live from San Francisco California it's the queue at vmworld 2014 brought to you by vmware cisco EMC HP and nutanix now here are your hosts John furrier and Dave vellante okay welcome back and run live in San Francisco California this is the cube vmworld 2014 our 50 year covering vmworld I'm John for my coach Dave vellante Sanjay pune in the EVP and general manager end-user computing friend of the cube he's been on throughout his career at SAAP that he moves right across the street to VMware last year and great to see you great good to see back in the cube Thank You John's pleasure to be what a year right so last year you came on board guns blend Pat was really excited you've accomplished some of your goals I think you laid out I said what's your goals for next year you laid out some goals and then big acquisition AirWatch securities hot mobile was booming we are living in a multi cloud mobile infrastructure demand tell us what happened over the past year obviously big M&A give us the details yo John and Dave I was like on day like point five day one when I came down there cute but I was actually watching the replay and I'm like I actually said that and it made sense no it's been a great year and its really been a team effort so the first thing that I did was I said you know well before we decide the what and the how I really want to figure out who's on the bus so we really both kind of promoted a couple of key people within the company like kid Kohlberg remember kid was like the star of last year's show he's now our CTO and user computing what hired a couple of rock stars for the industry like summit the lawn and a few others who've really come in and shaped us and then as the team started to gel we then began to ask our customers what was the key missing part in our strategy and it was mobile it's very clear and we began to then ask ourselves listen if we're going to get into the mobile space you know do we build do we buy to we partner and we were winning deals in the desktop space primarily against Citrix we compete in there getting a lot of market share but the mobile space we'd lose deals and I go and ask our customers who you pickin and eighty ninety percent of time was AirWatch same time our CIO was doing an evaluation internally we were running on an SMB tool fiber link that then since got bought by IBM were running out of steam with it because as SME tool and I said listen you evaluate the market look at all the options and based on what you pick will probably influenced our acquisition decision they love their watch do so you know those were two or three key moments it's the franchise player in the team right I mean ultimately ultimately you know Mobile is today kind of that sizzle point if you're talking mobile cloud it is the sizzle point John Marshall and Alan dabiri came in they've added a lot so you know I talked to my keynote about three core pillars desktop mobile content collaboration we really feel like today when I was looking back we had a tenth of the portfolio last year this time and I think you know lots of good vision but now we actually a vision and substance right i think is pretty powerful so is it the lebron james who it was the is that the Tom Brady is it the Ray Allen you know the key role play I love basketball all those teams are great i think i'm some of my favorite all the Phil Jackson teams yeah my role is really to be the coach and to bring into the construct the Michael Jordan the Scottie Pippen's you know all that construct so that when you put together a world-class ski I really believe we have the best end-user computing team in the industry bar not and this team really is now packed with people and process and product innovation and that's what you've seen the last 12 months it's a real tribute to this fantastic and use a computing team so as you talk about the news this morning around SI p we didn't catch the detail that we were on the cube here can you just take us through some of those some of those key highlights I mean clearly I have a soft corner for a safe as you would expect that was there for seven years and have a tremendous respect they are the leader in business applications a tremendous player you know hundreds of thousands of customers and what we felt was if you could marry the best of breed aspects of what sa fie does well applications mobile applications cloud applications on-premise applications all of that what we do very well which is management and security for mobile and that's what our customers have among the 13 thousand customers of AirWatch probably the biggest basin enterprise rsap customers and they've been longing for better integration you know you but I what's going on over there you know we asked you I mean listen to the end of the day we want to do what's best for customers and you know so packed bill mcdermott myself talk Kevin ruchi bharani who was on stage and we felt that we could build integration between the mobile apps and the mobile platform of SI p where s if he is very good with the management and security of air watch where we're very good you get the combination to best debrief and I think the customer quote in that press release put it well so G Abraham basically said he was a CIO sigma-aldrich we love the fact that you're bringing together the best of breed aspects of mobile security from AirWatch with mobile apps and mobile platform Mississippi and that's a nessuno abdur