live from Las Vegas it's the queue covering Dell technologies world 2019 brought to you by Dell technologies and it's ecosystem partners welcome back everyone to the cubes live coverage of Dell technologies world here in Sin City I'm your host Rebecca night along with my co-host Stu minimun we have Chadds a catch he is the SVP PKS and Deltek Alliance at pivotal thank you so much for coming back on the cube Rebekah it is my pleasure Stu as always this is a big anniversary actually this isn't he I'm glad you brought it up this is this is Mark's 10 years of the cube at Dell technologies world and you're a cube MVP I want to hear you break it down for us would listen down this milestone when when when you guys started doing this I'm not sure whether anyone knew whether there was gonna be a season two but you know I think at these events distilling down what's happening bring in people with diverse points of view you guys have always made it real shared the perspective of the ecosystem challenged us to keep it a no-spin zone which i think is a great formula yeah Chad thank you so much first of all you know one of the things we do come in opinionated but one of the things we want is we want guests with opinions and luckily you've always brought it we love having you on the program and boy have things changed a lot in the last 10 years so I want to get your view on the keynote so I mean Chad you and I go back way we we were colleagues back at EMC I remember when you were acquired into the company we worked on like I scuzzy stuff which nobody even talks anymore of my scuzzy storage networking the dark art of that stuff but VMware was something that you know it really was a lifter for both of our careers I think it was really interesting to see how central VMware is to the strategy that we saw how it fits into multi cloud I just got a note from Dave Volante said you know Pat Geller drew up on there talking about multi cloud and you know let's not think that Microsoft obviates the need for AWS Atos is the first the big cloud and absolutely VMware's working with them so I'd love to get your take on you know VMware and the multi cloud and VMware with delve as opposed to VMware with EMC there's a lot to unpack in that yeah we've got like an hour so the first thing that I think is interesting is that history and context gives perspective but ditch context and dick ditch history and if you think of the now and the market the customer no longer wants servers network storage they don't want virtualization they don't even want things like RDS and ec2 and we still want the emotion right you know the the reality is is that with every customer that I see they're looking for things that only the Giants in increasingly vertically integrated stacks can do so think about the whole keynote through that context right basically you saw Dell EMC and VMware more aligned than ever and again you and I have the history in the context of years of EMC VMware I remember the first time I did a vien the first time played with ESX 3.0 and virtual Center 100 and 200 and going is gonna change the universe but fast-forward to now people are like I want an easy button for the whole stack Dell EMC says this is the common building block VX rail my former baby is now grown up and it's the standardized way to deploy the VMware stack on Brentt Project I mention is moved out of a hypothetical into beta management of that lifecycle as a cloud service and you'll notice that Michael started it in the keynote kubernetes is central to that vision our efforts between pivotal and VMware in the kubernetes universe is singular the objective is to make that whole stack simple to deploy consume grow etc etc now Chad I needed a comment on one thing so I seem to remember back another project you worked on that was going to start as a managed server and that turned into Acadia which turned into VCE which turned into a product because the customer gave very clear feedback that most of them didn't want it so why is it is it different now what's different now what changed in a decade the customer wants the outcome in the historical like you know that's a Wayback Machine right so circa 2010 the way you built a private cloud was an assemblage of server network computes virtualization in separate components delivering that as an outcome as a managed service even for VCE CPS D etc etc there we did it amazingly for about 3,000 customers but it was held together with services and human that's not software what's adapted is that the software-defined data center is now much more mature and it's possible for us to literally roll in a rack of VX rails manage it via dimension do full lifecycle updates not via NRC em but via button click in a window that is necessary for that degree of simplification now if we had stopped there in the keynote we'd be missing the mark because basically the customers have said I want a common multi cloud hybrid cloud operating model with consistent control consistent infrastructure can consistent kubernetes consistent developer abstractions and I thought it was a pretty big deal to see Microsoft join what VMware's been doing with AWS and you know we were there at the Google announcement at Google next you know just a couple weeks back so I think that we're moving into a face to be a little opinionated here where customers wanting an outcome are going to look at Deltek Microsoft Amazon sometimes Google and go tell us how we bring ourselves to the digital future it's interesting because that means what things that people don't like which is vertically integrated stacks they don't like industry consolidation they don't like optionality being reduced but if you want an outcome frankly increasingly what's happening is consolidation at this layer and a blossoming ecosystem above it so so where where where will that bring us I mean I think I think you're absolutely right in you you started talking about how we're sort of putting aside history and perspective and now let's bring it back into the conversation yeah what does that mean I think I think that for human beings watching the era of doing cool things assembling things that run VMS even things that run kubernetes and containers is increasingly turning into an a realm where you have to let go so that you can do things that matter increasingly the ecosystems are hyper standardizing those stacks and delivering them as a service in a public cloud and on-premises our objective and I think it's something that only Deltek really is in a position to do is to do that in a way which is open multi-cloud and yet also deeply integrated and what I would say is again to anybody watching is if you're deep passion is in building cool things build cool things but on top of that stuff so chat great set up for the question I have kubernetes I've argued for a number of years is something that the average customer shouldn't need to worry about it's something that should be baked into the platform all the public clouds have it VMware has it your babies PKS today help help us reconcile the statement you were just making and what PKS because I know it's really cool tech and there's lots of pieces and lots of smart people work on it but so you know how does that fit so a stew again you and I go back aways do you remember you remember the state of virtualization circa 2006 sure you'd show up to the VM world and it would be filled with people deeply passionate at the time it was like three four thousand people we're gonna change the world with virtualization all of them were doing weird science projects very few of them could say and I'm running this in production to you know do bla and I'm making the hospital run better right but they'd be like look at how cool this is the technology matured a lot and if you look at the time frame 2010 which was vSphere for if my timing is right it was the first year where it was like kind of for reals right and people started to talk about hey I can do cool stuff kubernetes is currently in the 2006 of virtualization so I've been doing this now for a year we as del tech are now the number two contributor to kubernetes right after Google more than RedHat more than RedHat is that combining all the pieces we have basically drove and so hard towards this point because we think it's essential now you've got the help to your team as part of that that's a big that is a big part of the strategy right how do we make contributions for the native upstream community and lead that charge via be a good citizen of that ecosystem one two we will make PKS Enterprise PKS in a central PKS the best simplest curated way to make this work that said kubernetes has three major release over three months PKS 1.4 using one dot 13.5 came out last week 1.5 with beta support for Windows is just arriving and we did a beta last week three months from now there's gonna be another major release I'm doing a session that basically says and I'm the I'm a cheerleader I'm like a superfan this is currently like juggling flaming chainsaws right yeah it's it's like you were like what and I'm like yeah so the CNC F which is the ecosystem around kubernetes kubernetes on its own is just like a base component you need to have this and this and this and this has 647 things on the landscape landing page that means if you take five minutes per you would spend a week without sleep without eating like the Game of Thrones watching last night's no food no sleeping no bathroom breaks today Chad five minutes each today and you would get a chance to learn all of those but to really deeply understand what they do you can't do with that in five minutes that's six months of work people need that market to consolidate mature industrialize and we're doing it having having been part of the VX rail envy san ramp being part of the NSX ramp the vSphere ramp the converged infrastructure ramp what's happening with kubernetes and with peak s exceeds the ramp curves for all of those so if you're a customer and you're thinking about do I need this kubernetes thing the answer is yes we have 50 of the Fortune 500 customers now using peak s people are doing it for real but it's still early days now some people may go that's scary and I'm gonna take a timeout I wouldn't do that I would say that just like virtualization 2006 those people who were there at vmworld got a ton of value leveraged and learning and now it's like an industry standard we are going to make kubernetes part of the VMware software defined data center and you heard Pat and Michael talk about it so it sounds like it's going in the direction that you that you believe thumbs up thumbs up from Chad sockets you heard it here first thumbs up it's been it's been a really exciting year and this year we are gonna take that momentum and accelerate it to the moon and beyond but we can't wait to have you back at this table this time next year for Season eleven thank you so much for returning to the queue Rebecca thank you I'm Rebecca Knight first amendment we will have much more from the cubes live coverage of Dell technologies world here in Las Vegas coming up in just a little bit [Music]

>> Announcer: Live from Las Vegas, it's theCUBE. Covering Dell Technologies World, 2018. Brought to you by Dell EMC and its ecosystem partners. >> Welcome back to Vegas, everybody. We're rocking. We are rocking. Dave Vellante here with Keith Townsend. This is theCUBE, the leader, get into it! Live tech coverage. (laughing) >> We in the club! >> We are in the club. The Chads are here, Chad Dunn, Chad Sakac. Chad Dunn is VP of Product Management and Marketing at Dell EMC, and Chad Sakac, needs no introduction, although new role with Pivotal. >> Sakac: Yeah. >> Awesome. >> It's exciting man, it's great to be back, like come on, some things change, some things stay the same. It's always good to be on theCUBE. >> So tell us about the new role, let's start there. I know you've talked a lot about it, but you haven't with me, so. >> Yeah, so, in a nutshell, as I was trying to think what do I do next in my career? You know, we had built amazing things in the converged platform and solutions division, VxRail, massive success. >> Dunn: Yep. >> Those things moving into the parts of Dell EMC for more scale and velocity, which is simple. If you imagine the future of tomorrow, you'd go and say, what percentage of infrastructure going to be hyper-converged? Answer, a lot, and it's going to need to have a velocity that's very similar to a server, because what percentage of servers are going to be HCI? Answer, a lot. And so it was a very natural kind of, time to go and say, how do we optimize this thing? And then that gave me a weird, unique, once in a lifetime moment, where I could go and say, what do I want to do? My wife said, I'm telling you a long answer, and you probably want the short one. My wife said-- >> Dunn: You don't know any other kind. (laughing) >> This is Chad skills. >> "Chad, you've been on the road for 13 years, "your children are now 12 and 14, "they're going to be here in the nest "for like another four years, "take time off, I'll go out to work, "you be a stay-at-home dad." That was actually, like, option A. Option B was, there's so much cool stuff going on in the ecosystem, join a startup, do a CEO gig, whatever, and then stay in the family and a ton of support from Michael and from Jeff Clarke and from Pat Gelsinger and Rob Mee, and there was, like, do this at Dell EMC, do this at VMware, do this at Pivotal. And what I realized was the Pivotal thing gave me the opportunity to do the startup-like thing, discover some new parts of my own career, so move up the stack, and do one thing that I've always done, which is be at the intersection of the companies. Because PKS is, fundamentally, an effort that is 50/50, VMware and Pivotal, just like VxRail is a 50/50, VMware, Dell EMC effort. >> Right, right. >> So it was the obvious choice and then I had to have that uncomfortable discussion with my wife that said, "Unfortunately, sweetheart, "I'm back on the road." She said, "Fine! "But at least take one month off "before you go from one thing to the other." We went to Hawaii, surfed. >> Oh nice. >> It was awesome. >> You bring the kids? >> Oh, yeah. >> Beautiful. >> It was awesome. But in any case, it's a, you know, in the same way that when we started VxRail, we were like, how do we go from a market where we're currently not the leader, and quickly accelerate, become number one, in a two-year period? And that requires running fast and iterating. The same thing goes with PKS, PCF and PAS is number one for that universe, but we're not currently number one for the enterprise container distribution. So, that's OK, I like that, now I'm determined and stubborn to make sure that PKS is the best enterprise Kubernetes and container platform. >> Chad D, you were talking off camera about the interest in VxRail, sounds like it's off the charts. >> Absolutely. I mean a ridiculous number of customer meetings that we have here at the show this week. I think it's over 200 customer meetings, just on VxRail, and VxRack SDDC, you know, the VMware hyper-converged stack. And, you know, more and more on Pivotal PCF and PKS. >> Yeah so let's talk about that. You got the guys that are sort of, born Cloud-native and the guys that are trying to transform, they need infrastructure to help them do both, they need partnerships, so lay it out for us. >> So, Keith, you and I have gone on Twitter and talked about this, there's this nature amongst the IT ecosystem, where everybody wants the answer to be A or B. >> Keith: Yes, we do. >> Right, A or B. >> Keith: Yes. >> Yeah A sucks, B is awesome. And you know, debates raged about, you remember like, the era of Doka is going to destroy VMware, you remember that? >> I remember that, seems like just yesterday. >> Because it was just yesterday. (laughing) But what's happened now is everyone's realized that's stupid, that the reality is that Kernel-Mode VMs and containers are going to co-exist, and in fact, the majority of containers are actually going to be deployed on Kernel-Mode hypervisors. >> Netflix's biggest story is optimizations from AWS. They're able to save tons of money by running containers inside of VMs. >> Sakac: Yeah. >> Dunn: Absolutely. >> And, you know, I was laughed at a couple of years ago, when I said, you know what, containers and VMs go together, like peanut-butter and jelly, and it does. >> It does and so, look, does it change what people want from the Kernel-Mode virtualization layer? Yeah. So, things like DRS, that are really important if all you do is a Kernel-Mode VM is less important, when resource management is done by something like Kubernetes, but that's a refinement. And so, what we're trying to do now is now that everyone's gotten over the emotion, and what I call the bar-fights, where we're getting into stupid arguments, you know, that are not about something that matters, and now people are getting down to the brass tacks of, how do I make this go? They're realizing, I'm going to use off-prem and on-prem, I'm going to have Kernel Mode VM's and I'm going to have containers, how do I make that work, how do I build a hybrid model that will work for both of those scenarios? And then, frankly, our job as IT practitioners and the vendor ecosystem is to make this as easy as we can. >> Well, you guys know this better than I do, people want to use existing processes and procedures, they don't want to throw that stuff out, I mean I think of it, I remember Big Data and Hadoop that the killer application was sequel. Right, I mean even in the Blockchain world now. >> Sakac: Yep. >> Everybody's talking about writing in JavaScript, right, you've got expertise built up, you don't throw that away. >> No, and I think when you look at the people who are trying to deploy containers on premises, they don't want to worry about the infrastructure, right, they want to look at the new, play with the new, cool things, they want to play with Kubernetes, they want to play with containers as service. They don't want to talk about, OK, well what infrastructure do I need, how do I make those choices? They want something that is very much automated and very much scale-out so it can react the same way that their application does. >> So let's talk about that, let's talk about VxRail, Kubernetes, PKS. If I'm a Cloud-Native guy, I don't care about infrastructure but there has to be infrastructure. So where's the meeting of that conversation? Dell technologies run best on Dell technologies. >> So, again, I'm going to try and force myself to give short answers, because it's so not natural for me. I'm sorry, fellas. When Pivotal engages with the customer, we go and we say, "We give you a platform, PaaS, PKS "and the Function Service," and they say, "What should I run it on?" And the first answer that comes out of someone's mouth is it doesn't matter, you can run it on any cloud you want, which is true on one level. But then if you look at our on-premises projects, the thing that's the biggest holdup is infrastructure that is too rigid, too slow, doesn't work right, is busted. And they're like, damn it, if I want to focus my energies elsewhere, I have to have a base-stack that is just easy and done, right? >> So, help break up the long chat answers. One argument is, you know what, just give someone 128 gig VM, a bunch of vCPUs, and that simplifies the infrastructure. Where does that break? >> It breaks immediately when someone says, I need to add more total compute, or storage, or network, or memory, to my Kubernetes pot. Kubernetes goes, great, I'd like to basically make the cluster bigger, because I've got this resource demand. Then it looks down and says, infrastructure, are you there? And if the answer is, no, it's like, wah wah. Right? (laughing) So what we've managed to do is we've managed with VxRail to go and say, we've made an easy button based off of the customer-standard which is the VMware stack, it's not only something they can count on, they can easily add it, so if they want to add raw compute, storage, or network. It also adds in small increments, so you don't have to have a giant block of infrastructure to go in, you know, so you can grow your Kubernetes cluster, you can grow your physical infrastructure, simple, easy, done. And the biggest part is that Kubernetes makes deploying containers easy, however, PKS makes deploying and versioning Kubernetes easy, VxRail makes deploying and versioning the vSphere stack easy. Easy, plus easy, plus easy, equals easy. >> So is it like a quasi-elastic-beanstalk here? >> Elastic beanstalk, OK. (laughs) >> Is that fair? >> Or maybe a plastic beanstalk, where, you know, it could hold its shape. >> You know, elastic beanstalk is a PaaS, right, but the long and the short of it is is that if you get the abstraction that you need, Kernel Mode VM or container, the container is in a VM, if the whole stack is prescriptive and easy and works, then you can redeploy time, money, and resources, on the things that matter. And that Pivotal ready architecture, which is PCF, on VxRail, is that easy button on-prem. >> So, Chad, the production staff may regret me asking this question, but I have to know this. You're known in the industry for these blog polls talking about face-melting technologies. (laughing) What is face-melting about PKS, and VxRail, gimme some classic Chad. >> I'll give you face-melting. Facemelting to someone who's looking at a container platform and you're looking at Kubernetes is that without them knowing, without them knowing or doing anything, the Bosch part of what PKS does- >> Keith: Oh, Bosch. >> Is basically doing updates, like four times a day, blowing up the entire environment and recreating it and no-one has touched a damn thing, step one. The next thing that's face-melting is that their ability to update the infrastructure, can be done at tens of thousands of sites via API calls. So I'll give you another fascinating example. Kubernetes is generally thought-of as mostly a data-center thing, we've had fascinating interest from retail and other use cases, where they're like, look I get it, I want a Kubernetes, that I could deploy in a store. >> Keith: Yeah. >> And then you go and say, well, do you have a great DevOps practice in the store, in Topeka, Kansas? The answer is, no. But if I say I can basically drive all of the platform updates, including the infrastructure, at thousands of stores around the globe, that's pretty face-melting, no-one else can do that. >> Exactly, and look we see, you know, lots of pockets of Cloud Native popping up in accounts, and a lot of times IT doesn't even know where they're at. You know, these are things that are going to go from a line of business, and all of a sudden become production, have to become production, and IT needs a way to manage that. Rail gives them a way to go in and manage that infrastructure, at a scalable way, and move it from a line of business, into production. >> I'll give you another face-melting, do you mind? >> I'm not calling the shots. >> Bring it on. >> Is your face OK? >> My face is getting there. >> I want to see it like, melted Keith, just melted. People have asked me is that a good thing? And, yeah, it's a great thing. (laughing) So, we were talking about a particular customer, I dunno whether we can name them, can we name them? >> I don't know if we could, I haven't asked. >> OK so-- >> What industry? >> Financial Services. >> And, basically, they use the PCF stack on VxRail, and they're currently using it, for pre-prod. >> Exactly, so they're building all the testing applications to test their classic applications, that are running on VxBlock. >> So they've got a production environment that's like, big, classic, VxBlock, also my former baby, so and I love all my children equally, right. What they are finding is that the simplicity of the PCF on the VxRail Model, is so wonderful and fast and great. But when they want to try and do a capacity add on a VxBlock, or to do an update, like an RCM, it's a lot harder here than it is over here, right. I guarantee at that customer, what they're eventually going to discover is this has been awesome, we're going to keep using VxBlock for something else, but we're not going to deploy PCF, PaaS and PKS, on a VxBlock. >> Exactly, and this is going to trigger refactoring of all those workloads, that say, can I refactor these to be Cloud Native, right. If I can iterate my testing that quickly, can I iterate my production applications that quickly. >> And the ROI on that refactoring is? Fill in the blank. >> No, no it is like a thousand to one. So, again, this is a very hard thing to imagine. >> Talk about business impact. Not financial, but-- >> I'll give you one example that I'm so happy that they actually posted this to YouTube, because the customer's voice in this is incredible. If you YouTube, From zero to 12 million, T-mobile. OK, so this is not me saying it, you can go and you can see it themselves. T-mobile basically, and to all of you T-mobile, you know, subscribers out there, anyone of you guys use T-mobile? I use T-mobile, so, in any case, they have a single, giant, Java app that has a thousand functions in it, right. So, just imagine one app, sitting on a app server, like web-sphere or whatever, and inside that app, there's a thousand API calls, functions, and purposes, right. And because it's so big and monolithic, but this is critical, this is like the thing that runs their ordering systems and like, subscriber functions. It's the heart of the business that any time they needed to update it, to do like a patch, would take seven months. If they wanted to scale it, so like the iPhone launch is coming up, we need to get like three times as much capacity to handle all these iPhone orders in September, it would take them seven months of planning, work et cetera et cetera. >> Sure. >> Sakac: Everyone goes, I could visualize that. Right? >> Right. >> They took one function, just one, and pulled it out, and they said, we're going to do a project, we're going to take this function called, Get Usage, which, as you can imagine, basically pulls up the subscriber's usage data, and we're going to make it into a small micro-service, and we're going to run it on a PaaS, OK. Within five months, that function was getting used 12 million times a day, and they were able to do three CVE updates, so in other words, a Critical Vulnerability Patch, comes out, they were able to do it in real-time. They have eight platform operators, just eight, that are supporting 5,000 developers, sorry 500 developers. Eight, 500. Now, if you look at that and go, what does it mean for them? Well, they reduced the number of outages by almost 90%, the time for an outage went down by 63%, the developers and the dev-ops team are now happy, because this thing auto-scales itself. >> Dave: Ching ching. >> Ching ching, ching, right? >> Right, dudes, we got to go. Chad squared, thank you so much for coming on. >> Thank you, Guys. >> You OK? >> I'm good. >> Your face is melted. >> Your face melted? >> I have water. >> Splash it on your face to bring it back. >> Really, always great seeing you guys, thank you so much. >> Thanks, Dave, it's always good to be on here. >> Thanks very much. Keep right there, everybody, we'll be right back to wrap, right after this short break. (soft music)

