. And then we go through the negotiations to say, this is what this looks like. And at that point in time, usually something's come in, things have come out. We often have to figure out how we can reduce that cost basis on our own end. And then we think about, okay, what's the degree of automation? And that gives us the building blocks of a deal. What is layered into that often is an automation plan whereby we have the conversation. What of this can we actually automate in order to give both our customer a better experience as well as reduce what it costs to actually provide it?

And that also is an expense that we bear. So oftentimes we will build into our plan, spending hundreds of thousands of dollars to ensure that we can hit an automation plan that enables us to really run this very, very effectively and that it gets better every year over the course of that engagement. So that's then a plan of record.

And we have an automation plan. We have a degree of services that we've set expectations on what the customer will be able to get from us. We have a defined set of SLAs. We're working towards a particular outcome in how this all gets managed. And we now have a big contract, bigger than it should be, that lays all of that out. And then off we go. And you can imagine, one more thought,

you can imagine that that's pretty easy for a small enterprise that might be small, might 500 million a billion under a million when you get into a hundred billion dollar enterprise all of a sudden that becomes a ton more complicated absolutely and obviously that you know doesn't that we haven't even discussed things like milestones and review periods and all of the stuff that you would normally have within that there'll be all of that there too yeah yeah i think in in it we've um really done a great job of introducing enormous levels of governance yeah and process complex agreements yeah i don't think um everyone envisioned where obviously no one envisioned this you know 50 years ago when we were you know rolling out our mainframes and trying to figure out how we do things faster better

cheaper you know 50 years later it's an enormously complex organization with enormous levels of governance planning milestones and it's a it's a great art now to be able to put all that together and make it easy to consume. I think we thought we'd only need about 12 mainframes. I can't remember who said that, that we'd only need a certain number of mainframes. Clearly not. That's right.

You know, there was an initial statement, wasn't there? I can't remember who said it, but we think we'll only need 10 machines. But that was ridiculous to think that that would ever be the case. I think that was the early days of IBM. I can't remember who said it, but we think we'll only need 10 machines. But that was ridiculous to think that that would ever be the case. I think that was the early days of IBM. I can't remember. It was. Yeah.

Yeah, it was. I'd have to look that quote up. I can't honestly remember. But no, I mean, the world's exploded in terms of IT and technology and data and all the rest of it. Briefly, and we haven't really touched on customers. And I think sort of as we sort of wrap up, I think that might be a great place to sort of to finish is to talk about some of the customer stuff you talked about some size of potential deals be interesting to hear about you know what type of customers you have and some examples around the sort of things you're doing for some of those

large customers so our customers range in size from i I'd say some of them are fairly small in size and scale. And then they scale up into, I mentioned $100 billion, but yes, there are some $100 billion enterprise level customers. I think that the common thread in all of them is that they have an interest in Hitachi from a technology perspective, and they want that technology but don't want to have to run it. And we give them an opportunity to say, hey, we'll do that for you. We tend to do really well with financial services. And if I look, whenever I come up with a top 10 list, which I get asked about on a regular basis, hey, we're your top 10 customers. It's interesting that of those top 10, probably six, seven of them are financial institutions.

And these are ones that are well known globally. You can pick any, probably. I wouldn't say any, but there's probably very few large banks in the world that are not an Hitachi customer. Now, that doesn't mean they're a services customer, but we do tend to do really well providing infrastructure as a service to large financial institutions. But then there are also airlines, manufacturers. I mentioned BMW earlier. I mentioned that one because we have the authorization to be able to say that one. That's all I can say.

Because you can. But those types of organizations are big and complex and really are trying to, again, reduce the complexity in their IT world and look to us to be the provider. But it's not to say that we don't have smaller customers as well you know if i look at um you know our business globally there are you know institutions sometimes there are divisions too i mean we have a customer right now in in australia that's a small bank that was bought by a larger bank and but this small bank operates very independently and provides services back to that smaller bank in an OPEX fashion. It's a very small deal, less than a million dollars. And that's a multi-year basis. So it does scale. I don't want to give the impression that we're only targeting

very large institutions. I just talk about those because they're big and complex. But sometimes we do have a fair number of customers that are smaller in scale and just say, hey, I want this. Can you deliver that as a service? Sure. We'll provide the resources to back up behind it and we'll offer that to them. I think this is important because, and the reason I said that is because when we started this conversation at the very top, we talked about outsourcing is one word i mentioned infrastructure as a service and probably a lot of people may have had a view that was very similar to the consumption model you get from the cloud because we talked about cloud and and thinking that what you're giving

me really is the same products you could have sold me in in another way you know storage products and so on but just structured so that i can buy per terabyte or buy per per gigabyte and and it means that i could scale up and down and obviously having gone through this discussion that is clearly one aspect and that's definitely the case but you've obviously highlighted that there's no there's more than that there are levels of choice around how deep you want to go into this and how much you want to have outsourced to you and managed by you and it sounds like although you've got specific service offerings within that there is a degree of variability so if customers want to give you more control you're prepared to take that on if they choose

they don't want to you're prepared to sort of let them keep what they want but ultimately you have a variable sort of let them keep what they want but ultimately you have a variable sort of line there about you know you'll take whatever the customer wants to give you in some respects you know but it's up to them to sort of work with you to work out what their requirements really are that's exactly right i think that um you know we could have i think there's there's two approaches you could take in this business model. You could say, I'm only going to offer storage as a service, and that's it. Everything else is peripheral, not interested, and focus really on that. That's one approach.