for the enterprise because of reality because the challenge people are having is it was taking it was too hard it was taking too long so how does that change now with this integration I mean in essence era what AirWatch provides is an elegant simple cloud centric mobile management security solutions much more than MDM device management at Marikana management and you know in every ranking by the analyst they are the undecided gold medal now you can basically use that solution and make sure that your applications also work so let's say you're bringing up we showed in the demo an example of essay p medical records or maybe SI p furia Psychlo whatever have you you can now bring that up on a device that's secure and the posture is checked with their watch and that's the best combination of both and this could just apply to any application it could be a box it could be our own content locker SI p is a clearly the leader in business application I start sweet recently and said VMware working with apple and United Airlines to bring mobility airplanes all secured by air watch obviously United Airlines big customer GE and other things so the interface to pretty much everything whether it's big data is going to be some mobile or edge device is that the number one requirement that you're hearing from customers that it's not just mobile users is the Internet of Things part of this how do you see that that's interesting piece is that is that true don't absolutely I think well I talked about the United Airlines case start in fact it's right off the website of Apple you go to apple and look at the business case studies they have the United Airlines is one of those case studies in the case that is actually pretty simple you know you've got these pilots that are lugging around 30 40 pound bags lots of paper manuals their flight landing instructions now those are being digitized with iPads in the cockpit so as you think about what the future is everything goes digital that first invades the cockpit then the flight attendants habit so they can check to make sure they have a list of the passengers and they can serve their passengers better and that's the way the world is moving but then you take that same concept and you extend now to machines where every single potential machine that is on the Internet can be tracked can be managed and security and our proposition there is to manage and secure every possible machine and thing and then analyze the data coming out of it we think that's a huge opportunity FML touch in Chicago last year and the chairman of the United told me a one percent savings in efficiency just on just on gas is billions of dollars of real savings so you know this brings back down to the the whole concept it's not just an IT thing it's a business process thing so how far along are you seeing the customer base on things like this is it is where it's--okay IT got workers out there you know bring your own device to work okay but outside of that what is the the uptake if you will on really connected intelligence yeah i think it's a it's and when we have you know 13,000 customers that we've had their watched 50,000 our customers with horizon 500,000 customers we have vmware many of them start speaking and we're finding in a couple of industries and consumer packaged goods and retail industries people are looking at things like for example smart vending in devices medical devices the future of a protected medtronics was on stage and they are a rare watch customer they were talking about the fact that their vision is well beyond just the mobile devices every medical device being protected potentially by air watch you look at oil and gas customers practically almost every oil and gas customers in AirWatch customer there's going to be embedded intelligence inside a lot of the oil and gas machinery and infrastructure that protects people from potential damage we expect to be able to secure that so our proposition in that equation is the management and security of every machine and everything and then the beautiful part of it is beyond just management and security I think the analytics of data coming out of that is a treasure trove of incredible valuable places for big data you know we spoke with bill McDermott when you were also at sa p and they had a very vertical approach and when we go talk about the big data conferences with a Q veterans all this vertical we need to have a vertical niche to kind of be a major player or or even a differentiated niche player but how does that affect your business is it vertical eyes you mentioned a loyal and gas flow but you know airlines is there a horizontal platform that can work across the industries or is it specifically verticals you see up your levels now you're at a different you're the edge of the network what's your take on that do you have to be a vertical player or zero horizontal plane that's a great question Jon I think that as the world's leaf asta scrawing and biggest infrastructure software company VMware that's what we've been going from zero to you know roughly run rate six billion in 15 years there is fundamentally first off a horizontal play that goes across and cuts across many industries but very quickly we find as we were able to package solutions by industries so I talked for example at the keynote about the health care industry and how we were you imagine a doctor walking into their office moving from their