>> Announcer: From Boston, Massachusetts, it's the Cube. Covering Cloud Foundry Summit 2018. Brought to you by The Cloud Foundry Foundation, >> Hi I'm Stu Miniman and this is the Cube's coverage of the Cloud Foundry Summit 2018 here in Boston, Massachusetts. Happy to welcome back one of our earliest and favorite guests of the Cube Chad Sakac Who's at Pivotal now and he handles PKS and Dell technologies. Chad, great to see you, thanks for joining us, welcome to the Boston area, you come through this area a lot but it's great to see you. >> It's good to see you too. This is, by the way, my first CF summit. So it's interesting, you and I have talked together at Dell Technologies World, Dell EMC World, and EMC World for years. >> Stu: VMWorld. >> And VMWorld. This is a different scene. >> Alright Chad, this is my third time doing this show. I was at the first one back in 2014, last year we did the Cube there; every year it's like 'oh wait, there's this cool new technology; containers, maybe, how's Pivotal going to deal with that? This year, wait, Kubernetes, cloud natives everywhere. Maybe give us your point of view, as to how this fits in. >> So I feel like I'm a kid in a candy store. My job inside Pivotal is to drive PKS. Pivotal Container Service, that's built on top of Kubernetes. And there's a lot of Kubernetes action occurring here. If I had to net it out, I'd say a couple things. Number one, we've moved past the early hype cycle, and actually went through several hype cycles that blew up, so Docker is going to take over the world, not correct. What turned out to be correct is Docker would become the container standard, right? >> It's Mobi now, right? >> Right. Then, we went in to the battles of different cluster container managers. It's Swarm, it's Mesos Marathon, it's Kubernetes and there were lots of others, and then you get through that early hype period and things settle down to the point where they're actually productive, and everyone now kind of agrees, that Kubernetes is the standard container cluster manager for broad sets of workloads, great. Now the debate is Cloud Foundry, the structured PaaS-World, right? The structured platform opinionated, versus the little more wild west and open eco system of Kubernetes, and then early stage Kubernetes projects, like Istio and others, right? I think this has two chapters now, in front of us. Number one, and this is my focus I think for the next few years, is how do we make Kubernetes simple enough, easy enough, and frankly, enterprise ready. Not that it's not ready today, but a lot of Kubernetes projects that our customers are all over the map, difficult to sustain. We want to bring a lot of the lessons learned over the years of Cloud Foundry to Kubernetes. And I'm happy to say, that just a couple days ago, we released PKS 1.O.2 and 1.1, which we haven't announced the date but we've always said that we're going to be in constant compatibility with GKE, and the core Kubernetes. Since GKE shortly will have Kubernetes 1.10 support you can expect a 1.1 of PKS. So mission number one is make Kubernetes a great platform, and I am determined and stubborn, and will make PKS the best enterprise platform for customers that are putting workloads on Kubernetes. That said, Kubernetes isn't steady still and neither is the ecosystem. And you can see that there's a lot of discussion over what is the intersection between Cloud Foundry and Kubernetes? I think that over time it's inevitable that these things come together more. But again, I think that's going to occur over years. Not in a heartbeat. >> And even, I've been at the Kubernetes show and have been at this show a few times, it's not a monolithic stack, we're building distributed, lots of different pieces. You go to the Cloud Foundry, I'm sorry, the show that's Kub-Con, there's so many different projects there, I mean Istio was all the buzz, talk about the service national, there's all these little pieces there. And at this show, we're talking about Zip Car came and talked about they love everything in this eco system. They don't use some of the core components, but they use all these other pieces. As you and I've talked many times, Chad, people go read, Chad writes a little bit about some of these things to give you all the details there, but this stuff's pretty complicated. There's some in the Kubernetes community that's like it's never going to get simple. Remember when we thought Cloud computing was simple? And if you've been to any Amazon show and you go through, it is more complicated to configure a compute instance at Amazon, than it is to buy a Dell server these days. Because there's more options out there. Look, customers need options, many of them want things to be packaged and serviced and buy it as a service, but some love to put those pieces together and it's a spectrum and I loved at this show, Google and Microsoft up on stage, talking, 'hey, open communities, collaborating together'. Maybe not merging everything, but working together, understanding where things fit and it's not one or the other, it's many customers will choose both. >> You and I are both nerds at heart, I hope you don't take offense to that. >> I've already been doing Star Wars quotes this week. >> I wear it with pride. I'm always fascinated by the technology itself, but one thing that's been really cool about my experience alongside, and now inside Pivotal, and you can see it here at the CF Summit, is that the Pivotal obsession, is about the customer and the outcome. We build a platform that is an essential part of that, but teaching the world how to build better software is a noble mission. And the thing that's the most exciting for me is actually when the customers talk. So if you went to any of the customer discussions, did you see any of them, did you see the T-Mobile one? >> I saw T-Mobile up on the key note, I actually did an interview with T-Mobile. Had an interview with US Air Force. >> The Air Force One is amazing. >> Awesome. >> It's fascinating, from a technological standpoint, to say how do you use these tools? But it's the story of what you do with it, that actually matters so much more. I'll leave the, no, I won't leave the customer name out of it. So in talking with the T-Mobile crew, they love the Pivotal application service. So they are using it, it's an essential part of how T-Mobile works. They talked about it on stage, that's why I don't mind talking about it. And if you ask them, it's not an or. They also have massive projects, massive application workloads, that don't fit in PaaS, but are Docker images, they're currently doing some strange stuff with Swarm, and blah blah. And they're like 'Man, if you guys can basically deliver a great platform that we can consume instead of trying to construct and maintain, we trust you, you iterate with us, you work with us, we'll be able to focus more on the outcome. The thing that I'm actually going to be the most curious to hear feedback from customers over the next couple of years, is how do they navigate what workloads are best put into Kubernetes, how does Kubernetes sets of ecosystems start to not calcify, but firm up, right? It's going to be loose. But it will start to align more over time. >> Yeah our research team actually calls it, we need to get to a place where it's plastic. It should be not just scalable up and down but side to side a little bit more too. Once you have it, you can be able to go. >> Figuring out over time, and helping, with customers, figure out 'Hey, this is a Kafka or Crunchy data.' Post grass instance, or it's an ISV stack, or it's an application they've home grown, but they don't want it fully compartmentalized and put on paths, and they decide that they want to put it on Kubernetes, awesome. What is the value and the return of doing further work on that app to really make it Cloud Native, pull out all config, turn it into sets of small micro services, and then it's better fit for the PaaS part of PCF. Figuring out that formula over the next few years is going to be really cool. >> You mentioned culture. And that's been something you and I, Chad, lived through. It was the server vs the storage vs the network and the virtualization admin, and then the cloud admin. I talked to the US Air Force guy, and he was like, 'We actually have the people take off their uniforms, because rank would have a certain meaning inside there.' But you've got the Devs, you've got OPS, you've got still the infrastructure pieces on tub, what are you seeing from the customers you're talking to; what are some of the big challenges that are slowing people back from reaching this Utopia of fast, fast, fast, agile, inter-operable, wonderful times? >> How do I answer that one? That's a loaded question, brother. The biggest impediment is human nature. It's these damn humans, if we could just get all the humans out. >> Well everybody's mine, mine, mine. >> We'll go to low code, no code, eliminate all the humans, it'll be dreamy. >> I did one of those interviews today, too. Absolutely, you don't need all programmers, the business people can do it. >> The human tendency for control, and the need for control, I think it's probably deep seated in our, we're living in a world where we know intellectually that we don't have control over everything, but we hate that. Because we want to create control in our lives, that basically is the thing that sets up boundaries between people, and they get really hung up on their function. That's not new, the word's changed, like you said. Used to be server people vs storage people. Then it was virtualization teams vs the silo teams. And now it's the intersection of the DEV team and the DevOps team, the operations team. How do they intersect? The places where they're the most successful, is that they don't get hung up on that and the people blend the roles. Now the trick is, how do you do that in a big company? I wrote a blog, I'm not trying to advertise, virtualgeek.io I wrote a blog on this which was a synthesis of all the customer dialogues I've been having over the last few years. And the pattern I've seen that is most successful, is actually to recognize that there are stacks, and the stacks, I don't mean this particular technology choice, but the way that the whole stack driven by the business and the application and then the abstraction it sits on, and then you have to build your actual operations team underneath that. That creates a whole operational model which in itself is a stack, and just so it doesn't sound like I'm describing something that's nonsensical, a stack can be in big enterprises, there's a main frame based app, that's running on a main frame, that's being supported by a main frame operations team, and then right beside it there's another stack, which is all X86 workloads that are static. So they don't need an IAS they just need to run on a kernel mode VM abstraction. And then under that you've got the team that supports. Then you've got the workload that can be containerized, and don't need a full blown PaaS. And then you've got another one, which is a full blown application service model. Each one of those stacks ends up with different people, processes and tools, because they're mapped to the cultural operational model of that stack. And the thing that I'm trying to guide customers when I'm talking to them is, don't reject that; that's actually reality. Yes you should move as much as you can to the highest order abstraction you can. That's goodness and it pays dividends all the way down the stack. But don't go and say, that this workload, by definition has to go there. Or because you operate this way in this stack and this group operates this way, that by definition you're stupid and they're smart. The other rule is that- >> Chad, the answer to everything is server-less. >> By the way, I should have said that's another abstraction even to the right of the application service model. So the thing I've found, is a key kind of pattern of good, is that between the stacks, people and process are not allowed to transverse them, because the process is linked to how you operate. The only thing that goes between them, because in the end, for any customer, the stuff that touches all of those, is to become religious about one thing, which is that API's and data, and how those transit, those different stacks, that you have to be very clear on. Do you know what I mean? On the blog I drew a picture, but it was terrible. It was a terrible drawing. >> I've done whiteboards with you, Chad, I understand. Great, so. Sound's like you've got your hands full. Lots of us read the S1, so Pivotal's marching towards an IPO. You've only been there a very short time, you've know Pivotal since the beginning and all the pieces since Greenplum's part of the MC, Cloud Foundry part of VMware. Anything that you've learned since you've been inside Pivotal now that there's misconceptions? One of the things I always find is, we always learn about something the first time and then don't think it changes. >> It's funny actually, that's an insightful question. Having joined the team, it's weird because to many of them, I'm new, I'm a new Pivot. But to many of them they know that I've always been there. And I was reminding some of the originals, the crazy tortured path that we've taken to get to today. The original effort was hey, people are doing new things data's at the core of it. And that was the trigger for the Greenplum acquisition. And several of the people who are the senior leaders of Pivotal now came in through that. And then Paul Maritz was the CEO of VMware at the time, hey, I'm seeing people build new apps in new ways, by the way there's this crazy team inside VMware working on this thing called Cloud Foundry. And they were like a red headed stepchild. That's not PC, but like a black sheep? Or I don't know what metaphor you want to use, but basically they were working on something that had nothing to do with kernel mode virtualization at its core. >> Yeah it was a Cloud native peg in a VM square. >> And at the time, VMware isn't what they are now too. And then people forget this but I wrote a blog about it, so it's on the internet permanently. There was a Greenplum project, which was a great idea, that says people want to collaborate with data sets, and data scientists want to work together and it's really hard. Let's build a thing, which is like a social media portal, for Greenplum which was called Chorus. And the Chorus project was completely sideways. And they were like we don't know how we're going to get this thing on track on time, and they asked around the Valley, and people said hey, you should go talk to these guys, Pivotal Labs, up in San Francisco. What they do is they help people when they're stuck. They went, and I remember when Bill Cook and Scott Yara came back to Hoppington and said 'This was awesome, they've changed the way we think about how we build software, we think we should buy them.' And that got added, I remember when Paul Maritz said 'Spring is available.' it's like the most widely used modern JAVA framework, and that was also stuff in Spring Rif. All of these weird bits, in essence became the essence of Pivotal. You know what I've learned through that? Is these journeys are not in a straight line. Everyone's. >> Like our careers, Chad. >> Like our careers man. That's the first part, the second thing is, and this is going to be a challenge for Pivotal, honest, if we're very transparent as always, is Pivotal's brand is now so linked with Pivotal Cloud Foundry. And that's a good thing, like those customers raving about the business outcomes that they are getting. But inside Pivotal, the strategic change, the strategic pivot ha ha ha, to do a full embrace of Kubernetes versus the traditional opinionated versus plastic debates, I wouldn't say that we have 100% of the company fully embracing it yet, because companies are themselves, organic. But across the vast majority of the company it is something understood that it is an imperative for us. If we want to help the customers and the world build better software, we've got to do it for stuff that fits into PaaS, and stuff that doesn't. And so I've learned over the last few weeks about how many people share that passion that I have, and I think we can make something awesome with PKS. >> Alright, well with that Chad, we'll have to leave it there for now, looking forward to seeing you at more events. Congrats on the new role, I'm sure if people haven't already, Chad does have a new site for his blog, virtualgeek.io instead of the previous one. Chad, always a pleasure. Got the Cube here at Cloud Foundry Summit, I'm Stu Miniman, thanks for watching the Cube. (upbeat tempo)

(exciting upbeat music) >> Announcer: Live from Las Vegas. It's theCUBE. Covering VMworld 2017, brought to you by VMware, and its ecosystem partner. >> Okay, we're back in Las Vegas. This is VMworld 2017, and this is theCUBE. This is Dave Vellante with Peter Burris, and this is the second segment with Chad Sakac who's the president of Dell EMC. We're going to dig into what the cloud looks like in the next decade, you know, 2022 time frame. Chad, again, welcome back. Thanks for spending some time. >> It's great to be back. No one's got a crystal ball a decade out, but I think we've got a pretty good idea of what we think the next five years look like. >> Well, you know, we do like at Wikibon to look further out, and say okay, what are your assumptions about how the business is going to evolve, knowing that any kind of ten year forecast is going to be wrong. But it does shape your thinking and your assumptions. >> Yep. >> So what's your vision? What's Dell EMC's vision for how the cloud is going to evolve and shape, and look like in the next five years? >> I think the following things are a near certainty and they're driving our strategy. Basically customers will consume platforms. They will pick the best platform on a temporal basis and on a space basis. So time and space (chuckles) right? So I'll give you an example. Today if you said, "What is the best place and time "to do AI and machine learning "for work that is against data that is not in-house?" The answer would be Google cloud platform in a heartbeat. Their core capabilities as a platform around AI and machine learning are head and shoulders above everything else. Right? >> Yep. >> That's a platform that people consume. Likewise, if you said, "Okay, what's the platform that I use for my "applications that basically need a little more "traditional care and feeding around them?" That's going to be an evolution of the VMware stack that the customers are using today. It powers 80% of what they do today. It's the platform that runs the core of their business today, and that platform, as you can see this week, is expanding and expanding and expanding. Now what'll happen over the next decade is that platform will be independent of place. So if you imagine what we're going to do with that capability now, it's not an announcement, it's a platform that customers can buy around VMware cloud on AWS, you can see that we just broke the "Is something on or off?" is now not the question. The question is what's the right platform and services to use for a given set of workloads? >> I want to build on that for a second Chad, if I can. So the vision that I think you articulated the core experience is Look that what you love about the cloud is you love the get in small, grow fast, or grow according to the workload needs, >> Chad: Yep, elasticity. >> Yeah, don't lock in a whole bunch of financial assets. Lower assets, specificity, be able to apply it to a lot of different things. You love that. But the problem is, the physical, legal, and IP realities of your business dictate that you're not going to put it all in there. So the common experience is, get that dependent upon the workload, and have it all run simply in a straightforward manner that serves the business. Right? >> Bingo. So the word platform is independent of space. >> Right? >> Right. The other thing that I think we'll see over the next decade is that any technologies that bind multiple platforms together are incredibly compelling. And you can actually see this driving both the R and D strategy and the M and A strategy of the leaders, right? So let me give you an example of things that bind together platforms, and themselves are platforms. Cloud Foundry is one of the best binders and spanners that exists. Because people use Cloud Foundry on Azure, on AWS, on their own private cloud all day long. In fact, it won the award for basically, at Microsoft Ignite, for the most popular used thing on Azure outside Microsoft's own core services. So it's a binder. It gives customers mobility and flexibility across these different platforms. Another example, we're going all in on Kubernetes. We think that Kubernetes as the container abstraction that spans these different clouds is in essence, game over of chaos, and game beginning of standardization and movement forward. I'll give you another example. I think that ten years from now the debates that we're having around SDN today will be so over, and everyone will go, "Of course you're going to have a software-defined "network that abstracts," because networking is something that needs to span platforms. So, core idea number one, people will make platform choices and there will be multiple platforms. Those platforms will be independent of on off prem, independent of Capex, Opex choices. Those platforms will exist in all of those modes. >> But be tied to the characteristics, the benefits that they provide to workloads. >> Bingo. The library of connectors, of things that span and bind these platforms, will grow in value and importance to the customers. I'll give you another example of a binding thing that links together multiple platforms. And you can see its success even today. ServiceNow is the thing that binds and connects at the ITSM layer, all of these different topologies. So it's not just things that are all just in our family (chuckles) right? But you can see these ideas continuing to march forward. The thing that I think you'll also see is the explosion of the edge is going to create this whole world that is the opposite pendulum swing of centralization that you can kind of already see happening. The number of edge devices that will exist, the amount of data that they're going to need to process locally, and the amount of data that they're going to need to process that's centralized in one of these platforms is going to be immense. >> So the edge, does the edge create a new cloud? >> Yes. You know, people are already talking about that like it's the fog or whatever. Again, buzz words can sometimes make people underestimate very important things that are actually happening in an industry right now. The last thing I'll say is, and this is a dream and an aspiration, and a vision, but a dream and an aspiration. There are amazing problems to crack in the domain of security. And that itself needs to become a core platform element that transits all of these other platforms. >> Peter: That's a key binder. >> It's a binding element that has to transit all these different platforms that people consume. And I think you can see the edges of the industry, us tackling these problems in new ways, and I'm very hopeful about that actually. >> So the infrastructure requirements of that new cloud, customers have to make bets. We were talking about that earlier. There's new stack choices that are emerging. What's your point of view there and how does it all relate to bring it back to how you get from point A to point B? >> There's a great risk in saying stuff on camera Dave. (men chuckle) But you know-- >> Peter: But take the risk Chad. >> But to hell with it (laughs). See it here on theCUBE first. >> So look, I think that we're entering into an era of stack wars. And that sounds too militaristic. That's not what I mean. >> Peter: Let's call it stack competition. >> I think that what is happening is that the need for customers to choose platforms and make platform level bets in exchange for simplification and speed is basically forcing them, and it's forcing the market and everyone in it, including us, to think, what is our opinionated stack? That doesn't mean closed, right? However, even though there's open connections all over the place, increasingly you're seeing people take the Lego components and go (makes building sounds) This works with this, which works with this, which works with this, and they're built all together. And the thing that I'm finding, and I don't know whether you guys see this in your customer conversation. It's weird, people are schizophrenic. They're really worried about what that means for them on premises. Because they're used to hand-assembling everything under the sun, and then are frustrated it doesn't all work together easily, right? And yet, they have no issue at all about saying "I'm putting everything in, you know, "in Office 365." I was talking with a customer, with the procurement person, and you can imagine the procurement person's reaction when I say, "I think that the world is moving "towards vertically integrated stacks." And there is decidedly an open ecosystem, but also an opinionated, pivotal, VMware, Dell, EMC stack. A Dell technology stack. The procurement guy lost his mind. He did not like to hear that from me. >> Of course. >> He started to get angry. >> Well, would you rather have what occurred with the Dupe? >> Yeah, and-- (Dave laughs) >> Well, what he wants is he is being told, "You got to take "five points off of every transaction." >> Yeah, of course. >> And he wants to see all these transactions be distinct, and what you're saying, Chad, is that we're moving where the transactions start to accrete value, accrete strategic importance, >> Yep. >> and accrete risk. And the procurement guy's looking at that saying (makes terrified sound) But it requires hard core, realistic vendor management that's well-defined and treated by the business as an asset. >> I think that we're entering into an era of consolidation. Customers are going to have to make platform bets that are business bets. >> For themselves. >> That's right. >> So bring it back to a topic that is more 2017, hyperconverged infrastructure. >> Chad: Yep. >> Is that the model for the future cloud? Or does it need to go beyond that? Beyond the virtual machine parlance that we tend to talk about? >> So, we have years of experience working with customers, trying to build clouds out of traditional infrastructure stacks. >> Dave: Right. >> And we're there as their partner to make it work. It is freaking hard! Frankly, nearly impossible. And again, they talk to vendor after vendor who's like, "Buy our new cloud management platform "and we'll be able to automate all of your crapola." >> Buy our hammer, and we'll fix all your cloud nails. >> And the reality of it is that every layer that you build one of these stacks on, the more variation that you have at this layer, it complicates the life cycle management of this layer. And then the more variation you have at this layer, the more it complicates the life cycle management of this layer. And that's what I mean about the stackification where the stacks are starting to bowl together. Driven not by vendor, but driven by customer need for simplification and speed. >> Peter: And workload. >> They're just not consciously making the connection yet that says it's time for me to make strategic choices. Right? So hyperconverge infrastructure has proven an ability. It's no longer in weirdo VDI only use cases (laughs). It is now proving itself to be a material simplification at the bottom layer of the stack. And it's not rocket science. It is basically the same lesson that hyperscalers and SASS startups realized, which is that you need to have something which is much more industry standard, much more software defined, much more rigid in a sense about how it's constructed so you actually life cycle it and make the next stack up simpler. >> All right, so we got to wrap. Let me summarize what I heard, and maybe you guys can fill in any gaps. So platforms essentially be products is what I heard. Those are my words not yours. >> Totally, yeah. >> And platforms will be place-independent, and a key value creator will be this binding platforms together. >> Chad: Yes. >> Which is going to become very very compelling. You gave the example of Cloud Foundry, Kubo, Kubernetes. >> I'll give you one more, Boomi. >> Boomi, and even SDN which is basically a fait de complis >> Yeah. >> is essentially what you're saying. An explosion at the edge will create a new cloud. The infrastructure requirements are going to evolve to support that cloud. And security is going to be a core platform element, a key binder as you said. Anything I missed? >> And that literally, customers have to be as simple as they can. And what they need to accept, and make choices, I'm not forcing them down the path with us or whomever. They need to accept that simplicity and speed means choosing platforms and platform partners. >> So here's what I'd add. 'Cause I think you're right Chad. I would add just a couple of refinements, that the quality of the platform is going to be a function of how well it binds. >> Chad: Yep. >> And that that security becomes a crucial binder. And the other thing that I'd say is that the edge, it's not so much a new cloud. I hate the term fog. >> Yeah. >> Because if there's anywhere where business is going to need clarity, it's going to be at the edge. >> I totally agree. >> That's a vendor way of looking at things. The customer way is, "I need clarity here you guys. "Don't talk to me about cloud." In fact, we like to say that when Andreessen said, "Software's going to eat the world," the right way of saying it, "Software's going to eat the edge." >> Right. >> That the edge is going to make a lot more of these choices clear. >> And just, again, I know we got to go but, It always sounds like hyperbole. The amount of stuff that we're doing around trying to make the edge clear, like basically the EdgeX Foundry, which is basically trying to standardize this mess of proprietary protocols and devices. That stuff is happening like now. The Pulse IoT stuff that we talked about, that's happening now. But those are just in early, early days. If you look out over a few years, that stuff will be a new platform. >> That's absolutely right. >> Yeah. And Dell hasn't fully played it's edge card, I suspect. >> We will see more there. >> Yeah. >> All right, Chad, first of all, awesome content. Peter, thank you very much. Virtual Geek is Chad's blog. If you're into this stuff, go subscribe to that. It's a fantastic resource. >> Thanks man. >> So thanks again. Really appreciate it. >> My pleasure guys. >> All right, keep right there everybody. We'll be back with our next guest. This is theCUBE. We're live from VMworld 2017 from Las Vegas. We'll be right back. (electronic music)