Another approach is going to be, and this is the GSI Well, we'll take on everything. And sometimes having worked at one of those places before, you take on things you don't even understand and you find out after you've signed the contract that you're going to lose all your money on that one particular thing that you don't know anything about. We try to, as a storage provider, we try to focus on that and do that well.

But there's a natural set of adjacencies that are bundled loosely as called infrastructure as a service. But there's some natural set of adjacencies. And we find that it's useful to take that on because the customer actually has created that bundle themselves to optimize whatever they're looking to do. And so if we can work with them to optimize how we actually can do a service delivery of that bundle of goods, then we're going to be really helpful to them. And I think that that bundle is really important to, you know, be good at. And the skill sets that we have have some natural, you know, capabilities to extend into other areas. And so it's really easy for us to be able to say, we can take that on as well. And I think that if you looked at any IT shop, you always have a few

people that can cut across, you cut across different products and different skills. Well, we're no different in that respect. And so we're encouraging the development of our talent base to be flexible and be able to do a variety of things because it gives us some flexibility. That's also the natural way that the IT is going, where you've got to be really good at certain things. You've got a set of resources that are good at multiple things, and you've got to figure out how to blend all that together into an outcome that makes sense for a customer. And so we do that, you know, pretty well. It's interesting. Somebody told me probably 25, 30 years ago that because of the rate of change in IT, you lose around about 25% of your skills every year, just simply because

they don't become relevant anymore. And therefore, you know, so every organization has a challenge to keep up with those skills. And I think sometimes going to an organization that is focused on doing that because they deal with so many different customers. And that's, you know, part of the managed service that they're going to have to deliver sometimes going to somebody else to help you do that is possibly a better way than thinking you can keep up with everything yourself because there's just so much to keep up with nowadays and that problem is getting worse over time so i think sometimes partnering with somebody and saying please take this on for me and look after it it can actually be more beneficial than trying to run and keep up

with things yourself i think that's entirely i think it's very true i think about um you know where what work what what i've forgotten how to do over the last 10 years unfortunately it's probably a high a high number but um i think that you know we're really rigorous about the training and development. It's something that I think is really important. And I spend time with our delivery leads on a regular basis and look at the certifications that we've done. And we track all of this. For our team, there is a constant stream of training that we're doing in order to manage that talent base to be able to support. But if I was the CIO of one of our customers, yes, I want my team to be constantly learning things. have for my infrastructure is that I'd rather have somebody else stay on top of that because I know that I've got to take my talent and focus them on a demand for my CEO that says,

hey, what are you doing about AI? And is this something that's going to eat our lunch or is it something that's going to enable us to eat somebody else's lunch? Well, I want my core leadership to focus on that problem and be able, if I can lean on a provider to make sure that my infrastructure is up and running and meeting the outcomes that I need, that's fantastic. It's like I can now focus on something else, which is a pretty good business model for us as well as them. But it does require us to constantly invest in both the hiring, training, and development, and actually ensuring that we're doing that in a really good way.

I think we're doing a lot of good things there. If I look at our attrition rate relative to norms in particular locations, it's very low. I have to say from a business perspective, it's probably too low, but we tend to do a really good job of providing an environment that supports training and development and gives our people an ability to build their skills. They're probably still also losing 25%, but then we're hiring new people as well.

So hopefully they backfill that 25%. There's always new people. Yeah, absolutely. Okay. So I hope that this has given people a really sort of good insight into thinking a bit differently about the fact that

when you talk about managed services and infrastructure as a service, it doesn't have to mean purely just, oh, look, I've got a box and I pay by the gigabyte. Hopefully people have realized there's a lot more around the engagement, the interaction, the value add,

and all those other things that come with this. So in terms of people finding out more, Jeb, where can we point them to other than just going to the Hitachi website? Is there anything specific that you would like them to head to look at? Yes, if you go to the HitachiVentara.com, you'll see our website.

But within a couple of clicks you'll find infrastructure as a service and so if you look under services on our website you'll see infrastructure as a service as one of the menu items if you click on that you'll find uh information on all things that we do you'll see some use cases and customer testimonials and things of that sort and there'll be links into PDFs and that will give a great deal of information about what we provide. Great. Okay.

Well, Jeb, thank you very much for joining me today and look forward to catching up with you soon and finding out what else is happening in the terms of infrastructure as a service and infrastructure management. For now, thanks for your time. Thank you.