office to the ward from their desktop to an iPad to potentially getting into the room and they then have a thin terminal client terminal and then they collaborate with their other doctor that has you know an iPad to healthcare is one example state and local public sector is a different example we're being successful education retail manufacturing we picked four or five verticals I been fortunate in the fact that much of my experience at SAAP was running the industries at SI p so i have a good amount of experience at industry solutions we're certainly not an application's player like i say p where we're going to vertical eyes in a vertical stack applications but you're going to see us drive solutions and when you drive industry solutions and let's say five or ten industries where we're relevant you're going to see our average selling price growth and differentiation is application-specific is tends to be vertical but as a platform product player you're this way yeah you don't wait fundamentally to start with but then you start creating solutions yeah which are scenarios that work in a particular industry to enable those guys exactly and we pick the five or ten industries where we think we're going to go focus and we're starting to see as we do that our average selling price growth everything they have some fools yeah you know what the other thing that happens is that you actually start becoming relevant to a line of business buyer beyond just idea and that's very important I was on the performance metrics give us some data can you share some of that pat was glowing with always performing well so can you share some numbers yeah I'll tell you what we did the last three quarters and growth this is the fastest growing the one of the fastest growing business units in q4 last year we grew thirty percent north of thirty percent in q1 or we announced we grew north of thirty percent again and then in q2 we said we grew north of fifty percent right and now some of that results the contribution of area watch but organic or inorganic we are growing and it's not a small business you can grow from one to two and that's a hundred percent this is a size of a part of VMware's revenue and a growing part of it we're talking hundreds of millions of here is that for ya I mean it's well over ten percent of the revenue and the growing percentage of the total company's revenue I think that this is going to become an increasing part of the embers total revenue total relevance the CIO and because a mobile cloud and a big part of the brand appeal of the inland I mean listen remember is well known as an infrastructure company done very well in the data center but the moment you start talking mobile and clouds you're appealing to the CIO and that's a very different type of conversation we want to raise the appeal of VMware I yield to the CIO and we think mobile it's a big market you guys did the TAM analysis Pat I probably has you doing that but whoever may be Jonathan it's a big chunk of it at his EUC a sizable pardon bigger than it was before and we just have to kind of grow into that Tam and then grow the tam further and that's and you started that kind of throw that sounds getting the flywheel effect going and the problem with VD I was always a cost cost cost and you know so it was a narrow niche this mobile it seems to change that hold concussion for my cost of value you know Dave it's a very good point first off mobile for us means more than just a device it means being on the move and on the move means you could be on the move and you're using a laptop here we got to think about the relevance of how you get solutions on to your laptop and desktop I think part of the reason video I gonna hit a little bit of a bump and some of our competitors have been stalling and declining is it's just too complex into costly and we fundamentally now reinvented a modern stack for desktop virtualization that runs on top of all the great innovation that we have in the software-defined data sound like virtual set like vSphere and a lot of things we're doing so all of a sudden the cost of EDI we can show we take down by at least thirty to forty percent that's a game changer now you add moberly to say listen when you go from a desktop or a laptop to a tablet or phone you've got the leader in mobile security and management AirWatch integrated the horizon this is what we announced with the workspace sweep and the final pillar is being able to share that content in a very simple yet secure way so think sort of Dropbox but all of a security and SharePoint brought you that's the third pillar all three of those desktop mobile and content extremely so you're saying saji the tipping point is the asset leverage that you're getting out of the infrastructure is you move toward this sort of software-defined thing that enables this type of decline in cost and accelerated growth absolutely and that's you know the whole aspect of how software has been done is you integrate things so your lower costs and you make it much much easier to be able to palette and by now either could be bottom premise or the cloud so we're seeing that connection of you know the head and the body think of the body being the traditional software-defined data center the head being end-user computing all the connective tissue muscle fiber blood vessels and so on so forth making that connected now makes us a lot more appealing than telling a