>> Announcer: Live from Las Vegas, it's theCUBE, covering VMworld 2017. Brought to you by VMware and its ecosystem partners. (electronic music) >> Chad: Thank you. >> Welcome back to VMworld 2017 here in Las Vegas. I'm Dave Vellante with my co-host Peter Burris. This is Day 2. Chad Sakac is here. He's the president of Dell EMC, long-time CUBE guest, CUBE alumn. Chad, we were talking about eight years >> Yeah, it's crazy, man, it's been great. >> Dave: And you were one of the first. >> It's been great. I was thinking about it. What I love is it's always a great events where there's great things happening. And you guys ask killer, right to the point questions, and I always try to give killer, right to the point answers. >> Dave: All right, well let's get into it. Your ascendancy, personally, kind of coincided with VMware's explosion. You are down and dirty with the customers. So, first of all, congratulations on-- >> Thanks, dude. >> Dave: that role and being the president at Dell EMC. Awesome. >> I have a passion for it, Dave. Passion is the key, right? >> Okay, so we're all talking about cloud, right? Cloud first is something that you hear from customers all the time. I want to be cloud first. What does that mean to you, to Dell EMC, VMware? >> I think the first thing is is that to all of us, cloud is much more about an operating model than a place. And people have started to internalize that it's about changing the way that they operate their business, both for some of their traditional apps, as well as how they build cloud-native apps. That's the first thing. Operating model, not place. The second thing is, I think I'm seeing the customers in the market get a little more, I don't how to say this without sounding pejorative, but a little more mature in their view that the answer is going to have to be a hybrid model based on data and data gravity, based on elasticity of workloads, based on governance factors, that lead to hybrid being the answer. And if you think about what we've seen just in the last two days, VMware on AWS, Google partnering with VMware and Pivotal around Pivotal Container Services. Those are all about hybridizing both traditional IT and how people build new cloud applications. So operating model, not place. Hybrid is the answer. And the third thing is that it's multi. I still occasionally encounter somebody that says, "It's all going to be one cloud." And I'm like, "Okay, just out of curiosity, "does your definition of cloud include SalesForce.com?" "Well, yeah." "Does it include Office 365?" "Well, yeah." "Does it include AWS?" "Well, yeah." "Does it include your own private cloud?" "Well, yeah." "So, what are you talking about?" >> Peter: Where's the one? (laughs) >> Where's the one, right? And I think that there's a... Things start to matter once they move out of hyperbole and into pragmatism. >> Well, and when you paid attention, let's say four or five years ago, when you listened to Andy Jassy speak, the notion of hybrid cloud, or hybrid IT, or private cloud was not in his lexicon. And then yesterday, we saw him up on stage with Pat Gelsinger. They were talking about hybrid and private cloud. >> Chad: Well, by the way, I don't want to throw the dart at Andy. I think if you talked to Vmware or Dell EMC four or five years ago, public cloud wasn't in our-- >> Dave: Absolutely. >> (laughs) in our vernacular either. >> Dave: Absolutely, so those worlds have come together with the customer reality that says, "Well there isn't just one cloud. "And I can't just bring my business, "reform my business for the cloud." So what do you make of the fact that we've evolved as an industry and as a vendor community? >> I think it's time to get on to the brass tacks of solving the problems for the customers, ma'am. And I see actually that happening in the industry more and more. People are solving problems that they can't solve in their private clouds using public clouds. They're figuring out that the best place to put a dollar is to rebuild their applications using cloud-native principles. But they're also realizing that sometimes that it's not even a legitimate choice or option. And they're trying to figure out also, at the same time, "How do I support some of those "more traditional application stacks "and make them more automated and cloud-like, "even if they're not going to be cloud-native maybe ever." >> Peter: Let me jump in here for a minute. >> Dave: So this gets to the promise that you've got to make. And please jump in. >> Yeah, because in many respects, what we're really saying, let me test this with you, Pat, is that, ultimately, it may be one cloud, but that one cloud is going to be defined by the business and not by a particular vendor. >> Chad: It's a higher-order function. >> Peter: That's right. So what we like to say is we like to say, "You're not going to take your business to the cloud. "You're going to bring the cloud to your business." And your business attributes and your business characteristics, where you operate, how you operate, how you use data, who your customers are, how are you going to reach them, all those different things, the physical realities, the legal realities, the IP realities, all that's going to shape the architectural choices that you make regarding cloud. And you have to have a strategy for that becoming consistent and coherent for your business. So a lot of piece parts, but it becomes your cloud. Does that make sense to you? >> It makes sense to me. It means that it's an answer that involves a little more sophistication and nuance for the customer, because they've got to think about what it means for them. And the answer is not the same for every single customer. However, there are common base elements in that formula. Number one, digital transformation always starts with applications that are written using cloud-native principles, often using data fabrics that are modern distributed data fabrics. That's one piece. There's a consistent piece that says, "I'm going to leverage public and private cloud models." And the definition of which workload goes to one or another, like you said, is very much driven by data gravity. Compute tends to co-locate with the data against which it's computing. Governance rules, which is not security. Public and private clouds are equivalent. In some cases, one or the other is more secure than the other. But those are common elements. There's one other common element that I've learned over the last four years of being on the journey myself with many of our customers, which is that the only way that the on-premises part of cloud stacks work is through radical simplification and deploying their on-premises infrastructure using design and automation principles that look a lot more like the public cloud than they look like their most traditional IT. >> No, you're absolutely right. And I think that's a crucial point, that ultimately the physics of all this. >> Chad: Mm-hmm. >> And I agree, cloud is not a We like to say the cloud is not a place, it's a time. >> Chad: Yeah. >> Because at the end of the day, all this is defined by the realities of your data. >> Chad: Yep. >> And if your data can't If you don't have time to move the data or it's too expensive to move the data, that's going to dictate where the process actually runs. And I like the way you've redefined, I'll say redefined data gravity. Most people think data gravity, "Oh, once you put data in place, "it's going to accrete more gravity." And you're saying, "No, that's not the way to think about it. "It's going to accrete more function." >> Chad: Right. >> 100% agreement. And I don't think a lot of people are talking about things that way. >> By the way, the linkage to physics, I don't know how many of the viewers basically were physics majors, but it's actually related to quantum physics and mechanics. Information inherently can't simultaneously be in two places at once. That's a law of physics, right? >> Data, okay, keep going, keep going. >> If any bit, any information, basically, is connected between two points at the speed of light, that's not a function of vendor technology until someone-- >> Well, let me we get into quantum entanglement, nano >> Yeah. >> But I think where you are, where you're absolutely correct is that ultimately, that there is a cost to moving data. >> Chad: Bingo. Bingo >> And we have to start When we think about digital transformation, our approach is the difference between a digital business and a business is a digital business treats data as an asset and builds strategic capabilities to treat data as an asset and apply data as an asset. And one of the beauties of what you were saying earlier with simplification, is for example, the idea that if I build around data, >> Chad: Yup. >> then I can use hyper-converged, I can use converged, I can use Flash, I can use VC, and I can use all these different things to treat my data differently. >> And do it as simple as possible. The thing that I think I'll give you an example from this morning. I was meeting with a customer that's in the finance and insurance vertical, right? And they're pretty advanced down there, use of both public and private clouds. They've got a software-defined data center. And they're trying to basically redefine how they're using mobile apps and customer intelligence. They provide a ton of services. They're a great, great customer and a partner. But again, to highlight that cloud is a place, or a time, to use your vernacular, as they build their mobile app, sets of assets are running in a public cloud, the data was born in the public cloud, the compute is running in the public cloud, it's built around a cloud-native app principle using PCF and Kubernetes. Great! When that person is using that application, there's a moment when they go in and do a transaction where literally it's hitting a mainframe running DB2 in their core data center. >> And there's nothing wrong with that. >> And there's nothing wrong with that. In fact, that pattern is universal, right? And so it highlights basically that you've got to be a little practical about how you do this stuff. >> Okay, so in the limited time we have remaining, give us the the quick why Dell EMC, Dell EMC, VMware, why you guys Maybe talk a little bit about the portfolio. >> So if you look at this week, the one thing that jumps out, at least to me, I'm probably a little close to it, Dave, but I hope it jumps out to the viewers, right, is while we maintain an open ecosystem, Dell EMC has its open ecosystem, VMware has its ecosystem, Pivotal has its ecosystem, we're becoming much more opinionated, right? And that matters because customers want clarity. So I'll give you clarity. Clarity that jumped out on stage and it came out of the mouth of Pat, not me, was the easiest way to deploy VSAN is on VxRail. The easiest way to deploy VMware Cloud Foundation is on VxRack SDDC. Period, full stop. Now, why are we saying that so emphatically? It's because if you don't have a good foundation for an SDS and SDC, or SDC, SDS, and SDN, so software-defined network and compute and storage, in the case of VMware Cloud Foundation and VxRack SDDC, then your whole underpinning is just way too complex, right? So there's a very clear opinionated point of view that says hyper-converged infrastructure that's being built by the combined team is the way forward for customers who have standardized on vSphere. >> Well, and you nailed it earlier. If you're going to bring the cloud model to on-prem, to the data, it's got to be simple. >> Chad: Mm-hmm. >> Peter: That's the cloud model. >> That is the cloud model, right? And and without it, you can't fulfill that promise. With it, you can. >> I'll give you a second example. For the last four years, we've been supporting our customers with the Enterprise Hybrid Cloud. We've learned more about what does it take to lifecycle, manage, and deploy vRealize Suite on top of HCI, where we own the lifecycle, right? At the same time, VMware has been learning about, "What does it take to take vRealize and run it "in the VMware cloud on AWS, not as software, "but as a service?" And that's all about simplification and lifecycle management. What we're doing between VMware and Dell EMC is taking that knowledge and saying, "HCI is the foundation, and on top of that, "here's how you build your IaaS "for your traditional applications, "and the foundation for what's coming next." And then the last part that we saw today loud and clear is a strongly opinionated point of view that says PCF, Pivotal Cloud Foundry, is the best structured PaaS in the market, and a full embrace of Kubernetes, Pivotal Kubernetes Services, Pivotal Container Services using Kubernetes, is going to be the best way to build container as a service. How do you deploy it best? On vRealize. How do you deploy it best? On top of VxRack SDDC. It's pretty clear. >> Covered all the bases, we could go all day with you, but we're out of time. >> Yeah. >> Chad, thanks very much for coming on theCUBE yet again. Really appreciate it. >> It's my pleasure, guys, thank you. >> All right, keep it right there, everybody. We'll be back with our next guest right after this short break. This is theCUBE. (electronic music)

>> Announcer: Live from Washington, DC, it's the Cube covering .NEXT Conference, brought to you by Nutanix. >> Welcome back to NEXTConf everybody. This is the Cube, the leader in live tech coverage. My name is Dave Vellante and I'm with Stu Miniman. This is the president's segment. Sudheesh Nair is back. Good to see you again, Sudheesh, the president of Nutanix. And Captain Canada himself, Chad Sakac. >> Dave. >> Cube alum, good friend. >> Dave, it's good to see you. >> Good to see you again. Stu. Hey everybody, most important thing, great, you know, .NEXTConf, but look, Canada Day, July 1st, is right around the corner. So remember, everybody, go have some poutine, drink some beers and celebrate. Then there's this July 4th thing that is apparently right around that. >> Yeah, well, it's important to us, 'cause we've ended an eight-week sprint of the Cube, so. >> Isn't Chad wearing red, white and blue? I think he's, uh ... >> I actually did that on purpose. You noticed! >> Here in DC, nice job. >> I figured when in DC, you know, celebrate Americana. >> Why not? Well, there's a lot of celebration going on here. You guys have been celebrating several years now. What is it? Two and a half years of ... >> With Dell, yes. With Chad it's relatively new, so ... (all laughing) >> It's actually been about three years, and it's been a ridiculously successful partnership. You know, I think ... >> I would say face-meltingly successful, but ... >> Yeah, you know what? I agree. >> Okay, so coming into this role, did you have misconceptions about Nutanix, or was that just marketing, when you were kind of ... >> No. Nutanix basically created the HCI category. They've been at it now for seven and change years. You know, great technology, very happy customers. I'd say out of the 6,200 or so Nutanix customers, roughly around 2,500, 2,700 are XC customers, so I've gotten to know them really well. They tell me pretty clearly what they like about Nutanix and what they like about XC. >> All right, so Chad, I'm looking at my notes here, and there was a guy Chad Sakac who said, "Niche corner case for VDI only," you know, that was Nutanix. >> Love it. >> You know, you're singing a little bit of a different story than we might've heard a couple of years ago. >> You know, I would say that it's important to acknowledge when you're wrong, Stu. You know, and I think that HCI in general has moved absolutely out of any corner case segment whatsoever. I met with a customer this morning that is basically a hospital that is running the bulk of all of their mission-critical customer healthcare records, packs, all on XC. And again, you know, I don't want to get us in trouble here at the .NEXT Conference, but we have an HCI portfolio, we see customers deploying HCI for every workload under the sun at this point. And frankly, I've said it publicly now, firmly and as clearly as I can, SDS and HCI models are ready for the majority of x86 workloads. That's not just my opinion, it's the company, it's Dell Technologies' point of view overall. >> You know, Joe Tucci was the master of sort of building an ecosystem with quasi-competitors, coop-etition, whatever you want to call it, and certainly the Dell/EMC relationship of many years ago was epic, one of the, probably the most successful storage relationship ever. So and, Sudheesh, you get a lot of concerns of Wall Street, when's this going to end? You guys used to get that all the time with Cisco and VC, and yet you continue to ... >> Still do. >> Yup. >> Chad: Still do. >> Valid questions, you know, it's the obvious place for analysts, snarky analysts to go. But in retrospect ... >> Chad: Is there such a thing as a non-snarky analyst? >> There're a couple, there're a couple out there. >> They're sitting here, right here. (Chad laughs) >> It is, getting paid ... >> After the comments that I've already gotten! >> It's getting paid to be snarky. >> That's what's fantastic, by the way. That's what's like watching Charlie Rose and Bill Clinton. Hard but smooth. >> So, if I go back into history, though ... I wish Michael were here, and I'll ask Michael, I know you watch, I'll you next time I see you. I wonder if he had to do it all over again, if he knew then what he knew now, if he would've just said, "You know what? "I'm going to do better just staying with the EMC partnership, "instead of going out and buying Equallogic or Compellent, "and we would've done better for customers, "might've made more money." I wonder if you've learned anything from that experience. I mean, you were biased, 'cause you were on the EMC side of that, obviously you didn't want to see Dell end that relationship, but are there similarities here? >> You know, I think that there's similarities, but there's a notable difference. When the Dell/EMC merger occurred, and the first time I came out to visit headquarters, I mean, lots of discussions with Sudheesh and with Dheeraj. There's a core thing here that's important to understand. The market is not in a zero-sum game. So if, if there's 6,200 Nutanix customers, 2,500 XC customers, roughly 3,000 VX Real customers, roughly 8,000 VSAN customers, you know how many VNX customers there are? 300,000. Do you know how many power-edge servers there are out there? 27 million. We're on the earliest days of the software-defined and HCI journey, and frankly, that's just the first step towards building hybrid clouds on-prem and off-prem that bridge one another, which has been a big part of the announcements from this week. >> Yeah, look, I think the first part of the question you asked, you got to be honest that, you know, when you flip sometimes TV channels, let's say you come across National Geographic, right? And then there's a cheetah chasing a deer. You stop, you want to watch. You know what's going to happen, the cheetah's going to eat the deer, one way or other, that's going to happen. You know it, but you want to watch it. The way we think of our industry, status quo is the cheetah. The deer is all of us, the moment you stop innovating. That is particularly true for companies like ours, young companies. The partnership that we have is not built on anything but the fact that we are adding more value for customers than what we would individually do. That's it. The sum of the parts of this should be higher than the individual parts, right? So what we have learned, for example, last quarter, you're absolutely right, financial analysts, they'll always ask us about the Dell EMC overhang. Last quarter, for example, we for the first time publicly talked about the fact that Dell EMC business was around eight to nine percent of our overall revenue. And it is not because that didn't grow. It is growing, but the overall business we are able to keep growing. Our destiny's in our hands, and it comes down to couple of things6: our ability to really accelerate innovation, because as a younger company, more agile, we are expected to do more, and you saw this morning. Number two, make sure that we are playing fair. There are rules of engagement that we are, because we know that they have tremendous amount of portfolio, and some of them will overlap, and that's okay. But you have to clearly define the rules of engagements, and be very fair in how we treat the partner. And if you do those two things right, we know that this is a relationship that'll last long time. >> And just a quick little add, I mean, the things that we bring is extending the platform's scale and reach. There's no question that you're a younger company, there's no question that we're a larger company. The number of customers that say, "We want the better together thing," and we give them that choice, it's very important for us to do that, but also add value. So whether it's integrating data protection, whether it's what we've done around running Cloud Foundry on top of XC. Home Depot talked about it. >> Classic example, yeah. >> It's a great example, where they want this, that, all together. Now I can't emphasize enough that what we've been trying to emphasize is be transparent, be consistent about those rules of engagement, and telling our customers, you know, driving that choice and giving them that benefit is something that we have to sustain. >> And it's also important to understand that you know, if you spent this morning watching the keynote, you clearly saw that we did not talk about hyperconverged. What we talked about were two things. One is pushing that cloud intelligence to the edge, and then building a hyper-cloud experience that is totally transparent. And the second thing was about building a multi-cloud environment through Calm. We did not talk about hyperconverged. Those things are not built on a platform that is not built for ... Those things are built on a platform that is ready for web-scale architecture. So the foundation that we have built in the last seven years is on which we are building, and as long as we continue to add value like that, and partner, for example, on PCF, you know, Pivotal Cloud Foundry, that's a classic example, a Home Depot example, right? They need that same experience that they're getting from Edibus. And Edibus is not just doing IAAS. They're doing PAAS, they're doing the entire thing. To do that, there is no shame in figuring out what we do well, what we don't do well, understand their strengths and weakness, come together, and deliver something that is better for customers. >> Sudheesh, I'm curious, actually, 'cause Home Depot is a, you know, lighthouse account for Pivotal, on Google Cloud platform. Talking to them about it for the last six months. How does that fit in? We know that the Dell family is a multi-function, so I'm curious to want to hear the Nutanix piece of how that fits in. >> Look, I think the Google thing is a relatively new thing for us. We are expecting two different areas that we are going to partner with them. >> No, no, but Home Depot specifically, is that related? >> No. >> Because they're a big GCP customer, so maybe Chad needs to fill it in. >> This specific project is all on Exceed with PCS. >> The thing that I think is fascinating, and to watchers, I would say, for the intellectually curious that are willing to double-click and go a little bit further, it's a little more of a complex, nuanced story, but everyone's looking for a soundbite, whether it's in politics, as we're here in DC, or whether it's in news, or whatever. Home Depot, like a ton of customers, is using GCP. They're using XC, they're using vSphere, they're using NSX, they're using PCF. It's not like there's some singular thing. Another fascinating example is, I talked to a customer who's a fantastic ScaleIO, VxRack FLEX customer, vSphere, enormous scale and scope, and when I asked them, they want a hybrid cloud to this point. HCI is just a foundation for hybrid cloud use. When I asked them, like, what are their hybrid cloud targets, they're like, "AWS, but we use GCP because we depend on TensorFlow." It is, we live in a world which you need to expand your mind and not naturally create this, like, binary A/B thing. >> Stu: It's a multi-cloud world, Chad. >> It's a multi-stacked, multi-cloud, multi-use case world. >> An inter-genius mess in IT that we've been dealing with. >> So another thing that analysts do a lot is give unsolicited advice. (Chad laughs) So I want to do that and maybe get your reaction. So, Amazon's operating profits are roughly almost double what EMC's were, Amazon Web Services, when EMC was a public company. Massive change and disruptive force in our industry. And frankly, if it weren't for AWS, we wouldn't be where we are today as fast as we were, so I see your joint challenge as fulfilling the vision of what we call true private cloud. Substantially mimicking the cloud experience on-prem. And you're behind, and you know you're behind at that, because Amazon's by definition in the lead. So your challenge as we see it is to create that experience and create that automation and allow people to shift their labor costs to the fun stuff. >> By the way, I agree, and I accept that advice. You can answer for you, but I'll tell you, we've been trying to ... So we started with the first enterprise hybrid cloud efforts almost three and a half years ago, and they're enormous, and at the time we said, "And deploy it on anything you want." And you know what? We had very limited success with that. And the reason we had limited success wasn't because we didn't get the customer going, "Yes, I want to have a hybrid cloud, "where I can bridge and connect to "multiple different public cloud targets." That idea, dead right. The idea of you can build it any way you want? Wrong. Then we said, "Okay, you know what? "CI is a simplification." What we realized is that life cycling CI stacks along with a CMP layer, whether it's inside an integrated thing, or whether it's directly adjacent, still too complex. The latest is basically all of our hybrid cloud, whether it's destined towards enterprise IAAS or PAAS on prem, runs on HCI. When? Always. Because HCI is fundamentally orders of magnitude easier to symph, to deploy, to scale, to version, etc., etc. What I've been seeing over the last 24 hours about basically the Calm acquisition becoming part of Acropolis, is the example where Nutanix is taking it, where they're trying to build it into the Calm and Acropolis stack. I think that's a common vision between the two companies. >> What you will hear from HP or Cisco or EMC or Nutanix, the picture isn't going to change much, because we all know what the blueprint looks like. I think the real question is, how do you get there? How you do that is where the difference is going to be, and the advantage we have is that because we built every stack with that clean architecture in mind, the North Star being, we have to deliver a fully-automatable stack, we have an added advantage of building every step connect naturally to the next step. So for example, our metadata structure, our storage fabric, our virtualization fabric, AHV, our automation fabric on Calm, and how we are introducing Xi, that's a hybrid cloud service, it is all controlled from Prism. And that Prism itself and Prism Central are fully distributed. So that ability to deploy this at scale across multiple continents and manage it, that is very similar to how Amazon ... The reason why Amazon can deliver millisecond billing on Lambda stack is not because they are taking ten different products. They have technology that is built to deliver that level of granularity. >> So again, I agree, but there's an element that I disagree. Calm was an acquisition. Calm was an acquisition of people and talent to basically extend up into the IAAS, chargeback, billing, self-service portal domain. No disrespect of the decision, technology, architecture. You've done, obviously, great progress that you've shown to the market the last two days about how you're integrating that into your stack. We've been at this now for four years, and we've looked at, how do we need to keep evolving our own Dell Technologies stacks? Again, it's not an either/or. So for example, we do multi-site PCF deployments directly on top of a HCI target that has total life cycle, completely distributed stack, and the Pivotal/Google work around Kubernetes coming as part of Pivotal, which echoes a lot of the Kubernetes becoming part of your stack as well. Kubo highlights what we're all trying to do towards that target. Again, I think that the natural tendency because people like to see car races to watch for crashes, cheetahs chasing lions ... >> Or something like that. >> I think we're all striving to do what you said. The customer demand for simple-to-operate, simple-to-deploy, simple-to-scale, turnkey IAAS, PAAS, and even SAAS stacks that're a hybrid deployment model, that is a fact. How customers need to evaluate all the choices in the marketplace is again, who does it best? >> And if you don't, you're the deer, is your point. >> Chad: You're the lion or the deer. >> I wish we had more time, guys. I'll give you both the last word. Chad, you're everywhere this week, and everywhere every week, but final thoughts. >> Final thoughts, I mean, customers can know that we're committed to customer choice, we're committed to this partnership. The number of customers in revenue continues to grow. Our point of view is that we've got a portfolio approach, but no one should be confused about what that means. That means that we're committed to the partnership. Customers, I've talked to a lot of them here, they're happy. Never punch your customer in the face, and never punch yourself in the face. Simple strategy from Chad Sakac. >> Sudheesh, put a capstone on it. >> My point's very simple. I think this is a partnership that is working. The company's run by really smart people. I don't think we are interested in doing anything that is going to make our customers' decision a wrong one for them. And we are committed, we are committed to innovate, and are committed a service to join customers together. Thank you. >> Guys, you know, you guys make this job fun. Thank you so much for coming on the Cube. Really appreciate it. >> It's our pleasure, guys. Remember, Happy Canada Day! >> All right, July 1st. Love it. All right, keep it right there, everybody. We'll be back with our next guest right after this short break. (electronic music)

[Voiceover] Live from the Mandalay Bay Convention Center in Las Vegas it's The Cube. Covering VMworld 2016. Brought to you by Vmware and it's ecosystems sponsors. Now, here are your hosts, John Furrier and Stu Miniman. >> Welcome back everyone we are here live in Las Vegas for VMworld 2016 at the Mandalay Convention Center. We're in the hang space where The Cube is located. I'm John Furrier with Stu Miniman. We're here with Chad Sakac the President of EMC's Converged Platform division formerly known as VCE. Welcome back. Great to see you. Fist pump. >> It's good to see you. >> Seven years we've been doing The Cube you've been on it every single year. >> I can't believe it. >> We love having you on. >> The Cube has become a fixture of VMworld for me. Seeing you guys. Your good looking faces. It puts a smile on my face. But I can't believe it's been seven years. That's insane. >> Yeah. The seven year itch as they say in VMworld. So I got to ask you. You're always candid and colorful. But you've seen the transition. You've been in the trenches. Coding. Now you're president of a division. Big division doing great. >> It's terrifying isn't it? (laughs) >> It's interesting. The Cube is bigger. We're all getting bigger. What's your take right now? You've seen the journey. Seven years. Where are we? >> VMworld has always had a huge community. One of the things that's been defining about VMware's whole journey has been the community. And that's one thing that has stayed pretty constant. Right? There's a lot of people here. This time in Vegas. Previously in San Fran. They share a passion and a love for all things that Vmware is doing. That said. It's a very different show. It's a very different context. It's a very different ecosystem. Literally at the beginning it was one product. Right? Now if you look at the keynotes they have to struggle to get all of the awesome into an hour and a half and do it in two days. Right? And they can only hit certain highlights. Sanjay did a great job today. Kit did a great job. My favorite, Yanbing. Yanbing Li has got passion, energy and loves her baby vSAN. But imagine trying to cram all of that stuff in previously in years past. If you go back seven years that would've been all of Vmworld would it had just been on just one thing. Right? And then obviously the other thing that's going on is the entire ecosystem has changed. So we're seeing consolidation in the ecosystem. But we're also seeing, I think Pat actually did the best job I've ever seen of that realistic balance of what's happening in traditional IT, private, public hybrid cloud models. And how that's going to play out over the next few years. But there' no question that public clouds are a huge part of the landscape for here. For now. For tomorrow. Forever. >> Pat got some criticism on Twitter. Also, some blog posts out there said that the keynote was a snoozer. But it was straight talk. And that's what the ecosystem wants and we're hearing. Stu might have his own opinion on this but what I'm hearing is I want to see the path. I want to see where VMware is going to be going so I can get behind that train. Clarify. Show me the straight and narrow roadways so I can turn up the gas a little bit. >> There's the expression that basically says the customer is always right. Or the people are always right. You can trust the people. Sometimes the customer is wrong. And sometimes the people are wrong. So last year they went bananas over vMotioning of VM between two clouds. Because it plays to the base. It plays to the audience who are like I love vMotion. Why wouldn't vMotion between clouds make sense? The reality of it is that while that was cool and technically accurate. This year's demonstration of basically saying no, you're not going to motion vm between on prem and public clouds very often, if at all. But you will need to be able to do things that bridge public clouds. Is actually a much more correct and relevant answer for the market. Now the difficulty is is that sometimes you're telling people things before there ready to fully internalize it. >> Embrace it. (laughs) It's shock of the system almost. Really. So you play the base. It's a lot like politics in that way. But I got to ask you the question. >> By the way. Just like in politics if you constantly play to the base you never move forward. >> Yeah. And this has always been a diverse ecosystem. So let's start with the cloud things. Obviously ecosystem is back on the table, I'd say. It's front and center. It's always been front and center but as it consolidates we're seeing its straight path. The question that people want to know is. Will everyone have fair access to the VMware as an independent company visa the new big mega merger was announced by Michael Dell just minutes ago that September seventh will be the close date. >> What are you talking about? >> Dell Technologies. >> What? (laughter) >> You can talk about it. Dell announced it. Michael tweeted about it. >> We're not bait and switching you. We'll show you his tweets if you want. >> I'm joking. I'm joking. And by the way, I'm so pumped and so excited. Frankly, I think not everybody understands exactly what's going on inside the industry. The server storage and networking ecosystems as stand alones are actually shrinking. As workloads move to SAS. As workloads move to public cloud IOS. The parts of the ecosystem that are growing are customers that are basically saying they want converged, hyper-converged and turnkey software stacks and that's they way they want to consume. They want to simplify stuff down. To be able to pull that off you have to have all the ingredients inside the stack. Increasingly, you will not be able to be competitive without having all the those components in the stack. And this is why I am passionate that convergence hyper-convergence and convergence and also turnkey software stacks will be at the center of Dell Technologies. And I keep telling Michael and he keeps agreeing which is a good thing. Right? The reality of it is is that we cannot, in spite of that statement being true, it is also true that people will continue to want variability. That may a be a declining set but it's a bigger set of customers. And the customers are like I'm all in on turnkey. So this one is smaller but growing faster this one's a much bigger ecosystem of, I'll mix and match whatever I want and put it together. Alright? So if you look at Yanbing's section. So she said HP with vSAN. Then she went VxRail and Yanbing thanks for the shout out during the session. That was awesome. They were powering basically some great events with Di data and powerful things in small packages. That's a highly integrated system. And then they brought up a customer that was totally building it themselves. Right? So it literally in a span of two minutes you had the continuum of build it yourself, a turnkey thing and it build it yourself. So will it be sustained? Yeah. Can you expect that we are going to lean in like crazy on our integrated stack? Yeah. But will we do it in exclusion of the ecosystem? No. >> There's just different use cases. >> Yeah. VxRail is winning in the marketplace because it's a highly opinionated vSphere HCIA. If you don't have vSphere. You don't like VMware it's not the HCIA for you. Right? However, more customers say yes than they say no. And that's awesome. But we know that we're going to need to create a next generation of the Microsoft Azure stack. On prem HCIA. It won't be built by the VxRail team. But there customers want it that way. And we're not talking about it a lot this week. But last week we launched VxRack new treno which is a turnkey open stack KVM SUSE based thing. Choice baby. >> So Chad, first of all the Dell deal is announced. So this is the final nail in the coffin of VCE, correct? >> Absolutely. Of course not. The reason that we are shifting the way we talk about VCE is something really simple. If I say VCE what's the first thing that appears in your brain? >> Stu: vBlock. >> Va-blah vBlock. And that's a good thing in a sense. >> How much revenue did you do last year, Chad? >> Three point five plus billion dollars. Almost entirely in vBlock and VxBlock. >> That would be a nice a public company on it's own. >> On it's own. Right. And growing at 40% cumulative annual growth rates. That is amazing. Right? >> It's not a fail. >> And by the way the thing that's interesting is that hasn't slowed down one iota in spite of the fact that everyone knows the Dell deal is going to close. However, the difficult it is is that we are no longer just he vBlock group. We have these hyper converged appliances that are growing like sync and customers are voting with their feet and their dollars. I think in a short amount of time we'll be the number one by customer, by revenue HCIA player in the market. But furthermore, we also do these turnkey cloud stacks. So realistically VCE is more of a product brand than it is a company brand. And we're no longer a separate company. We're a part of VMC and on the seventh we'll be part of Dell EMC. >> Chad, can you help us connect the dots? We've got the converged infrastructure. The platform. You've got some SUSE team. Talk about SAS and public cloud. How does Dell, EMC, VMware stay relevant going forward and play a part in that whole story? >> So it's a great question. I'm going to try to see if I can do this in an uncharacteristically concise way. Do you believe that hybrid cloud models will win? >> Stu: Sure. >> Chad: Do you really believe it? >> I mean what we have today isn't really good hybrid cloud but that's where we need to go. >> So, by the way, we need to make the on premise clouds as simple and easy to consume in utilized modes as the public clouds are. >> Stu: Love that. >> Chad: Right. However, I think that it is inherent that economics, governance, data gravity will always balance out some workloads biasing toward public. Some biasing towards private. Furthermore, do you think that there will be one cloud model that will win? Will it all be the VMware SDDC cloud? Will it all be Azure? Will it all be Amazon? Will it all be cloud foundry? Will it all be SoftLayer? >> Well Andy Jassy has an answer for you but many people will differ with that. Including Satcha and Michael and everybody else. >> I think that there's never been in the history of all time any sustained period where there's a singularity of a stack. >> VMware has done pretty good for a while. >> Yep. But, by the way, there's never been in all of history any extended period of time when there's been a singularity of a stack. Right? So our point of view is very simple. My mission in the converged platform division today is basically to build turnkey CI and HCI to power VMware powered clouds and Cloud Foundry power clouds. Tomorrow, meaning on the seventh, immediately my strategic posture toward Microsoft pivots. EMC has always had a partnership with Microsoft but nothing like Dell's. Right? So immediately, I'm going to go. Well we must have the best on and off premises version of the Microsoft Azure stack. Dell currently leads in that market but it's very early days of that. We go from having two clouds both on and off premises. To a third one that we add. And then of course there's a fourth one which says if you want to run your most mission critical, business critical, classic apps. Virtustream is the way to go for an SAP legacy landscape. That you want to put in the cloud. That needs to have an on premise variant too. So, four clouds. Each one on and off premises. Each one available in Capex or utilitized models. If we can pull that off we can be the strongest cloud player on the market bar none. I think that's cool. >> With the choice as the key sales pitch to the client which is pick the cloud that does the best job. >> The thing that's interesting is that sometimes choice is a euphemism for blah. Like I have no strategy. I have no opinion. It's just pick whatever you want and assemble it. What I'm describing is something a little different. Which is a choice between four highly opinionated turnkey offers. >> Okay. >> Right? Now of course, we'll enable customers to build there own things but I think that over time less and less customers are going to want to do that. >> And Chad, I think that points to what we've seen in the wave of converged infrastructure and cloud is we need to get out of that heterogenous mess where I've got the poor guy buried in wires. Running around. Trouble tickets and everything else like that. It needs to be simpler. We need to have the management tools. Chad, I want to get your viewpoint on VMware. One of the criticisms I've heard is kind of the cloud management stack. We've been swinging a bunch at this and we don't yet have a solution that customers are happy with. Where do you think we are? Where do we need to go? >> So, you've been around the block on this and customers who are watching this have been around the block on this. Cloud management platforms are tough. Its actually a very, very fragmented market. With very little consolidation in the past or even looking forward. Now inside that space vRealize is actually the strongest. And it's the most deployed. It's the most widely used. But again, I don't want to make it sound like ahh we're number one. Right? Clearly there's a lot of work to be done. Last night I was talking with Sajay who heads up the vRealize suite team. And what we've seen is that the team has done a lot of work out of the 6.x, 6.5 dot and you know 6.X days into the 7.X days. And customer feedback is that it's much closer to the mark. A in terms of core product workflow, upgrade-ability. All of those sorts of things. But also in the fact that it actually has extended out to be able to automate and deploy on top of Azure and AWS. In the beginnings of the extended cloud connects vision. Now that said. In those four opinionated cloud stacks. Now this is my personal opinion, here Stu. So I always have to safe harbor all that jazz. (laughs) I think that what you see is you see those highly opinionated cloud stacks. The CMP layers, the top part of it, being able to speak to each other but always favoring their own ecosystem. Right? I think that we're going to be in that mode for a long time. >> So Chad, some people might not be aware that in addition to the VCE products in there that the solutions piece and the cloud that you have. The progress that you've made. We've talked to some of your team. I think we've got Peter coming on today. Can you talk about the EHC NHC maybe even share a bit of revenue if you can. >> Yeah. Sure. First things first, it's important to understand this at its core. The original idea of VCE, which is now eight years old, was a basic premise that says we have a pile of giblets that are all awesome. However, customers struggled to assemble them. And they want to have a turnkey offer that they can lean on us to not only deploy but sustain, support as a single offering. That was the origination story. Replace server networking compute with hypervisor, IT business operations a CMP all of those things and you have the enterprise hybrid cloud. We started getting lots of feedback from customers. We love vSphere. We love vRealize. We love vRealize automation and operations. We love all of this log-in sites stuff. We're all in with Vmware can you guys give us the easy button? Right? And so we started on version one. Then on version two, version three, 3.5 and this week we announced version 4.0. Right? We're now up to hundreds of customers so it's still in the hundreds. But it is the most curated. The most turnkey way to get the VMware SDDC deployed. Now, I still think we have a long ways to go. Because we need to make it so push button, easy. And cloud foundations that Pat announced on Monday. Is a core part of that. Think of cloud foundations turning to validated designs and the enterprise hybrid cloud being the ultimate manifestations. >> Chad, just a clarification. Hundreds of customers but from a revenue standpoint that's probably bigger than the hyper-converged market. >> So you know what's fascinating. That's actually a fact. So I hadn't really thought about it. But we're currently on a revenue run rate that we don't disclose publicly, but I'm like, how do I tiptoe around this? It is larger than the largest HCIA players by a good market margin. >> Right. >> So you're talking about hundreds of millions of dollars worth of annual revenue. And customers are saying, look I'm in. I saw the keynote. I'm aligned with VM where I want to go. Right? And enterprise hybrid cloud is designed to do that. We keep reiterating on it. On virtual geek there's a whole slew of details on the 4.0 lease. And then the other thing that we started to see is we started to see customers say, I get it. With the enterprise hybrid cloud you've made my IT operations for classic IT better. How do you help my developers build the digital enterprise? Which doesn't start with infrastructure. And it doesn't start with IAS. It starts with the way developers see the world. Which is the platform layer. And we're on version 1.1 now of the native hybrid cloud which is targeted at how do we build a platform for building cloud native apps? And that starts not with infrastructure. Not with VMware. Not with EMC. Not with servers or network. It starts with cloud foundry. >> Chad, we got to wrap. I want to get one final point in and I want to get your thoughts on it. It's more of a historical perspective but also kind of a futuristic. Take your EMC hat off and put the personal Chad hat on. The ecosystem. Where is it going to go? Obviously it's consolidating. Which means it's shifting. So the old ecosystem was great and robust as you mentioned. It's not necessarily dying. It's just shifting. It's consolidating. So that means it's shifting to something else where there will be growth. Where is it moving? Where is that puck going so people can skate to where the puck will be? >> That's a great question, John. I'm always a geek at heart. I'm always going to run that vSphere cluster in my basement. It gives me joy and gratitude on cool new intel NUC. Great stuff. But in my new job. (laughs) as the leader of a big business. The broad landscape picture is fascinating. This isn't actually rocket science. You can decode it remarkably and quickly. In industries that are declining or under pressure. Secular pressure. Consolidation is inevitable and you have to pick your partners wisely. I think people underestimate how much giants that they would think of as safe and secure bets are under pressure. Michael was wise enough to take first mover advantage. Because in those periods no one has shrunk themselves to success. Right? Conversely, you see very diversified ecosystems. When you see a very diversified ecosystem ergo cloud management platforms. Ergo security, like oh my goodness, the number of security startups and players. A hyper converged startups. I count 39 of them at the last turn. Right? They go through a life cycle of explosion of ecosystems and then inevitable consolidation phase. And people look at that consolidation phase and say oh, the fun is all over. No that means that the fun has begun because your actually starting to really move the needle at customers. Right? So you can expect to see consolidation and security space. You can expect to see by the way very disruptive point technologies occur. The container ecosystem is going to explode and then consolidate. And when you see that consolidation happening the container act Sysco acquisition is one of the earlier indications in that space but just one of them. It means that it's moving from sizzle to steak. Again, look at the open stack ecosystem. About a year ago everyone was like, all the fun is over. All of them have consolidated down into the big massive players. It's because people are now getting down- >> John: Rubber is hitting the road. >> Rubber is hitting the road. >> So where is it going now? Where is the fun going to be? >> The fun is definitely going to be very much in new data fabrics and new applications. There's no rocket science there. The space that you saw the tip of the iceberg on the cloud. Cloud connection of how you can bridge. Bridge doesn't mean migrate it means create connective tissue between on premises and off premises clouds. It's going to be really, really interesting. I think one thing that is fascinating is roles for human beings that span functions. That is the new magic mojo. When I find someone who is a developer. Who understands infrastructure they've got mojo. When you find someone who understands the span of what's going on inside the ecosystem that person's got a bright future. >> As they say in baseball, the players have to have multiple tools in their bag. Chad, we got to break but great conversation. Thanks for coming on. Really appreciate it. Good seeing you. Congratulations on all your business success and September seventh is going to be the big close date for the mega transaction. >> It's going to be awesome and by the way guys, congrats to you. Seven years of this is great. I can't wait for next year. It'll be a lot of fun. >> Thanks. Chad Sakac here inside The Cube. Where all the things are happening at VMworld inside the Hang Space at the Mandalay Bay this year for VMworld 2016. I'm John Furrier with Stu Miniman. We'll be right back. You're watching The Cube. (upbeat music)

hi buddy we're back this is Dave vellante Wikibon org with Stu miniman my co-host in this segment Chad saket just here a long time cube guest good friend of the cube Chad great to see you Dave it's my pleasure as always man Stu it's good to see you my friend you know it's unbelievable right we shot and I've been talking all week we started the cube 2010 at the MC world we did SI p sapphire the week right after and then the big show for us that year was was vmworld 2010 it's the best show in town it really is it's you know we said at that greatest show on earth we're betting the house on on VMware you know as a as a topic because it is the IT economy yeah obviously spent a lot of time and as you know effort and appreciate you know the shout out that you gave us the other day on the research that we just did I appreciate the shout out that you your results found well you know it's it's all legit you know as you know we do our homework but David's do put a lot of time to that Nick Allen as well so we're really proud of that that work and at the same time things are evolving yeah I guess they want to go back to it must have been 2009 maybe we sat in a room and you chuck talked the future storage networking the up security obviously compute yep management and the whole deal and we spent a good four hours in that room yep you know I was spent after that but I was just getting started I know you would just get that much everything you laid on us that day is coming true yeah really it's really true I mean you said storage is going to be invisible eventually going to get to the network I mean you know the security pieces and on and on and on so so you know I think that that's definitely the story of this year's vmworld right the idea of what VMware is done by abstracting the control plane of networking with NSX you know prior to that integration to Sierra having talked with a lot of them to see our customers they're super happy with it but prior to that it only worked with open V switch which meant it was you know reserved for the customers who are going all-in with kvm and with Zen now in vsphere 55 it supports the distributive V switch in vsphere which means that idea of network virtualization can be applied to a large swath of customers and likewise vmware is doing the same thing for the control plane of storage which you know Stu that was starting even when you were intimately involved at it when you were at emc absolutely around control abstraction using Vasa and and the early ideas of V vols and the other thing that's going on is they're disrupting the data services plane by becoming a storage vendor with their own storage stack with v Sam yeah and we're going to talk about that yeah for sure in a second I got some time on gots do so that's it that's just your wheel so on the storage piece you know unpack for us a little bit Chad you know we talked about storage becoming invisible and we'll talk about in the network space you know what is the value of the storage array of the storage stack itself and how does that play with VMware especially as we look down to everybody's showing bball so look the name of the game is hyper automation in the end it's not storage it's not networking it's not even compute right and we talked about in the past that the design and the dream of the software-defined data center we use different words for it back you know four years ago but the vision of joe and and all of the parts of the federation of emc vmware and now the third one pivotal is to try and say how do we make all the infrastructure in essence invisible pivot even takes it further by just saying hey we'll just use paths and and get rid of even all the measures are going service for years ago right I remember it well they so really do that yes so so that the reason for it is is that it sucks when you try to provision something a workload whatever the workload maybe and the tail the long tail in the process is touching the physical infrastructure of storage networking and compute virtualization historically has tackled and I would call that problem for compute in essence solved can there be improvements for compute sure bigger faster stronger right in storage land inevitably you know we move from the stage of you talk to the storage person they provision something to you to the storage person provisions a pool of something and then you can automate that and deuce from vsphere and use it through plugins and automation ultimately though you would not even want to have that step you'd want to have the storage advertise its capabilities and then when the vm gets created it says I want out of that catalog of services this stuff and that's what Vasa and whole storage policy based management stuff from vSphere 50 51 and now 55 we're all about in networking land you don't want to have to configure VLANs you don't want to have to configure firewalls you want it to be all able to be done programmatically an only way to do that is if you can like we're just talked about with storage and with compute abstract out the network topology yeah I mean I really look at it what we've always said is we need to get rid of that undifferentiated heavy lifting so that the question I have there's there's a lot of startups in this space that have built their products for this new generation builds is a vm aware if you will or just just simple simple and the critique on emc is that this is legacy equipment and well it might be integrated and you're updating it you know this was still legacy architectures you know how does that fit into the new world so you know when you are the leader everybody will throw stones at you and occasionally even as the leader sometimes we throw stones at others and I don't like that right but I think you might be talking about our friends at perhaps tintri as an example well that they are one that they are built for virtual environments absolutely and if you take a look at it what everyone who is in this space new players emerging players we're trying to today hack at that problem tintri to write because there's no constructs at the vSphere layer for vm awareness what they do in their Nasdaq we do in our Nasdaq is to say AHA file is an object a file can be snapped a file can be replicated and if we hyper couple it into vSphere using plugins and extensions we can then manage and operate on those files right now again I'm not saying that our implement eight it's up to the customers to decide about whether emcs is better or ten trees is better and ultimately the customers choose right but basically we're all kind of trying to hack at that because right now Vasa which is the official policy communication vehicle only operates on data stores data store unit of granularity right V vols has always been the target of how we would all as an industry do that right so i would i would argue that what we showed today about you know recoverpoint and the splitter driver and being able to do tivo like functionality for a vm or replicate for a vm i would argue we more than hold our own with the competition but the right answer ultimately is actually to keep going down the path of V vols in the evolution of vaasa so that you know it can be done correctly and not fake vm awareness but actually have fundamental vm awareness I so since we started on storage I got to chime in here so a couple things so I asked Pat this this morning and his response was essentially hey it's all good these guys are on board but I'm skeptical so about what here's the here's the about what so as I said sort of off-camera Microsoft and Oracle I've already been grabbing storage function and their narrow little parts of the world but you p.m. seen a nap everybody else you've seen NEP but particularly