customer listen by your data center infrastructure from VMware your desktop infrastructure from Citrix your mobile infrastructure from MobileIron and you're you know content collaboration solution from like 10 different starters right increasingly we think that that's not the way in which people are going to be buying software Sanjay just some highlights from the keynote looking here on Twitter through our little listening tool great reviews by the way electric flying speed she's gonna be CEO someday Pat heads up on that that was coming from the Trident that was this guy without a limiting move on stage when I said fat ought to be thinking about an ice bucket challenge so anyway rights beyond amazing executive really got really great reviews on the twittersphere besides a challenging pat calcium of the ice bucket challenge of which joe 2g already challenged so let's see how he's out of fun again oh fun in all seriousness two quotes i want to pull out from the twittersphere you said software in the modern cars more than the nasa spacecraft awesome comment when I pivot on that in a second the other one was Sanjay is emphasizing the importance of world-class infrastructure so first define world-class infrastructure from your perspective given your industry experience in vision for the future and to talk about how it relates to the modern car were just NASA and the change of speed of Technology you know John when I gave my keynote i put this beautiful picture of this incredible modern architecture in single protocol to marina marina bay sands tower it's three big towers I think 40 50 60 floors and a fantastic infinity swimming pools at the top and not been a Singapore you got to go there and check out the swimming pool at the top of it but the only way in which you could make those three towers work was world-class foundational infrastructure the three towers by the way was a metaphor to desktop mobile content collaboration and of course the beautiful workspace view at the top of it so the thrust the impersonalist well all of that to us the software-defined data center is the de facto interest so that makes a lot of that happen we feel very very fortunate and blessed to have the world's best infrastructure that makes that happen virtual server storage networking management all of that put together allows me to be able to build world-class towers on top of that and the end of the day it's not just solid it's lower cost of ownership in the opportunity now my comment about the the 1970s spacecraft and so just to say that today we live in a software economy it's not to say that hardware is not important but someone joked that software is like the wine and hardware is like the bottle while it was important but the the software glue really ties Harvard together in a very special way and that's really the genius of what's making everything whether it's a device whether it's a machine even more relevant and that clearly was defined in 1972 spacecraft but today you can see this invading automobile thermostat refrigerator vending machine that we believe the future so how to ask you to shoot the arrow forward what are you getting excited about I'll see the accelerated pace of change from the spacecraft to the car after you mention the United Airlines and Apple it's a well documented as an end user environment certainly the interfaces everything and that seems to be the focus area what's your view what is exciting where's the inflection point enabling technology that you're watching from the foundation only to the top I mean listen i spent seven years at SAAP primarily in the analytics and big data space and then fire that another five years that companies like in thematically and I've just my life has been about end-users and whereas we came in here we coined this phrase which is our big broad vision we want to allow end-users to work at the speed of life so if you think about your life in the consumer world you don't lug around 300 CDs into your car you have an ipod you have an iphone your connect to the iCloud and it's all seamlessly there you watch a movie you start off on netflix you go from San Francisco to New York to Barcelona you may start and then stop you know someplace else and you can you can start exactly where you stop house of cards or whatever have you watching enterprise software has been unfortunately hard to use complex hard to implement and the more that we can make enterprise software simple simple and secure we to do the security part of it pretty good we tend to do the simplicity part so i think enterprise software companies can actually take a page out of the book of consumer software companies on the simplicity now the consumer companies could take a lesson out of the book from us and security and but when you put simplicity and security together you get magic when you could put together control and choice together you get magic so it's not the consumerization of IITs we all love it's the IT of consumers each other you could really flip that around like dead laptop staff I mean there's so many different place in the words that you could do that's exactly the way but I think that's a great point Sanjay thanks so much for coming to Cuba congratulations on a great keynote and thanks for coming to spend your valuable time with us here of the cube appreciate it we live here in San Francisco we write back with our next guest after the short break thanks John