Mabel to find ways to add value I compete very effectively there iam VMware's this horizontal player mm-hm and doing something like v san yep you know its nose software-defined this is you know the future I said to Pat well don't guys like EMC and netapp and shirts certainly HP and itachi and IBM etc don't they want to do their own software-defined he goes yes but they're sort of bought bought into this and what do you think about that as a salt as emc I think I think I don't know whether it's right to say it on camera or not I think that basically as NSX was announced and v san has been announced and everybody in the industry is known that these things are coming you know you could hear audibly people's uh what this what the you know you know you're kind of a cisco right of these in I mean so V sans idea of saying hey I'm going to glom the storage that's in the server the dads the flash the pcie-based flash and use it as a distributed storage layer is a good idea it's an idea that is real and innovation is non containable as as Pat would say you know he's a super fan of andy grove right you know is his mentor Andy Grove had a famous quote that basically said innovation can't be stopped if the incumbents don't do it new startups will arrive that will do it yeah no that's that's fair right Sam Palmisano as well said you're going to get commoditized no matter what so so but the key thing is that it will take some time for V Santa mature the 10 target was correctly positioned in the in the keynotes as use it for non-persistent VDI use it for tests and Dev customers are slowly starting to grok the idea of hey wait a second this thing by definition has to create multiple copies of the data on multiple servers so it's space efficiency is not as good right but I think what's going to occur is your people are going to start to use it and they're gonna dig it yeah they're going to want more and they're going to want more which is great right now from our standpoint EMC sales reps may not like it but EMC likes it because you know what there are portions in the market where we have had great success taking lots of share continue to outgrow the competition but there's other places where we frankly fail to serve properly and if those customers choose v san kumbaya customer happy shareholder happy it's all good right v san will expand though right and in fact as a company we embrace the idea of a software-only data service and this is a data plane thing not a control plane thing that's why we acquired scale io recently right because we're looking a look v san will be the answer for customers who love vmware and our 100% vmware and i talked to a big one today who are like yep that's us likewise i talked to a huge one that were like nope we need an answer that's like v san but works with kvm Zen and hyper-v and vsphere some people like their stacks to lock in at one point and their trade that off and your surveys showed that yeah yeah others about half a woman to live with that right and get function they get function and simplicity right and V San will be phenomenal at that as people are seeing now right i've been using the beta for a long time so I know what but the reality of it is that it's going to be a broad kind of ecosystem of traditional storage stacks embedded into hypervisor storage stacks ones that are packaged as bring your own server akv San and scale IO type things ones that are packaged as will give you the server to new tannic simplicity we live in a beautiful chaotic works hope so boyer in this piece the piece that he had stew did took a little shot at the cartel and you didn't like that you thought you shot back so no that is absolutely not not how we roll it's not how are you roll so so how do you roll hotel eat what you kill Isaac cuts hit it you know so listen to be very blunt I'd be lying if I didn't said that there weren't moments whereas EMC we don't get frustrated that hey you know VMware you you should always work with us right again it happens more in the in the field rather than from a you know our headquarters standpoint right there's times where VMware gets really grumpy when EMC is supporting hyper V or OpenStack and a customer right there's times where vmware is really angry that pivotal runs on AWS and like the announcement earlier this week was hey it works great on vsphere like so think about how weird that is it's been like running on AWS for a while now it runs on vsphere and I bchs right Joe is I think Joe Tucci i think i have an insane amount of respect for that guy he was wise enough to go i need to resist the temptation to simplify for our own internal purposes and create lock-in from the past stack through the app stack through that you know vmware stack through the emc sec and instead say you must all fight for the customer independently and EMC you have to pursue it assuming that VMware isn't a constant VMware you must pursue it as if EMC is certainly not a constant pivotal you should pursue it as if neither one of them is a constant now the one thing that I would highlight to everybody who's watching is don't understand miss understand what I'm saying at the same time whenever one of them is not the best choice for the other jogos hey hey what's up guys it's got this yeah who's got this ball so when V CHS was being stood up and they were looking at alternate storage choices Pat didn't say you have to use EMC but he knocked and said guys we're looking at different storage choices you better come in here and if you don't win on your own merits we'll go with someone else you know I think thankfully they did right and we made that argument you're saying if part of Pat's 50 billion dollar cam comes out of AMC's hog well that's the MCS problem they got to figure out how to shore it up yeah we have to figure out how to compete Chad wonder if you know you own the global se forth you know for emc in this ever complicated world it was you know it wasn't easy when you created the V specialist force but it was focused on VMware and they got a lot of weight behind that there were product managers marketing people all with vmware yep titles inside emc in this world of OpenStack and you know hyper-v and kvm how do you deal with that in the field so so that's a great question man so the first observation just while there is diversity right your survey reflects what I tend to find at my customers right which is overwhelmingly VMware within the enterprise use of some k VMS and OpenStack you know where they would have used vSphere or or the vcloud suite a little bit of dabbling in the enterprise some enterprise customers more than others the cloud service cloud service providers far more right when we were doing the V specialist thing it was an effort to rapidly ramp things up and so we built small focused team small focused product managers what's now happened over the last four years is you know if you think back man like EMC was like a no-show at vmworld 2006 right we our company got the memo focused in we won the best storage choice for VMware deepest integration blah blah blah the what's HAP makes me very happy now is that's now embedded into the product teams it no longer requires a someone watching it just happens organically gooood from a field standpoint the V specialist role many of those V specialists are now leaders of the SE orgs and all sorts of functions so it's no longer somebody thing it's now on everybody thing right but the V specialist mission which used to be makes sure that emc is the best choice for VMware has broadened out to really be best choice for the vcloud suite and VMware stack and also OpenStack to understand and reflect the fact that it's a it's a dynamic open world so so we brought to get in the hook and made me talk about networking so we're just going to ignore the hook for now and talk about networking so NSX yes awesome we saw Martines yeah a little demo up there but it's not going to be that simple why is networking so so hard and you now remember 2009 yeah showed us the roadmap yep now we're here where's it's so first things first what he demoed it is actually that simple if you can constrain a whole bunch of parameters right so if you can constrain yourself to every endpoint is a distributed virtual switch or an open V switch like that thermodynamics problem you can so know what I'm talking about so so if some assumptions its simplify rate they write it if you can if you can constrain it and say everything is connected to a distributive e switch from VMware or an open V switch from kvm and Zen and you assume that the net physical network layer is a bottomless pit of bandwidth and latency in other words you know that there will never be a contention you know at the core networking layer it actually is really that easy right now that may sound like Chad those two constraints are stupid they're not actually that stupid right within the core data center bandwidth is very easy to apply it's much easier to say I'll deploy 10 gige and then go to 40 gig e than it is to hyper design the data center with qos and manage the you know customers have demonstrated time and time again that they'll just go from one gig to 10 gig to 48 to 100 gig rather than trying to hyper engineer the whole thing inside the data center in the wam different story right right also I mean it is a true statement to say in a service provider and in most enterprises eighty ninety percent of their workloads do finish on a thing that is attached to a distributive virtual switch or a physical switch right now where it's going to get funky is that obviously I think NSX is perhaps out there in front in terms of SDN land but they're not alone you know there were lots of partners and we know that cisco has got some cool stuff that they talked about at Cisco live and that our are coming right and you can't you know this goes an amazing company and they have many beloved customers and CC IES and CCNA s around the globe that you know are going to be very interested to see what since you been see I mean interesting play and you can read all about it online and people speculation sure yeah it's going to it's going to be cool though I mean I think one thing that is fun to remember is like innovation is non-stop about it'sit's disruptions or can't be stopped they're going to happen no matter where and in the end it's fundamentally all good for the customer whether it's real CVM where NSX whatever what I love and I said this the pet and I said this did Paul Moretz when I first heard his you know vision I said you guys vmware is ambitious you know if nothing else its ambitious and it's executed on that ambition so it's toss them to watch oh and you know stay tuned for next week September the fourth speed to lead there's some exciting stuff coming from EMC we generally have learned over the years that it's not a good idea to do mega launches and big things during this week because like you said this is this is vmware show and it's the greatest show on earth right yeah okay so we'll stay tuned for that will be watching hi Chad thanks very much for coming on the cubase oh it's my pleasure guys thank you so much I keep right there buddy we're right back after this quick word

(upbeat music) >> The ascendancy of cloud and SAS has shown new light on how organizations think about, pay for, and value hardware. Once sought after skills for practitioners with expertise in hardware troubleshooting, configuring ports, tuning storage arrays, and maximizing server utilization has been superseded by demand for cloud architects, DevOps pros, developers with expertise in microservices, container, application development, and like. Even a company like Dell, the largest hardware company in enterprise tech touts that it has more software engineers than those working in hardware. Begs the question, is hardware going the way of Coball? Well, not likely. Software has to run on something, but the labor needed to deploy, and troubleshoot, and manage hardware infrastructure is shifting. At the same time, we've seen the value flow also shifting in hardware. Once a world dominated by X86 processors value is flowing to alternatives like Nvidia and arm based designs. Moreover, other componentry like NICs, accelerators, and storage controllers are becoming more advanced, integrated, and increasingly important. The question is, does it matter? And if so, why does it matter and to whom? What does it mean to customers, workloads, OEMs, and the broader society? Hello and welcome to this week's Wikibon theCUBE Insights powered by ETR. In this breaking analysis, we've organized a special power panel of industry analysts and experts to address the question, does hardware still matter? Allow me to introduce the panel. Bob O'Donnell is president and chief analyst at TECHnalysis Research. Zeus Kerravala is the founder and principal analyst at ZK Research. David Nicholson is a CTO and tech expert. Keith Townson is CEO and founder of CTO Advisor. And Marc Staimer is the chief dragon slayer at Dragon Slayer Consulting and oftentimes a Wikibon contributor. Guys, welcome to theCUBE. Thanks so much for spending some time here. >> Good to be here. >> Thanks. >> Thanks for having us. >> Okay before we get into it, I just want to bring up some data from ETR. This is a survey that ETR does every quarter. It's a survey of about 1200 to 1500 CIOs and IT buyers and I'm showing a subset of the taxonomy here. This XY axis and the vertical axis is something called net score. That's a measure of spending momentum. It's essentially the percentage of customers that are spending more on a particular area than those spending less. You subtract the lesses from the mores and you get a net score. Anything the horizontal axis is pervasion in the data set. Sometimes they call it market share. It's not like IDC market share. It's just the percentage of activity in the data set as a percentage of the total. That red 40% line, anything over that is considered highly elevated. And for the past, I don't know, eight to 12 quarters, the big four have been AI and machine learning, containers, RPA and cloud and cloud of course is very impressive because not only is it elevated in the vertical access, but you know it's very highly pervasive on the horizontal. So what I've done is highlighted in red that historical hardware sector. The server, the storage, the networking, and even PCs despite the work from home are depressed in relative terms. And of course, data center collocation services. Okay so you're seeing obviously hardware is not... People don't have the spending momentum today that they used to. They've got other priorities, et cetera, but I want to start and go kind of around the horn with each of you, what is the number one trend that each of you sees in hardware and why does it matter? Bob O'Donnell, can you please start us off? >> Sure Dave, so look, I mean, hardware is incredibly important and one comment first I'll make on that slide is let's not forget that hardware, even though it may not be growing, the amount of money spent on hardware continues to be very, very high. It's just a little bit more stable. It's not as subject to big jumps as we see certainly in other software areas. But look, the important thing that's happening in hardware is the diversification of the types of chip architectures we're seeing and how and where they're being deployed, right? You refer to this in your opening. We've moved from a world of x86 CPUs from Intel and AMD to things like obviously GPUs, DPUs. We've got VPU for, you know, computer vision processing. We've got AI-dedicated accelerators, we've got all kinds of other network acceleration tools and AI-powered tools. There's an incredible diversification of these chip architectures and that's been happening for a while but now we're seeing them more widely deployed and it's being done that way because workloads are evolving. The kinds of workloads that we're seeing in some of these software areas require different types of compute engines than traditionally we've had. The other thing is (coughs), excuse me, the power requirements based on where geographically that compute happens is also evolving. This whole notion of the edge, which I'm sure we'll get into a little bit more detail later is driven by the fact that where the compute actually sits closer to in theory the edge and where edge devices are, depending on your definition, changes the power requirements. It changes the kind of connectivity that connects the applications to those edge devices and those applications. So all of those things are being impacted by this growing diversity in chip architectures. And that's a very long-term trend that I think we're going to continue to see play out through this decade and well into the 2030s as well. >> Excellent, great, great points. Thank you, Bob. Zeus up next, please. >> Yeah, and I think the other thing when you look at this chart to remember too is, you know, through the pandemic and the work from home period a lot of companies did put their office modernization projects on hold and you heard that echoed, you know, from really all the network manufacturers anyways. They always had projects underway to upgrade networks. They put 'em on hold. Now that people are starting to come back to the office, they're looking at that now. So we might see some change there, but Bob's right. The size of those market are quite a bit different. I think the other big trend here is the hardware companies, at least in the areas that I look at networking are understanding now that it's a combination of hardware and software and silicon that works together that creates that optimum type of performance and experience, right? So some things are best done in silicon. Some like data forwarding and things like that. Historically when you look at the way network devices were built, you did everything in hardware. You configured in hardware, they did all the data for you, and did all the management. And that's been decoupled now. So more and more of the control element has been placed in software. A lot of the high-performance things, encryption, and as I mentioned, data forwarding, packet analysis, stuff like that is still done in hardware, but not everything is done in hardware. And so it's a combination of the two. I think, for the people that work with the equipment as well, there's been more shift to understanding how to work with software. And this is a mistake I think the industry made for a while is we had everybody convinced they had to become a programmer. It's really more a software power user. Can you pull things out of software? Can you through API calls and things like that. But I think the big frame here is, David, it's a combination of hardware, software working together that really make a difference. And you know how much you invest in hardware versus software kind of depends on the performance requirements you have. And I'll talk about that later but that's really the big shift that's happened here. It's the vendors that figured out how to optimize performance by leveraging the best of all of those. >> Excellent. You guys both brought up some really good themes that we can tap into Dave Nicholson, please. >> Yeah, so just kind of picking up where Bob started off. Not only are we seeing the rise of a variety of CPU designs, but I think increasingly the connectivity that's involved from a hardware perspective, from a kind of a server or service design perspective has become increasingly important. I think we'll get a chance to look at this in more depth a little bit later but when you look at what happens on the motherboard, you know we're not in so much a CPU-centric world anymore. Various application environments have various demands and you can meet them by using a variety of components. And it's extremely significant when you start looking down at the component level. It's really important that you optimize around those components. So I guess my summary would be, I think we are moving out of the CPU-centric hardware model into more of a connectivity-centric model. We can talk more about that later. >> Yeah, great. And thank you, David, and Keith Townsend I really interested in your perspectives on this. I mean, for years you worked in a data center surrounded by hardware. Now that we have the software defined data center, please chime in here. >> Well, you know, I'm going to dig deeper into that software-defined data center nature of what's happening with hardware. Hardware is meeting software infrastructure as code is a thing. What does that code look like? We're still trying to figure out but servicing up these capabilities that the previous analysts have brought up, how do I ensure that I can get the level of services needed for the applications that I need? Whether they're legacy, traditional data center, workloads, AI ML, workloads, workloads at the edge. How do I codify that and consume that as a service? And hardware vendors are figuring this out. HPE, the big push into GreenLake as a service. Dale now with Apex taking what we need, these bare bone components, moving it forward with DDR five, six CXL, et cetera, and surfacing that as cold or as services. This is a very tough problem. As we transition from consuming a hardware-based configuration to this infrastructure as cold paradigm shift. >> Yeah, programmable infrastructure, really attacking that sort of labor discussion that we were having earlier, okay. Last but not least Marc Staimer, please. >> Thanks, Dave. My peers raised really good points. I agree with most of them, but I'm going to disagree with the title of this session, which is, does hardware matter? It absolutely matters. You can't run software on the air. You can't run it in an ephemeral cloud, although there's the technical cloud and that's a different issue. The cloud is kind of changed everything. And from a market perspective in the 40 plus years I've been in this business, I've seen this perception that hardware has to go down in price every year. And part of that was driven by Moore's law. And we're coming to, let's say a lag or an end, depending on who you talk to Moore's law. So we're not doubling our transistors every 18 to 24 months in a chip and as a result of that, there's been a higher emphasis on software. From a market perception, there's no penalty. They don't put the same pressure on software from the market to reduce the cost every year that they do on hardware, which kind of bass ackwards when you think about it. Hardware costs are fixed. Software costs tend to be very low. It's kind of a weird thing that we do in the market. And what's changing is we're now starting to treat hardware like software from an OPEX versus CapEx perspective. So yes, hardware matters. And we'll talk about that more in length. >> You know, I want to follow up on that. And I wonder if you guys have a thought on this, Bob O'Donnell, you and I have talked about this a little bit. Marc, you just pointed out that Moore's laws could have waning. Pat Gelsinger recently at their investor meeting said that he promised that Moore's law is alive and well. And the point I made in breaking analysis was okay, great. You know, Pat said, doubling transistors every 18 to 24 months, let's say that Intel can do that. Even though we know it's waning somewhat. Look at the M1 Ultra from Apple (chuckles). In about 15 months increased transistor density on their package by 6X. So to your earlier point, Bob, we have this sort of these alternative processors that are really changing things. And to Dave Nicholson's point, there's a whole lot of supporting components as well. Do you have a comment on that, Bob? >> Yeah, I mean, it's a great point, Dave. And one thing to bear in mind as well, not only are we seeing a diversity of these different chip architectures and different types of components as a number of us have raised the other big point and I think it was Keith that mentioned it. CXL and interconnect on the chip itself is dramatically changing it. And a lot of the more interesting advances that are going to continue to drive Moore's law forward in terms of the way we think about performance, if perhaps not number of transistors per se, is the interconnects that become available. You're seeing the development of chiplets or tiles, people use different names, but the idea is you can have different components being put together eventually in sort of a Lego block style. And what that's also going to allow, not only is that going to give interesting performance possibilities 'cause of the faster interconnect. So you can share, have shared memory between things which for big workloads like AI, huge data sets can make a huge difference in terms of how you talk to memory over a network connection, for example, but not only that you're going to see more diversity in the types of solutions that can be built. So we're going to see even more choices in hardware from a silicon perspective because you'll be able to piece together different elements. And oh, by the way, the other benefit of that is we've reached a point in chip architectures where not everything benefits from being smaller. We've been so focused and so obsessed when it comes to Moore's law, to the size of each individual transistor and yes, for certain architecture types, CPUs and GPUs in particular, that's absolutely true, but we've already hit the point where things like RF for 5g and wifi and other wireless technologies and a whole bunch of other things actually don't get any better with a smaller transistor size. They actually get worse. So the beauty of these chiplet architectures is you could actually combine different chip manufacturing sizes. You know you hear about four nanometer and five nanometer along with 14 nanometer on a single chip, each one optimized for its specific application yet together, they can give you the best of all worlds. And so we're just at the very beginning of that era, which I think is going to drive a ton of innovation. Again, gets back to my comment about different types of devices located geographically different places at the edge, in the data center, you know, in a private cloud versus a public cloud. All of those things are going to be impacted and there'll be a lot more options because of this silicon diversity and this interconnect diversity that we're just starting to see. >> Yeah, David. David Nicholson's got a graphic on that. They're going to show later. Before we do that, I want to introduce some data. I actually want to ask Keith to comment on this before we, you know, go on. This next slide is some data from ETR that shows the percent of customers that cited difficulty procuring hardware. And you can see the red is they had significant issues and it's most pronounced in laptops and networking hardware on the far right-hand side, but virtually all categories, firewalls, peripheral servers, storage are having moderately difficult procurement issues. That's the sort of pinkish or significant challenges. So Keith, I mean, what are you seeing with your customers in the hardware supply chains and bottlenecks? And you know we're seeing it with automobiles and appliances but so it goes beyond IT. The semiconductor, you know, challenges. What's been the impact on the buyer community and society and do you have any sense as to when it will subside? >> You know, I was just asked this question yesterday and I'm feeling the pain. People question, kind of a side project within the CTO advisor, we built a hybrid infrastructure, traditional IT data center that we're walking with the traditional customer and modernizing that data center. So it was, you know, kind of a snapshot of time in 2016, 2017, 10 gigabit, ARISTA switches, some older Dell's 730 XD switches, you know, speeds and feeds. And we said we would modern that with the latest Intel stack and connected to the public cloud and then the pandemic hit and we are experiencing a lot of the same challenges. I thought we'd easily migrate from 10 gig networking to 25 gig networking path that customers are going on. The 10 gig network switches that I bought used are now double the price because you can't get legacy 10 gig network switches because all of the manufacturers are focusing on the more profitable 25 gig for capacity, even the 25 gig switches. And we're focused on networking right now. It's hard to procure. We're talking about nine to 12 months or more lead time. So we're seeing customers adjust by adopting cloud. But if you remember early on in the pandemic, Microsoft Azure kind of gated customers that didn't have a capacity agreement. So customers are keeping an eye on that. There's a desire to abstract away from the underlying vendor to be able to control or provision your IT services in a way that we do with VMware VP or some other virtualization technology where it doesn't matter who can get me the hardware, they can just get me the hardware because it's critically impacting projects and timelines. >> So that's a great setup Zeus for you with Keith mentioned the earlier the software-defined data center with software-defined networking and cloud. Do you see a day where networking hardware is monetized and it's all about the software, or are we there already? >> No, we're not there already. And I don't see that really happening any time in the near future. I do think it's changed though. And just to be clear, I mean, when you look at that data, this is saying customers have had problems procuring the equipment, right? And there's not a network vendor out there. I've talked to Norman Rice at Extreme, and I've talked to the folks at Cisco and ARISTA about this. They all said they could have had blowout quarters had they had the inventory to ship. So it's not like customers aren't buying this anymore. Right? I do think though, when it comes to networking network has certainly changed some because there's a lot more controls as I mentioned before that you can do in software. And I think the customers need to start thinking about the types of hardware they buy and you know, where they're going to use it and, you know, what its purpose is. Because I've talked to customers that have tried to run software and commodity hardware and where the performance requirements are very high and it's bogged down, right? It just doesn't have the horsepower to run it. And, you know, even when you do that, you have to start thinking of the components you use. The NICs you buy. And I've talked to customers that have simply just gone through the process replacing a NIC card and a commodity box and had some performance problems and, you know, things like that. So if agility is more important than performance, then by all means try running software on commodity hardware. I think that works in some cases. If performance though is more important, that's when you need that kind of turnkey hardware system. And I've actually seen more and more customers reverting back to that model. In fact, when you talk to even some startups I think today about when they come to market, they're delivering things more on appliances because that's what customers want. And so there's this kind of app pivot this pendulum of agility and performance. And if performance absolutely matters, that's when you do need to buy these kind of turnkey, prebuilt hardware systems. If agility matters more, that's when you can go more to software, but the underlying hardware still does matter. So I think, you know, will we ever have a day where you can just run it on whatever hardware? Maybe but I'll long be retired by that point. So I don't care. >> Well, you bring up a good point Zeus. And I remember the early days of cloud, the narrative was, oh, the cloud vendors. They don't use EMC storage, they just run on commodity storage. And then of course, low and behold, you know, they've trot out James Hamilton to talk about all the custom hardware that they were building. And you saw Google and Microsoft follow suit. >> Well, (indistinct) been falling for this forever. Right? And I mean, all the way back to the turn of the century, we were calling for the commodity of hardware. And it's never really happened because you can still drive. As long as you can drive innovation into it, customers will always lean towards the innovation cycles 'cause they get more features faster and things. And so the vendors have done a good job of keeping that cycle up but it'll be a long time before. >> Yeah, and that's why you see companies like Pure Storage. A storage company has 69% gross margins. All right. I want to go jump ahead. We're going to bring up the slide four. I want to go back to something that Bob O'Donnell was talking about, the sort of supporting act. The diversity of silicon and we've marched to the cadence of Moore's law for decades. You know, we asked, you know, is Moore's law dead? We say it's moderating. Dave Nicholson. You want to talk about those supporting components. And you shared with us a slide that shift. You call it a shift from a processor-centric world to a connect-centric world. What do you mean by that? And let's bring up slide four and you can talk to that. >> Yeah, yeah. So first, I want to echo this sentiment that the question does hardware matter is sort of the answer is of course it matters. Maybe the real question should be, should you care about it? And the answer to that is it depends who you are. If you're an end user using an application on your mobile device, maybe you don't care how the architecture is put together. You just care that the service is delivered but as you back away from that and you get closer and closer to the source, someone needs to care about the hardware and it should matter. Why? Because essentially what hardware is doing is it's consuming electricity and dollars and the more efficiently you can configure hardware, the more bang you're going to get for your buck. So it's not only a quantitative question in terms of how much can you deliver? But it also ends up being a qualitative change as capabilities allow for things we couldn't do before, because we just didn't have the aggregate horsepower to do it. So this chart actually comes out of some performance tests that were done. So it happens to be Dell servers with Broadcom components. And the point here was to peel back, you know, peel off the top of the server and look at what's in that server, starting with, you know, the PCI interconnect. So PCIE gen three, gen four, moving forward. What are the effects on from an interconnect versus on performance application performance, translating into new orders per minute, processed per dollar, et cetera, et cetera? If you look at the advances in CPU architecture mapped against the advances in interconnect and storage subsystem performance, you can see that CPU architecture is sort of lagging behind in a way. And Bob mentioned this idea of tiling and all of the different ways to get around that. When we do performance testing, we can actually peg CPUs, just running the performance tests without any actual database environments working. So right now we're at this sort of imbalance point where you have to make sure you design things properly to get the most bang per kilowatt hour of power per dollar input. So the key thing here what this is highlighting is just as a very specific example, you take a card that's designed as a gen three PCIE device, and you plug it into a gen four slot. Now the card is the bottleneck. You plug a gen four card into a gen four slot. Now the gen four slot is the bottleneck. So we're constantly chasing these bottlenecks. Someone has to be focused on that from an architectural perspective, it's critically important. So there's no question that it matters. But of course, various people in this food chain won't care where it comes from. I guess a good analogy might be, where does our food come from? If I get a steak, it's a pink thing wrapped in plastic, right? Well, there are a lot of inputs that a lot of people have to care about to get that to me. Do I care about all of those things? No. Are they important? They're critically important. >> So, okay. So all I want to get to the, okay. So what does this all mean to customers? And so what I'm hearing from you is to balance a system it's becoming, you know, more complicated. And I kind of been waiting for this day for a long time, because as we all know the bottleneck was always the spinning disc, the last mechanical. So people who wrote software knew that when they were doing it right, the disc had to go and do stuff. And so they were doing other things in the software. And now with all these new interconnects and flash and things like you could do atomic rights. And so that opens up new software possibilities and combine that with alternative processes. But what's the so what on this to the customer and the application impact? Can anybody address that? >> Yeah, let me address that for a moment. I want to leverage some of the things that Bob said, Keith said, Zeus said, and David said, yeah. So I'm a bit of a contrarian in some of this. For example, on the chip side. As the chips get smaller, 14 nanometer, 10 nanometer, five nanometer, soon three nanometer, we talk about more cores, but the biggest problem on the chip is the interconnect from the chip 'cause the wires get smaller. People don't realize in 2004 the latency on those wires in the chips was 80 picoseconds. Today it's 1300 picoseconds. That's on the chip. This is why they're not getting faster. So we maybe getting a little bit slowing down in Moore's law. But even as we kind of conquer that you still have the interconnect problem and the interconnect problem goes beyond the chip. It goes within the system, composable architectures. It goes to the point where Keith made, ultimately you need a hybrid because what we're seeing, what I'm seeing and I'm talking to customers, the biggest issue they have is moving data. Whether it be in a chip, in a system, in a data center, between data centers, moving data is now the biggest gating item in performance. So if you want to move it from, let's say your transactional database to your machine learning, it's the bottleneck, it's moving the data. And so when you look at it from a distributed environment, now you've got to move the compute to the data. The only way to get around these bottlenecks today is to spend less time in trying to move the data and more time in taking the compute, the software, running on hardware closer to the data. Go ahead. >> So is this what you mean when Nicholson was talking about a shift from a processor centric world to a connectivity centric world? You're talking about moving the bits across all the different components, not having the processor you're saying is essentially becoming the bottleneck or the memory, I guess. >> Well, that's one of them and there's a lot of different bottlenecks, but it's the data movement itself. It's moving away from, wait, why do we need to move the data? Can we move the compute, the processing closer to the data? Because if we keep them separate and this has been a trend now where people are moving processing away from it. It's like the edge. I think it was Zeus or David. You were talking about the edge earlier. As you look at the edge, who defines the edge, right? Is the edge a closet or is it a sensor? If it's a sensor, how do you do AI at the edge? When you don't have enough power, you don't have enough computable. People were inventing chips to do that. To do all that at the edge, to do AI within the sensor, instead of moving the data to a data center or a cloud to do the processing. Because the lag in latency is always limited by speed of light. How fast can you move the electrons? And all this interconnecting, all the processing, and all the improvement we're seeing in the PCIE bus from three, to four, to five, to CXL, to a higher bandwidth on the network. And that's all great but none of that deals with the speed of light latency. And that's an-- Go ahead. >> You know Marc, no, I just want to just because what you're referring to could be looked at at a macro level, which I think is what you're describing. You can also look at it at a more micro level from a systems design perspective, right? I'm going to be the resident knuckle dragging hardware guy on the panel today. But it's exactly right. You moving compute closer to data includes concepts like peripheral cards that have built in intelligence, right? So again, in some of this testing that I'm referring to, we saw dramatic improvements when you basically took the horsepower instead of using the CPU horsepower for the like IO. Now you have essentially offload engines in the form of storage controllers, rate controllers, of course, for ethernet NICs, smart NICs. And so when you can have these sort of offload engines and we've gone through these waves over time. People think, well, wait a minute, raid controller and NVMe? You know, flash storage devices. Does that make sense? It turns out it does. Why? Because you're actually at a micro level doing exactly what you're referring to. You're bringing compute closer to the data. Now, closer to the data meaning closer to the data storage subsystem. It doesn't solve the macro issue that you're referring to but it is important. Again, going back to this idea of system design optimization, always chasing the bottleneck, plugging the holes. Someone needs to do that in this value chain in order to get the best value for every kilowatt hour of power and every dollar. >> Yeah. >> Well this whole drive performance has created some really interesting architectural designs, right? Like Nickelson, the rise of the DPU right? Brings more processing power into systems that already had a lot of processing power. There's also been some really interesting, you know, kind of innovation in the area of systems architecture too. If you look at the way Nvidia goes to market, their drive kit is a prebuilt piece of hardware, you know, optimized for self-driving cars, right? They partnered with Pure Storage and ARISTA to build that AI-ready infrastructure. I remember when I talked to Charlie Giancarlo, the CEO of Pure about when the three companies rolled that out. He said, "Look, if you're going to do AI, "you need good store. "You need fast storage, fast processor and fast network." And so for customers to be able to put that together themselves was very, very difficult. There's a lot of software that needs tuning as well. So the three companies partner together to create a fully integrated turnkey hardware system with a bunch of optimized software that runs on it. And so in that case, in some ways the hardware was leading the software innovation. And so, the variety of different architectures we have today around hardware has really exploded. And I think it, part of the what Bob brought up at the beginning about the different chip design. >> Yeah, Bob talked about that earlier. Bob, I mean, most AI today is modeling, you know, and a lot of that's done in the cloud and it looks from my standpoint anyway that the future is going to be a lot of AI inferencing at the edge. And that's a radically different architecture, Bob, isn't it? >> It is, it's a completely different architecture. And just to follow up on a couple points, excellent conversation guys. Dave talked about system architecture and really this that's what this boils down to, right? But it's looking at architecture at every level. I was talking about the individual different components the new interconnect methods. There's this new thing called UCIE universal connection. I forget what it stands answer for, but it's a mechanism for doing chiplet architectures, but then again, you have to take it up to the system level, 'cause it's all fine and good. If you have this SOC that's tuned and optimized, but it has to talk to the rest of the system. And that's where you see other issues. And you've seen things like CXL and other interconnect standards, you know, and nobody likes to talk about interconnect 'cause it's really wonky and really technical and not that sexy, but at the end of the day it's incredibly important exactly. To the other points that were being raised like mark raised, for example, about getting that compute closer to where the data is and that's where again, a diversity of chip architectures help and exactly to your last comment there Dave, putting that ability in an edge device is really at the cutting edge of what we're seeing on a semiconductor design and the ability to, for example, maybe it's an FPGA, maybe it's a dedicated AI chip. It's another kind of chip architecture that's being created to do that inferencing on the edge. Because again, it's that the cost and the challenges of moving lots of data, whether it be from say a smartphone to a cloud-based application or whether it be from a private network to a cloud or any other kinds of permutations we can think of really matters. And the other thing is we're tackling bigger problems. So architecturally, not even just architecturally within a system, but when we think about DPUs and the sort of the east west data center movement conversation that we hear Nvidia and others talk about, it's about combining multiple sets of these systems to function together more efficiently again with even bigger sets of data. So really is about tackling where the processing is needed, having the interconnect and the ability to get where the data you need to the right place at the right time. And because those needs are diversifying, we're just going to continue to see an explosion of different choices and options, which is going to make hardware even more essential I would argue than it is today. And so I think what we're going to see not only does hardware matter, it's going to matter even more in the future than it does now. >> Great, yeah. Great discussion, guys. I want to bring Keith back into the conversation here. Keith, if your main expertise in tech is provisioning LUNs, you probably you want to look for another job. So maybe clearly hardware matters, but with software defined everything, do people with hardware expertise matter outside of for instance, component manufacturers or cloud companies? I mean, VMware certainly changed the dynamic in servers. Dell just spun off its most profitable asset and VMware. So it obviously thinks hardware can stand alone. How does an enterprise architect view the shift to software defined hyperscale cloud and how do you see the shifting demand for skills in enterprise IT? >> So I love the question and I'll take a different view of it. If you're a data analyst and your primary value add is that you do ETL transformation, talk to a CDO, a chief data officer over midsize bank a little bit ago. He said 80% of his data scientists' time is done on ETL. Super not value ad. He wants his data scientists to do data science work. Chances are if your only value is that you do LUN provisioning, then you probably don't have a job now. The technologies have gotten much more intelligent. As infrastructure pros, we want to give infrastructure pros the opportunities to shine and I think the software defined nature and the automation that we're seeing vendors undertake, whether it's Dell, HP, Lenovo take your pick that Pure Storage, NetApp that are doing the automation and the ML needed so that these practitioners don't spend 80% of their time doing LUN provisioning and focusing on their true expertise, which is ensuring that data is stored. Data is retrievable, data's protected, et cetera. I think the shift is to focus on that part of the job that you're ensuring no matter where the data's at, because as my data is spread across the enterprise hybrid different types, you know, Dave, you talk about the super cloud a lot. If my data is in the super cloud, protecting that data and securing that data becomes much more complicated when than when it was me just procuring or provisioning LUNs. So when you say, where should the shift be, or look be, you know, focusing on the real value, which is making sure that customers can access data, can recover data, can get data at performance levels that they need within the price point. They need to get at those datasets and where they need it. We talked a lot about where they need out. One last point about this interconnecting. I have this vision and I think we all do of composable infrastructure. This idea that scaled out does not solve every problem. The cloud can give me infinite scale out. Sometimes I just need a single OS with 64 terabytes of RAM and 204 GPUs or GPU instances that single OS does not exist today. And the opportunity is to create composable infrastructure so that we solve a lot of these problems that just simply don't scale out. >> You know, wow. So many interesting points there. I had just interviewed Zhamak Dehghani, who's the founder of Data Mesh last week. And she made a really interesting point. She said, "Think about, we have separate stacks. "We have an application stack and we have "a data pipeline stack and the transaction systems, "the transaction database, we extract data from that," to your point, "We ETL it in, you know, it takes forever. "And then we have this separate sort of data stack." If we're going to inject more intelligence and data and AI into applications, those two stacks, her contention is they have to come together. And when you think about, you know, super cloud bringing compute to data, that was what Haduck was supposed to be. It ended up all sort of going into a central location, but it's almost a rhetorical question. I mean, it seems that that necessitates new thinking around hardware architectures as it kind of everything's the edge. And the other point is to your point, Keith, it's really hard to secure that. So when you can think about offloads, right, you've heard the stats, you know, Nvidia talks about it. Broadcom talks about it that, you know, that 30%, 25 to 30% of the CPU cycles are wasted on doing things like storage offloads, or networking or security. It seems like maybe Zeus you have a comment on this. It seems like new architectures need to come other to support, you know, all of that stuff that Keith and I just dispute. >> Yeah, and by the way, I do want to Keith, the question you just asked. Keith, it's the point I made at the beginning too about engineers do need to be more software-centric, right? They do need to have better software skills. In fact, I remember talking to Cisco about this last year when they surveyed their engineer base, only about a third of 'em had ever made an API call, which you know that that kind of shows this big skillset change, you know, that has to come. But on the point of architectures, I think the big change here is edge because it brings in distributed compute models. Historically, when you think about compute, even with multi-cloud, we never really had multi-cloud. We'd use multiple centralized clouds, but compute was always centralized, right? It was in a branch office, in a data center, in a cloud. With edge what we creates is the rise of distributed computing where we'll have an application that actually accesses different resources and at different edge locations. And I think Marc, you were talking about this, like the edge could be in your IoT device. It could be your campus edge. It could be cellular edge, it could be your car, right? And so we need to start thinkin' about how our applications interact with all those different parts of that edge ecosystem, you know, to create a single experience. The consumer apps, a lot of consumer apps largely works that way. If you think of like app like Uber, right? It pulls in information from all kinds of different edge application, edge services. And, you know, it creates pretty cool experience. We're just starting to get to that point in the business world now. There's a lot of security implications and things like that, but I do think it drives more architectural decisions to be made about how I deploy what data where and where I do my processing, where I do my AI and things like that. It actually makes the world more complicated. In some ways we can do so much more with it, but I think it does drive us more towards turnkey systems, at least initially in order to, you know, ensure performance and security. >> Right. Marc, I wanted to go to you. You had indicated to me that you wanted to chat about this a little bit. You've written quite a bit about the integration of hardware and software. You know, we've watched Oracle's move from, you know, buying Sun and then basically using that in a highly differentiated approach. Engineered systems. What's your take on all that? I know you also have some thoughts on the shift from CapEx to OPEX chime in on that. >> Sure. When you look at it, there are advantages to having one vendor who has the software and hardware. They can synergistically make them work together that you can't do in a commodity basis. If you own the software and somebody else has the hardware, I'll give you an example would be Oracle. As you talked about with their exit data platform, they literally are leveraging microcode in the Intel chips. And now in AMD chips and all the way down to Optane, they make basically AMD database servers work with Optane memory PMM in their storage systems, not MVME, SSD PMM. I'm talking about the cards itself. So there are advantages you can take advantage of if you own the stack, as you were putting out earlier, Dave, of both the software and the hardware. Okay, that's great. But on the other side of that, that tends to give you better performance, but it tends to cost a little more. On the commodity side it costs less but you get less performance. What Zeus had said earlier, it depends where you're running your application. How much performance do you need? What kind of performance do you need? One of the things about moving to the edge and I'll get to the OPEX CapEx in a second. One of the issues about moving to the edge is what kind of processing do you need? If you're running in a CCTV camera on top of a traffic light, how much power do you have? How much cooling do you have that you can run this? And more importantly, do you have to take the data you're getting and move it somewhere else and get processed and the information is sent back? I mean, there are companies out there like Brain Chip that have developed AI chips that can run on the sensor without a CPU. Without any additional memory. So, I mean, there's innovation going on to deal with this question of data movement. There's companies out there like Tachyon that are combining GPUs, CPUs, and DPUs in a single chip. Think of it as super composable architecture. They're looking at being able to do more in less. On the OPEX and CapEx issue. >> Hold that thought, hold that thought on the OPEX CapEx, 'cause we're running out of time and maybe you can wrap on that. I just wanted to pick up on something you said about the integrated hardware software. I mean, other than the fact that, you know, Michael Dell unlocked whatever $40 billion for himself and Silverlake, I was always a fan of a spin in with VMware basically become the Oracle of hardware. Now I know it would've been a nightmare for the ecosystem and culturally, they probably would've had a VMware brain drain, but what does anybody have any thoughts on that as a sort of a thought exercise? I was always a fan of that on paper. >> I got to eat a little crow. I did not like the Dale VMware acquisition for the industry in general. And I think it hurt the industry in general, HPE, Cisco walked away a little bit from that VMware relationship. But when I talked to customers, they loved it. You know, I got to be honest. They absolutely loved the integration. The VxRail, VxRack solution exploded. Nutanix became kind of a afterthought when it came to competing. So that spin in, when we talk about the ability to innovate and the ability to create solutions that you just simply can't create because you don't have the full stack. Dell was well positioned to do that with a potential span in of VMware. >> Yeah, we're going to be-- Go ahead please. >> Yeah, in fact, I think you're right, Keith, it was terrible for the industry. Great for Dell. And I remember talking to Chad Sakac when he was running, you know, VCE, which became Rack and Rail, their ability to stay in lockstep with what VMware was doing. What was the number one workload running on hyperconverged forever? It was VMware. So their ability to remain in lockstep with VMware gave them a huge competitive advantage. And Dell came out of nowhere in, you know, the hyper-converged market and just started taking share because of that relationship. So, you know, this sort I guess it's, you know, from a Dell perspective I thought it gave them a pretty big advantage that they didn't really exploit across their other properties, right? Networking and service and things like they could have given the dominance that VMware had. From an industry perspective though, I do think it's better to have them be coupled. So. >> I agree. I mean, they could. I think they could have dominated in super cloud and maybe they would become the next Oracle where everybody hates 'em, but they kick ass. But guys. We got to wrap up here. And so what I'm going to ask you is I'm going to go and reverse the order this time, you know, big takeaways from this conversation today, which guys by the way, I can't thank you enough phenomenal insights, but big takeaways, any final thoughts, any research that you're working on that you want highlight or you know, what you look for in the future? Try to keep it brief. We'll go in reverse order. Maybe Marc, you could start us off please. >> Sure, on the research front, I'm working on a total cost of ownership of an integrated database analytics machine learning versus separate services. On the other aspect that I would wanted to chat about real quickly, OPEX versus CapEx, the cloud changed the market perception of hardware in the sense that you can use hardware or buy hardware like you do software. As you use it, pay for what you use in arrears. The good thing about that is you're only paying for what you use, period. You're not for what you don't use. I mean, it's compute time, everything else. The bad side about that is you have no predictability in your bill. It's elastic, but every user I've talked to says every month it's different. And from a budgeting perspective, it's very hard to set up your budget year to year and it's causing a lot of nightmares. So it's just something to be aware of. From a CapEx perspective, you have no more CapEx if you're using that kind of base system but you lose a certain amount of control as well. So ultimately that's some of the issues. But my biggest point, my biggest takeaway from this is the biggest issue right now that everybody I talk to in some shape or form it comes down to data movement whether it be ETLs that you talked about Keith or other aspects moving it between hybrid locations, moving it within a system, moving it within a chip. All those are key issues. >> Great, thank you. Okay, CTO advisor, give us your final thoughts. >> All right. Really, really great commentary. Again, I'm going to point back to us taking the walk that our customers are taking, which is trying to do this conversion of all primary data center to a hybrid of which I have this hard earned philosophy that enterprise IT is additive. When we add a service, we rarely subtract a service. So the landscape and service area what we support has to grow. So our research focuses on taking that walk. We are taking a monolithic application, decomposing that to containers, and putting that in a public cloud, and connecting that back private data center and telling that story and walking that walk with our customers. This has been a super enlightening panel. >> Yeah, thank you. Real, real different world coming. David Nicholson, please. >> You know, it really hearkens back to the beginning of the conversation. You talked about momentum in the direction of cloud. I'm sort of spending my time under the hood, getting grease under my fingernails, focusing on where still the lions share of spend will be in coming years, which is OnPrem. And then of course, obviously data center infrastructure for cloud but really diving under the covers and helping folks understand the ramifications of movement between generations of CPU architecture. I know we all know Sapphire Rapids pushed into the future. When's the next Intel release coming? Who knows? We think, you know, in 2023. There have been a lot of people standing by from a practitioner's standpoint asking, well, what do I do between now and then? Does it make sense to upgrade bits and pieces of hardware or go from a last generation to a current generation when we know the next generation is coming? And so I've been very, very focused on looking at how these connectivity components like rate controllers and NICs. I know it's not as sexy as talking about cloud but just how these opponents completely change the game and actually can justify movement from say a 14th-generation architecture to a 15th-generation architecture today, even though gen 16 is coming, let's say 12 months from now. So that's where I am. Keep my phone number in the Rolodex. I literally reference Rolodex intentionally because like I said, I'm in there under the hood and it's not as sexy. But yeah, so that's what I'm focused on Dave. >> Well, you know, to paraphrase it, maybe derivative paraphrase of, you know, Larry Ellison's rant on what is cloud? It's operating systems and databases, et cetera. Rate controllers and NICs live inside of clouds. All right. You know, one of the reasons I love working with you guys is 'cause have such a wide observation space and Zeus Kerravala you, of all people, you know you have your fingers in a lot of pies. So give us your final thoughts. >> Yeah, I'm not a propeller heady as my chip counterparts here. (all laugh) So, you know, I look at the world a little differently and a lot of my research I'm doing now is the impact that distributed computing has on customer employee experiences, right? You talk to every business and how the experiences they deliver to their customers is really differentiating how they go to market. And so they're looking at these different ways of feeding up data and analytics and things like that in different places. And I think this is going to have a really profound impact on enterprise IT architecture. We're putting more data, more compute in more places all the way down to like little micro edges and retailers and things like that. And so we need the variety. Historically, if you think back to when I was in IT you know, pre-Y2K, we didn't have a lot of choice in things, right? We had a server that was rack mount or standup, right? And there wasn't a whole lot of, you know, differences in choice. But today we can deploy, you know, these really high-performance compute systems on little blades inside servers or inside, you know, autonomous vehicles and things. I think the world from here gets... You know, just the choice of what we have and the way hardware and software works together is really going to, I think, change the world the way we do things. We're already seeing that, like I said, in the consumer world, right? There's so many things you can do from, you know, smart home perspective, you know, natural language processing, stuff like that. And it's starting to hit businesses now. So just wait and watch the next five years. >> Yeah, totally. The computing power at the edge is just going to be mind blowing. >> It's unbelievable what you can do at the edge. >> Yeah, yeah. Hey Z, I just want to say that we know you're not a propeller head and I for one would like to thank you for having your master's thesis hanging on the wall behind you 'cause we know that you studied basket weaving. >> I was actually a physics math major, so. >> Good man. Another math major. All right, Bob O'Donnell, you're going to bring us home. I mean, we've seen the importance of semiconductors and silicon in our everyday lives, but your last thoughts please. >> Sure and just to clarify, by the way I was a great books major and this was actually for my final paper. And so I was like philosophy and all that kind of stuff and literature but I still somehow got into tech. Look, it's been a great conversation and I want to pick up a little bit on a comment Zeus made, which is this it's the combination of the hardware and the software and coming together and the manner with which that needs to happen, I think is critically important. And the other thing is because of the diversity of the chip architectures and all those different pieces and elements, it's going to be how software tools evolve to adapt to that new world. So I look at things like what Intel's trying to do with oneAPI. You know, what Nvidia has done with CUDA. What other platform companies are trying to create tools that allow them to leverage the hardware, but also embrace the variety of hardware that is there. And so as those software development environments and software development tools evolve to take advantage of these new capabilities, that's going to open up a lot of interesting opportunities that can leverage all these new chip architectures. That can leverage all these new interconnects. That can leverage all these new system architectures and figure out ways to make that all happen, I think is going to be critically important. And then finally, I'll mention the research I'm actually currently working on is on private 5g and how companies are thinking about deploying private 5g and the potential for edge applications for that. So I'm doing a survey of several hundred us companies as we speak and really looking forward to getting that done in the next couple of weeks. >> Yeah, look forward to that. Guys, again, thank you so much. Outstanding conversation. Anybody going to be at Dell tech world in a couple of weeks? Bob's going to be there. Dave Nicholson. Well drinks on me and guys I really can't thank you enough for the insights and your participation today. Really appreciate it. Okay, and thank you for watching this special power panel episode of theCube Insights powered by ETR. Remember we publish each week on Siliconangle.com and wikibon.com. All these episodes they're available as podcasts. DM me or any of these guys. I'm at DVellante. You can email me at David.Vellante@siliconangle.com. Check out etr.ai for all the data. This is Dave Vellante. We'll see you next time. (upbeat music)

>> From theCUBE studios in Palo Alto, in Boston, bringing you data driven insights from theCUBE and ETR. This is Breaking Analysis with Dave Vollante. >> The rise of Kubernetes came about through a combination of forces that were, in hindsight, quite a long shot. Amazon's dominance created momentum for Cloud native application development, and the need for newer and simpler experiences, beyond just easily spinning up computer as a service. This wave crashed into innovations from a startup named Docker, and a reluctant competitor in Google, that needed a way to change the game on Amazon and the Cloud. Now, add in the effort of Red Hat, which needed a new path beyond Enterprise Linux, and oh, by the way, it was just about to commit to a path of a Kubernetes alternative for OpenShift and figure out a governance structure to hurt all the cats and the ecosystem and you get the remarkable ascendancy of Kubernetes. Hello and welcome to this week's Wikibon CUBE Insights powered by ETR. In this breaking analysis, we tapped the back stories of a new documentary that explains the improbable events that led to the creation of Kubernetes. We'll share some new survey data from ETR and commentary from the many early the innovators who came on theCUBE during the exciting period since the founding of Docker in 2013, which marked a new era in computing, because we're talking about Kubernetes and developers today, the hoodie is on. And there's a new two part documentary that I just referenced, it's out and it was produced by Honeypot on Kubernetes, part one and part two, tells a story of how Kubernetes came to prominence and many of the players that made it happen. Now, a lot of these players, including Tim Hawkin Kelsey Hightower, Craig McLuckie, Joe Beda, Brian Grant Solomon Hykes, Jerry Chen and others came on theCUBE during formative years of containers going mainstream and the rise of Kubernetes. John Furrier and Stu Miniman were at the many shows we covered back then and they unpacked what was happening at the time. We'll share the commentary from the guests that they interviewed and try to add some context. Now let's start with the concept of developer defined structure, DDI. Jerry Chen was at VMware and he could see the trends that were evolving. He left VMware to become a venture capitalist at Greylock. Docker was his first investment. And he saw the future this way. >> What happens is when you define infrastructure software you can program it. You make it portable. And that the beauty of this cloud wave what I call DDI's. Now, to your point is every piece of infrastructure from storage, networking, to compute has an API, right? And, and AWS there was an early trend where S3, EBS, EC2 had API. >> As building blocks too. >> As building blocks, exactly. >> Not monolithic. >> Monolithic building blocks every little building bone block has it own API and just like Docker really is the API for this unit of the cloud enables developers to define how they want to build their applications, how to network them know as Wills talked about, and how you want to secure them and how you want to store them. And so the beauty of this generation is now developers are determining how apps are built, not just at the, you know, end user, you know, iPhone app layer the data layer, the storage layer, the networking layer. So every single level is being disrupted by this concept of a DDI and where, how you build use and actually purchase IT has changed. And you're seeing the incumbent vendors like Oracle, VMware Microsoft try to react but you're seeing a whole new generation startup. >> Now what Jerry was explaining is that this new abstraction layer that was being built here's some ETR data that quantifies that and shows where we are today. The chart shows net score or spending momentum on the vertical axis and market share which represents the pervasiveness in the survey set. So as Jerry and the innovators who created Docker saw the cloud was becoming prominent and you can see it still has spending velocity that's elevated above that 40% red line which is kind of a magic mark of momentum. And of course, it's very prominent on the X axis as well. And you see the low level infrastructure virtualization and that even floats above servers and storage and networking right. Back in 2013 the conversation with VMware. And by the way, I remember having this conversation deeply at the time with Chad Sakac was we're going to make this low level infrastructure invisible, and we intend to make virtualization invisible, IE simplified. And so, you see above the two arrows there related to containers, container orchestration and container platforms, which are abstraction layers and services above the underlying VMs and hardware. And you can see the momentum that they have right there with the cloud and AI and RPA. So you had these forces that Jerry described that were taking shape, and this picture kind of summarizes how they came together to form Kubernetes. And the upper left, Of course you see AWS and we inserted a picture from a post we did, right after the first reinvent in 2012, it was obvious to us at the time that the cloud gorilla was AWS and had all this momentum. Now, Solomon Hykes, the founder of Docker, you see there in the upper right. He saw the need to simplify the packaging of applications for cloud developers. Here's how he described it. Back in 2014 in theCUBE with John Furrier >> Container is a unit of deployment, right? It's the format in which you package your application all the files, all the executables libraries all the dependencies in one thing that you can move to any server and deploy in a repeatable way. So it's similar to how you would run an iOS app on an iPhone, for example. >> A Docker at the time was a 30% company and it just changed its name from .cloud. And back to the diagram you have Google with a red question mark. So why would you need more than what Docker had created. Craig McLuckie, who was a product manager at Google back then explains the need for yet another abstraction. >> We created the strong separation between infrastructure operations and application operations. And so, Docker has created a portable framework to take it, basically a binary and run it anywhere which is an amazing capability, but that's not enough. You also need to be able to manage that with a framework that can run anywhere. And so, the union of Docker and Kubernetes provides this framework where you're completely abstracted from the underlying infrastructure. You could use VMware, you could use Red Hat open stack deployment. You could run on another major cloud provider like rec. >> Now Google had this huge cloud infrastructure but no commercial cloud business compete with AWS. At least not one that was taken seriously at the time. So it needed a way to change the game. And it had this thing called Google Borg, which is a container management system and scheduler and Google looked at what was happening with virtualization and said, you know, we obviously could do better Joe Beda, who was with Google at the time explains their mindset going back to the beginning. >> Craig and I started up Google compute engine VM as a service. And the odd thing to recognize is that, nobody who had been in Google for a long time thought that there was anything to this VM stuff, right? Cause Google had been on containers for so long. That was their mindset board was the way that stuff was actually deployed. So, you know, my boss at the time, who's now at Cloudera booted up a VM for the first time, and anybody in the outside world be like, Hey, that's really cool. And his response was like, well now what? Right. You're sitting at a prompt. Like that's not super interesting. How do I run my app? Right. Which is, that's what everybody's been struggling with, with cloud is not how do I get a VM up? How do I actually run my code? >> Okay. So Google never really did virtualization. They were looking at the market and said, okay what can we do to make Google relevant in cloud. Here's Eric Brewer from Google. Talking on theCUBE about Google's thought process at the time. >> One interest things about Google is it essentially makes no use of virtual machines internally. And that's because Google started in 1998 which is the same year that VMware started was kind of brought the modern virtual machine to bear. And so Google infrastructure tends to be built really on kind of classic Unix processes and communication. And so scaling that up, you get a system that works a lot with just processes and containers. So kind of when I saw containers come along with Docker, we said, well, that's a good model for us. And we can take what we know internally which was called Borg a big scheduler. And we can turn that into Kubernetes and we'll open source it. And suddenly we have kind of a cloud version of Google that works the way we would like it to work. >> Now, Eric Brewer gave us the bumper sticker version of the story there. What he reveals in the documentary that I referenced earlier is that initially Google was like, why would we open source our secret sauce to help competitors? So folks like Tim Hockin and Brian Grant who were on the original Kubernetes team, went to management and pressed hard to convince them to bless open sourcing Kubernetes. Here's Hockin's explanation. >> When Docker landed, we saw the community building and building and building. I mean, that was a snowball of its own, right? And as it caught on we realized we know what this is going to we know once you embrace the Docker mindset that you very quickly need something to manage all of your Docker nodes, once you get beyond two or three of them, and we know how to build that, right? We got a ton of experience here. Like we went to our leadership and said, you know, please this is going to happen with us or without us. And I think it, the world would be better if we helped. >> So the open source strategy became more compelling as they studied the problem because it gave Google a way to neutralize AWS's advantage because with containers you could develop on AWS for example, and then run the application anywhere like Google's cloud. So it not only gave developers a path off of AWS. If Google could develop a strong service on GCP they could monetize that play. Now, focus your attention back to the diagram which shows this smiling, Alex Polvi from Core OS which was acquired by Red Hat in 2018. And he saw the need to bring Linux into the cloud. I mean, after all Linux was powering the internet it was the OS for enterprise apps. And he saw the need to extend its path into the cloud. Now here's how he described it at an OpenStack event in 2015. >> Similar to what happened with Linux. Like yes, there is still need for Linux and Windows and other OSs out there. But by and large on production, web infrastructure it's all Linux now. And you were able to get onto one stack. And how were you able to do that? It was, it was by having a truly open consistent API and a commitment into not breaking APIs and, so on. That allowed Linux to really become ubiquitous in the data center. Yes, there are other OSs, but Linux buy in large for production infrastructure, what is being used. And I think you'll see a similar phenomenon happen for this next level up cause we're treating the whole data center as a computer instead of trading one in visual instance is just the computer. And that's the stuff that Kubernetes to me and someone is doing. And I think there will be one that shakes out over time and we believe that'll be Kubernetes. >> So Alex saw the need for a dominant container orchestration platform. And you heard him, they made the right bet. It would be Kubernetes. Now Red Hat, Red Hat is been around since 1993. So it has a lot of on-prem. So it needed a future path to the cloud. So they rang up Google and said, hey. What do you guys have going on in this space? So Google, was kind of non-committal, but it did expose that they were thinking about doing something that was you know, pre Kubernetes. It was before it was called Kubernetes. But hey, we have this thing and we're thinking about open sourcing it, but Google's internal debates, and you know, some of the arm twisting from the engine engineers, it was taking too long. So Red Hat said, well, screw it. We got to move forward with OpenShift. So we'll do what Apple and Airbnb and Heroku are doing and we'll build on an alternative. And so they were ready to go with Mesos which was very much more sophisticated than Kubernetes at the time and much more mature, but then Google the last minute said, hey, let's do this. So Clayton Coleman with Red Hat, he was an architect. And he leaned in right away. He was one of the first outside committers outside of Google. But you still led these competing forces in the market. And internally there were debates. Do we go with simplicity or do we go with system scale? And Hen Goldberg from Google explains why they focus first on simplicity in getting that right. >> We had to defend of why we are only supporting 100 nodes in the first release of Kubernetes. And they explained that they know how to build for scale. They've done that. They know how to do it, but realistically most of users don't need large clusters. So why create this complexity? >> So Goldberg explains that rather than competing right away with say Mesos or Docker swarm, which were far more baked they made the bet to keep it simple and go for adoption and ubiquity, which obviously turned out to be the right choice. But the last piece of the puzzle was governance. Now Google promised to open source Kubernetes but when it started to open up to contributors outside of Google, the code was still controlled by Google and developers had to sign Google paper that said Google could still do whatever it wanted. It could sub license, et cetera. So Google had to pass the Baton to an independent entity and that's how CNCF was started. Kubernetes was its first project. And let's listen to Chris Aniszczyk of the CNCF explain >> CNCF is all about providing a neutral home for cloud native technology. And, you know, it's been about almost two years since our first board meeting. And the idea was, you know there's a certain set of technology out there, you know that are essentially microservice based that like live in containers that are essentially orchestrated by some process, right? That's essentially what we mean when we say cloud native right. And CNCF was seated with Kubernetes as its first project. And you know, as, as we've seen over the last couple years Kubernetes has grown, you know, quite well they have a large community a diverse con you know, contributor base and have done, you know, kind of extremely well. They're one of actually the fastest, you know highest velocity, open source projects out there, maybe. >> Okay. So this is how we got to where we are today. This ETR data shows container orchestration offerings. It's the same X Y graph that we showed earlier. And you can see where Kubernetes lands not we're standing that Kubernetes not a company but respondents, you know, they doing Kubernetes. They maybe don't know, you know, whose platform and it's hard with the ETR taxon economy as a fuzzy and survey data because Kubernetes is increasingly becoming embedded into cloud platforms. And IT pros, they may not even know which one specifically. And so the reason we've linked these two platforms Kubernetes and Red Hat OpenShift is because OpenShift right now is a dominant revenue player in the space and is increasingly popular PaaS layer. Yeah. You could download Kubernetes and do what you want with it. But if you're really building enterprise apps you're going to need support. And that's where OpenShift comes in. And there's not much data on this but we did find this chart from AMDA which show was the container software market, whatever that really is. And Red Hat has got 50% of it. This is revenue. And, you know, we know the muscle of IBM is behind OpenShift. So there's really not hard to believe. Now we've got some other data points that show how Kubernetes is becoming less visible and more embedded under of the hood. If you will, as this chart shows this is data from CNCF's annual survey they had 1800 respondents here, and the data showed that 79% of respondents use certified Kubernetes hosted platforms. Amazon elastic container service for Kubernetes was the most prominent 39% followed by Azure Kubernetes service at 23% in Azure AKS engine at 17%. With Google's GKE, Google Kubernetes engine behind those three. Now. You have to ask, okay, Google. Google's management Initially they had concerns. You know, why are we open sourcing such a key technology? And the premise was, it would level the playing field. And for sure it has, but you have to ask has it driven the monetization Google was after? And I would've to say no, it probably didn't. But think about where Google would've been. If it hadn't open source Kubernetes how relevant would it be in the cloud discussion. Despite its distant third position behind AWS and Microsoft or even fourth, if you include Alibaba without Kubernetes Google probably would be much less prominent or possibly even irrelevant in cloud, enterprise cloud. Okay. Let's wrap up with some comments on the state of Kubernetes and maybe a thought or two about, you know, where we're headed. So look, no shocker Kubernetes for all its improbable beginning has gone mainstream in the past year or so. We're seeing much more maturity and support for state full workloads and big ecosystem support with respect to better security and continued simplification. But you know, it's still pretty complex. It's getting better, but it's not VMware level of maturity. For example, of course. Now adoption has always been strong for Kubernetes, for cloud native companies who start with containers on day one, but we're seeing many more. IT organizations adopting Kubernetes as it matures. It's interesting, you know, Docker set out to be the system of the cloud and Kubernetes has really kind of become that. Docker desktop is where Docker's action really is. That's where Docker is thriving. It sold off Docker swarm to Mirantis has made some tweaks. Docker has made some tweaks to its licensing model to be able to continue to evolve its its business. To hear more about that at DockerCon. And as we said, years ago we expected Kubernetes to become less visible Stu Miniman and I talked about this in one of our predictions post and really become more embedded into other platforms. And that's exactly what's happening here but it's still complicated. Remember, remember the... Go back to the early and mid cycle of VMware understanding things like application performance you needed folks in lab coats to really remediate problems and dig in and peel the onion and scale the system you know, and in some ways you're seeing that dynamic repeated with Kubernetes, security performance scale recovery, when something goes wrong all are made more difficult by the rapid pace at which the ecosystem is evolving Kubernetes. But it's definitely headed in the right direction. So what's next for Kubernetes we would expect further simplification and you're going to see more abstractions. We live in this world of almost perpetual abstractions. Now, as Kubernetes improves support from multi cluster it will be begin to treat those clusters as a unified group. So kind of abstracting multiple clusters and treating them as, as one to be managed together. And this is going to create a lot of ecosystem focus on scaling globally. Okay, once you do that, you're going to have to worry about latency and then you're going to have to keep pace with security as you expand the, the threat area. And then of course recovery what happens when something goes wrong, more complexity, the harder it is to recover and that's going to require new services to share resources across clusters. So look for that. You also should expect more automation. It's going to be driven by the host cloud providers as Kubernetes supports more state full applications and begins to extend its cluster management. Cloud providers will inject as much automation as possible into the system. Now and finally, as these capabilities mature we would expect to see better support for data intensive workloads like, AI and Machine learning and inference. Schedule with these workloads becomes harder because they're so resource intensive and performance management becomes more complex. So that's going to have to evolve. I mean, frankly, many of the things that Kubernetes team way back when, you know they back burn it early on, for example, you saw in Docker swarm or Mesos they're going to start to enter the scene now with Kubernetes as they start to sort of prioritize some of those more complex functions. Now, the last thing I'll ask you to think about is what's next beyond Kubernetes, you know this isn't it right with serverless and IOT in the edge and new data, heavy workloads there's something that's going to disrupt Kubernetes. So in that, by the way, in that CNCF survey nearly 40% of respondents were using serverless and that's going to keep growing. So how is that going to change the development model? You know, Andy Jassy once famously said that if they had to start over with Amazon retail, they'd start with serverless. So let's keep an eye on the horizon to see what's coming next. All right, that's it for now. I want to thank my colleagues, Stephanie Chan who helped research this week's topics and Alex Myerson on the production team, who also manages the breaking analysis podcast, Kristin Martin and Cheryl Knight help get the word out on socials, so thanks to all of you. Remember these episodes, they're all available as podcasts wherever you listen, just search breaking analysis podcast. Don't forget to check out ETR website @etr.ai. We'll also publish. We publish a full report every week on wikibon.com and Silicon angle.com. You can get in touch with me, email me directly david.villane@Siliconangle.com or DM me at D Vollante. You can comment on our LinkedIn post. This is Dave Vollante for theCUBE insights powered by ETR. Have a great week, everybody. Thanks for watching. Stay safe, be well. And we'll see you next time. (upbeat music)

>> Announcer: Live from Las Vegas, it's the Cube. Covering Dell Technologies World 2018. Brought to you by Dell EMC, and its ecosystem partners. >> Welcome back to SiliconANGLE media's coverage of Dell Technologies World 2018. I'm Stu Miniman here with my cohost Keith Townsend, happy to welcome back to the program Tom Burns, who's the SVP of Networking and Solutions at Dell EMC. Tom, great to see ya. >> Great to see you guys as well. Good to see you again. >> All right, so I feel like one of those CNBC guys. It's like, Tom, I remember back when Force10 was acquired by Dell and all the various pieces that have gone on and converged in infrastructure, but of course with the merger, you've gotten some new pieces to your toy chest. >> Tom: That's correct. >> So maybe give us the update first as to what's under your purview. >> Right, right, so I continue to support and manage the entire global networking business on behalf of Dell EMC, and then recently I picked up what we called our converged infrastructure business or the VxBlock, Vscale business. And I continue also to manage what we call Enterprise Infrastructure, which is basically any time our customers want to extend the life of their infrastructure around memory, storage, optics, and so forth. We support them with Dell EMC certified parts, and then we add to that some third-party componentry around rack power and cooling, software, Cumulus, Big Switch, things like that. Riverbed, Silver Peak, others. And so with that particular portfolio we also cover what we call the Dell EMC Ready Solutions, both for the service provider, but then also for traditional enterprises as well. >> Yeah, well luckily there's no change in any of those environments. >> Tom: No, no. >> Networking's been static for decades. I mean they threw a product line that I mean last I checked was somewhere in the three to four billion dollar range. With the VxBlock under what you're talking there. >> Yeah it's a so, yeah-- >> Maybe you could talk, what does this mean? 'Cause if I give you your networking guy. >> Right. >> Keith and I are networking guys by background, obviously networking's a piece of this, but give us a little bit of how the sausage is made inside to-- >> Tom: Sure. >> Get to this stuff. >> Well I think when you talk about all these solutions, Cloud, Hybrid Cloud, Public Cloud, when you think about software-defined X, the network is still pretty darn important, right? I often say that if the network's not working, it's going to be a pretty cloudy day. It's not going to connect. And so the fabric continues to remain one of the most critical parts of the solution. So the thought around the VxBlock and moving that in towards the networking team is the importance of the fabric and the capability to scale out and scale up with our customers' workloads and applications. So that's probably the reason primarily the reason. And then we can also look at how we can work very closely with our storage division 'cause that's the key IP component coming from Dell EMC on the block side. And see how we can continue to help our customers solve their problems when it comes to this not your do-it-yourself but do-it-for-me environment. >> All right, I know Keith wants to jump in, but one just kind of high-level question for you. I look at networking, we've really been talking about disaggregation of what's going on. It's really about disaggregated systems. And then you've got convergence, and there's other parts of the group that have hyper convergence. How do you square the circle on those two trends and how do those go together? >> Well, I think it's pretty similar on whether you go hyper converge, converge, or do-it-yourself, you build your own block so to speak. There's a set of buyers that want everything to be done for them. They want to buy the entire stack, they want it pre-tested, they want it certified, they want it supported. And then there's a set of customers that want to do it themselves. And that's where we see this opportunity around disaggregation. So we see it primarily in hyperscale and Cloud, but we're seeing it more and more in large enterprise, medium enterprise, particular verticals where customers are in essence looking for some level of agility or capability to interchange their solutions by a particular vendor or solutions that are coming from the same vendor but might be a different IP as an example. And I'm really proud of the fact that Dell EMC really kicked off this disaggregation of the hardware and software and networking. Some 4 1/2 years ago. Now you see some of the, let's say, larger industry players starting to follow suit. And they're starting to disaggregate their software as well. >> Yeah, I would have said just the commonality between those two seemingly opposed trends it's scale. >> Right. >> It's how do customers really help scale these environments? >> Exactly, exactly. It depends a lot around the customer environment and what kind of skill sets do they have. Are they willing to help go through some of that do-it-yourself type of process. Obviously Dell EMC services is there to help them in those particular cases. But we kind of have this buying conundrum of build versus buy. I think my old friend, Chad Sakac, used to say, there's different types of customers that want a VxRail or build-it-themselves, or they want a VxBlock. We see the same thing happen in a networking. There's those customers that want disaggregated hardware and software, and in some cases even disaggregated software. Putting those protocols and features on the switch that they actually use in the data center. Rather than buying a full proprietary stack, well we continue to build the full stack for a select number of customers as well because that's important to that particular sector. >> So again, Tom, two very different ends of the spectrum. I was at ONS a couple of months ago, talked to the team. Dell is a huge sponsor of the Open Source community. And I don't think many people know that. Can you talk about the Open Source relationship or the relationship that Dell Networking has with the Open Source community? >> Absolutely, we first made our venture in Open Source actually with Microsoft in their SONiC work. So they're creating their own network operating software, and we made a joint contribution around the switch abstraction interface, or side. So that was put into the Open Compute Project probably around 3 1/2, maybe four years ago. And that's right after we announced this disaggregation. We then built basically an entire layer of what we call our OS10 base, or what's known in the Linux foundation as OPX. And we contributed that to the OPX or to the Linux foundation, where basically that gives the customer the capability through the software that takes care of all the hardware, creates this switch subtraction interface to gather the intelligence from the ASIC and the silicon, and bringing it to a control plane, which allows APIs to be connected for all your north-bound applications or your general analysis that you want to use, or a disaggregated analysis, what you want to do. So we've been very active in Linux. We've been very active in OCP as well. We're seeing more and more of embracing this opportunity. You've probably seen recently AT&T announced a rather large endeavor to replace tens of thousands of routers with basically white box switches and Open Source software. We really think that this trend is moving, and I'm pretty proud that Dell EMC was a part of getting that all started. >> So that was an awful lot of provider talk. You covered both the provider's base and the enterprise space. Talk to us about where the two kind of meet. You know the provider space, they're creating software, they're embracing OpenStack, they're creating plug-ins for disaggregated networking. And then there's the enterprise. There's opportunity there. Where do you see the enterprise leveraging disaggregation versus the service provider? >> Well, I think it's this move towards software-defined. If you heard in Michael's keynote today, and you'll hear more tomorrow from Jeff Clarke. The whole world is moving to software-defined. It's no longer if, it's when. And I think the opportunity for enterprises that are kind of in that transformation stage, and moving from traditional software-defined, or excuse me, traditional data centers to the software-defined, they could look at disaggregation as an opportunity to give them that agility and capability. In a manner of which they can kind of continue to manage the old world, but move forward into the new world of disaggregation software-defined with the same infrastructure. You know it's not well-known that Dell EMC, we've made our switching now capable of running five different operating softwares. That's dependent upon workloads and use cases, and the customer environment. So, traditional enterprise, they want to look at traditional protocols, traditional features. We give them that capability through our own OS. We can reduce that with OS partners, software coming from some of our OS partners, giving them just the protocols and features that they need for the data center or even out to the edge. And it gives them that flexibility and change. So I think it really comes at this point of when are they going to move towards moving from traditional networking to the next generation of networking. And I'm very happy, I think Dell Technologies is leading the way. >> So I'm wondering if you could expand a little bit about that. When I think about Dell and this show, I mean it is a huge ecosystem. We're sitting right near the Solutions Expo, which will be opening in a little bit, but on the networking side, you've got everything from all the SD-WAN pieces, to all the network operating systems that can sit on top. Maybe, give us kind of the update on the overview, the ecosystem, where Dell wins. >> Yeah, yeah I mean, if you think about 30-something years ago when Michael started the company and Dell started, what was it about. It was really about transforming personal computing, right? It was about taking something that was kind of a traditional proprietary architecture and commoditizing it, making sure it's scalable and supportable. You think of the changes that's occurred now between the mainframe and x86. This is what we think's happening in networking. And at Dell Technologies in the networking area whether it's Dell EMC or to VMware, we're really geared towards this SDX type of market. Virtualization, Layer two, day or three disaggregated switching in the data center. Now SD-WAN with the acquisition of Velocloud by VMware. We're really hoping customers transform at the way networking is being managed, operated, supported to give them much more flexibility and agility in a software-defined market. That being said, we continue to support a multitude of other partners. We have Cumulus, Big Switch, IP infusion, and Pluribus as network operating software alternatives. We have our own, and then we have them as partners. On the SD-WAN area while we lead with Velocloud, we have Silver Peak and we also have Versa Technology, which is getting a lot of upkick in the area. Both in the service provider and in the enterprise space. Huge area of opportunity for enterprises to really lower their cost of connectivity and their branch offices. So, again, we at Dell, we want to have an opinion. We have some leading technologies that we own, but we also partner with some very good, best-of-breed solutions. But being that we're open, and we're disaggregated, and we have an incredible scaling and service department or organization, we have this capability to bring it together for our customers and support them as they go through their IT transformation. >> So, Dell EMC is learning a lot of lessons as you guys start to embrace software-defined. Couple of Dell EMC World's ago, big announcement Chad talked about, ScaleIO, and abstracting, and giving away basically, ScaleIO as a basic solution for free. Then you guys pulled back. And you said, you know what, that's not quite what customers want. They want a packaged solution. So we're talking on one end, total disaggregation and another end, you know what, in a different area of IT, customers seem to want packaged solutions. >> Tom: Yeah. >> Can you talk to the importance of software-defined and packaged solutions? >> Right, it's kind of this theory of appliances, right? Or how is that software going to be packaged? And we give that flexibility in either way. If you think of VxRail or even our vSAN operating or vSAN ready node, it gives that customer the capability to know that we put that software and hardware together, and we tested it, we certified it, most importantly we can support it with kind of one throat to choke, one single call. And so I think the importance for customers are again, am I building it myself or do I want to buy a stack. If I'm somewhere in the middle maybe I'm doing a hybrid or perhaps a Rail type of solution, where it's just compute and storage for the most part. Maybe I'm looking for something different on my networking or connectivity standpoint. But Dell EMC, having the entire portfolio, can help them at any point of the venture or at any part of the solution. So I think that you're absolutely right. The customer buying is varied. You've got those that want everything from a single point, and you got others that are saying I want decision points. I think a lot of the opportunity around the cost savings, mostly from an Opex standpoint are those that are moving towards disaggregated. It doesn't lock 'em in to a single solution. It doesn't get 'em into that long life cycle of when you're going to do changes and upgrades and so forth. This gives them a lot more flexibility and capability. >> Tom, sometimes we have the tendency to get down in the weeds on these products. Especially in the networking space. One of my complaints was, the whole SDN wave, didn't seem to connect necessarily to some of the big businesses' challenges. Heard in the keynote this morning a lot of talk about digital transformation. Bring us up to speed as to how networking plays into that overall story. What you're hearing from customers and if you have any examples we'd love to hear. >> Yeah, no so, I think networking plays a critical part of the IT transformation. I think if you think of the first move in virtualization around compute, then you have the software-defined storage, the networking component was kind of the lagger. It was kind of holding back. And in fact today, I think some analysts say that even when certain software-defined storage implementations occur, interruptions or issues happen in the network. Because the network has then been built and architected for that type of environment. So the companies end up going back and re-looking at how that's done. And companies overall are I think are frustrated with this. They're frustrated with the fact that the network is holding them back from enabling new services, new capabilities, new workloads, moving towards a software-defined environment. And so I think this area again, of disaggregation, of software-defined, of offering choice around software, I think it's doing well, and it's really starting to see an uptick. And the customer experiences as follows. One is, open networking where it's based upon standard commodity-based hardware. It's simply less expensive than proprietary hardware. So they're going to have a little bit of savings from the CapEx standpoint. But because they moved towards this disaggregated model where perhaps they're using one of our third-party software partners that happens to be based in Linux, or even our own OS10 is now based in Linux. Look at that, the tools around configuration and automation are the same as compute. And the same as storage. And so therefore I'm saving on this configuration and automation and so forth. So we have examples such as Verizon that literally not only saves about 30% cost savings on their CapEx, they're saving anywhere between 40 and 50% on their Opex. Why? They can roll out applications much faster. They can make changes to their network much faster. I mean that's the benefit of virtualization and NSX as well, right? Instead of having this decisions of sending a network engineer to a closet to do CLI, down in the dirt as you would say, and reconfigure the switch, a lot of that now has been attracted to a software lever, and getting the company much more capability to make the changes across the fabric, or to segregate it using NSX micro segmentation to make the changes to those users or to that particular environment that needs those changes. So, just the incredible amount of flexibility. I think SDN let's say six, seven years ago, everyone thought it was going to be CapEx. You know, cheaper hardware, cheaper ASICs, et cetera. It's all about Opex. It's around flexibility, agility, common tool sets, better configuration, faster automation. >> So we all have this nirvana idea that we can take our traditional stacks, whether it's pre-packaged CI configurations that's pre-engineered, HCI, SDN, disaggregated networking. Add to that a software layer this magical automation. Can you unpack that for us a little bit? What are you seeing practically whether it's in the server provider perspective or on the enterprise. What are those crucial relationships that Dell EMC is forming with the software industry to bring forth that automation? >> Well obviously we have a very strong relationship with VMware. >> Keith: Right. >> And so you have vRealize and vROps and so forth, and in fact in the new VxBlock 1000, you're going to see a lot of us gearings, a lot of our development towards the vRealize suite, so that helps those customers that are in a VMware environment. We also have a very strong relationship with Red Hat and OpenStack, where we've seen very successful implementations in the service provider space. Those that want to go a little bit more, a little bit more disaggregated, a little bit more open, even it from the storage participation like SAP and so forth. But then obviously we're doing a lot of work with Ansible, Chef, and Puppet, for those that are looking for more of a common open source set of tools across server, compute, networking storage and so forth. So I think the real benefit is kind of looking at it at that 25,000-foot view on how we want to automate. Do you want to go towards containers, do you want to go traditional? What are the tool sets that you've been using in your compute environment, and can those be brought down to the entire stack? >> All right, well Tom Burns, really appreciate catching up with you. I know Keith will be spending a little time at Interop this week too. I know, I'm excited that we have a lot more networking here at this end of the strip also this week. >> Appreciate it. Listen to Pat's talk this afternoon. I think we're going to be hearing even more about Dell Technology's networking. >> All right. Tom Burns, SVP of Networking and Solutions at Dell EMC. I'm Stu Miniman and this is Keith Townsend. Thanks for watching The Cube. (upbeat music)

(upbeat pop music) >> [Narrator] France! It's theCUBE, covering .NEXT Conference 2017 Europe. Brought to you by Nutanix. (upbeat pop music) >> Welcome back, I'm Stu Miniman, and this is theCube. Happy to welcome to the program, first time guest, gonna help me with some analysis of what's been happening here at the show, Keith Humphreys, who is the managing consultant at euroLAN Research. Thanks so much for joining us. >> My pleasure, Stu. >> Alright, so, Keith, you and I were the only analysts at the Vienna show last year, they've grown he analyst program a little bit as, you know, most of us in the community been watching Nutanix for many years. Tell us a little bit about kind of your background, and what specifically you focus on. >> Okay, so, euroLAN is an industry analyst company focused on helping vendors optimize routes to market in Europe. So, we're a channel analyst company founded in '93, in Paris, France, I was employee number five, and we're still about five consultants, and as I say, we're very vendor focused on channels. >> Yeah, well, it goes without saying, in our industry things are changing a lot, but boy, has the channel been changing massively, you know, everything from the impact of service providers to the public cloud. So, let's start kind of at the macro level a little bit. What are some of the big issues? The channels always, you know, we say they're coin operated. Where do they make money, where are they concerned about, what's exciting them these days? >> I think at a macro level what's really exciting, if you look at the book B four B, it describes the risk having gone from corporate back to the vendor. So, before the enterprise used to buy kit, buy stuff, buy products and have to integrate them themselves, take 18 months before they actually got a working product, but in the mean time the vendors had produced the invoice, maybe not even shipped the kit before they could recognize the revenue, now with as-a-service that's totally changed. The risk is gone from the customer, right they way back to the vendor, it's a fascinating point, and the channel's stuck in between here, trying to be the good guys, still trying to integrate that stuff, still trying to produce those solutions, but only getting paid at an annuity revenue model. It's very different. >> Yeah, you know, I was involved in some of the early convergent infrastructure solutions, and you go to some companies and they're like, "We make tons of money racking and stacking and cabling." We're like, "Come on, that's not huge value add, let's help you add more value, get more involved, be more consultative solution-selling and the like." We've only seen that accelerate with the like of hyper converge infrastructure and solutions-as-a-service as you said where sometimes it's just frictionless, just acquire what I need when I need it. How's the channel doing? >> I think the channel's doing okay, but they're in denial, because of this issue. I think if you look at the way Nutanix started as a box provider and now moving to software, some of the channel is really railing against that, and saying, "We still want to do it this way." They're not learning the lesson that they must move to an annuity model basis, because it's a huge business transformation. We jointly run a workshop with IDC to help system integrators make that transition across, and we've only booked through a half a dozen companies for it. They should be knocking our door down to go through this, but they're finding it really hard. >> Alright, so, how's Nutanix doing in the channel? >> So, I think, interestingly, I think it was Chad Sakac of VMware said that they're having to bring out a proof of concept box for vSphere. So they can put that box into customers, so they can try it out. Interesting for a software vendor you're having to package something, so they've gone in that direction. Where as Nutanix are moving in the other direction, going to software only from the box. That's fascinating, but they're trying to drag that channel with them. Are CDW really happy that they're moving to a software-only model? Maybe not. >> Well, look, we've been discussing this week the software-only model, of course, there's still gotta be an appliance somewhere. So, from a channel standpoint, if tomorrow Nutanix says, "Hey, we're only gonna do software and you're gonna do..." does that have a significant impact on the channel, if they now get it if it's a distributor, or some other piece, how much will that impact the channel? >> I think it's going back to the old model of digital days where the channel partner's going back to integrating stuff. Which I think is great news for them, because they can add value, but have they still got the skills? A lot of them have lost those skills, they've been de-franchised or they've de-franchised themselves. >> Yeah, we'll see how that plays out, as to whether it comes in a similar form factor. I don't expect that they're gonna be getting Lego pieces and putting together, it's still mostly gonna be pieces. How 'bout Nutanix's been going a lot of new directions, trying to expand, software-only isn't just about saying, kinda the base stack and AHV, but Zai and calm. Some of these other pieces. Is the channel ready for these kind of things? Does Nutanix have to then do way more of it and the channel's just for filling it? How does that dynamic work? >> I think Nutanix has to go out and create the market. They've got to make end customers aware of this and then the enterprise customers will be asking their channel partners for it so they'll have to get up to speed. You know it's a push and pull model to channel. You can't just push through the channel. I heard someone from Nutanix describe the channel as an extension of their sales force. It's just not. You know computer center's go out and sell computer centers. They don't sell Nutanix. They sell their customer benefit and Nutanix is a small part of that solution. Every project is software based. It's around SAP. It's around Oracle and there's some infrastructure to run it on. It's a small part. >> It's interesting, I got to interview a service provider that has then become a reseller of Nutanix solutions. We sometimes say that service providers are the new channel. How is that dynamic playing out? >> Well, if I was to want infrastructure in our office I wouldn't phone British Telecom for it. (laughs) >> Fair enough. What about, we're talking about the multi cloud world. I've found that there's some systems integrators out there that are offering Azure services, some are engaging AWS has been really good at building out their channel. How's that in Europe these days? How much is the channel engaged in the public cloud? >> We're seeing Amazon with AWS starting to reach out to the channel at long last, with channel programs, channel recruitment. They're not gonna get rich reselling that but they'll get rich by putting the professional services on there. You know, what should I run on here? Is it good for computers? Is it good for scaling? Is it good for additional workloads? They've gotta add professional services but even as we run our workshops we see exactly the same thing. As they move to as-a-service, it might be profitable to a degree but it takes you four or five years to get there. So you've gotta be adding professional services on top of that revenue to maintain it. >> Well, I have to think there's good opportunity there because while there was this promise the future's gonna be simple. Right? Public cloud, it's nice and easy swipe a credit card and good. There's so many features out there. SaaS, anybody's that's used SaaS providers when they really wanna use it there's requirements there. So is the channel stepping up to fill some of that gap or will the Accentures, those kind of consulting come in and take that revenue? >> I think it depends on the company's size. We profiled in our newsletter a small UK company who get digital transformation. This quarter we profiled Accenture. They're both doing the same things, just addressing different parts of the market. I think the other interesting thing is, you mentioned the difficulty, obviously AWS uses its own terminology and it looks very complicated but what I do like is the Nutanix one click based around machine learning. That's really exciting. Sudheesh Nair was just talking about DeepMind's AlphaGo Zero and how it's learned the Chinese Go Program. It self learned that. No one taught that. It actually self learned that. There was an article on the FT which was trying to say this is frightening. It's not frightening if we're gonna move into an IoT age, if we're gonna move into an autonomous car age. We're gonna need software that's written to Sigma Nine not Sigma Six and I think only machines can do that. We're not very good at writing software. >> Keith, what more should Nutanix be doing? What advice do you give them on what they can do to engage even more with the channel? >> They've gotta ramp up the marketing. They've gotta provide the air cover for the channel. They've gotta go out and create the demand, create the awareness. The channel will follow through on that. >> One last question I have for you, what advice do you give to the channel today? For them to stay profitable, stay relevant, in this ever changing future? >> It's professional services and annuity revenue. Days of selling boxes are gone. They'll always be boxes you say but you know, it's pure commodity now. Maybe they should invest in super micro? >> Alright. Well Keith Humphries, pleasure to talk with you again and thank you much for joining us. >> Thanks Stu >> We'll be back with lots more coverage here from Nutanix .Next in Nice, France. You're watching theCube. (upbeat pop music)

>> Announcer: From the SiliconANGLE Media office in Boston, Massachusetts, it's theCUBE. Now, here are your hosts, Dave Vellante and Stu Miniman. >> 2010 was the first year we brought theCUBE to VMworld. At that time, VMware was a $2.5 billion company with former Microsoft exec Paul Maritz at the helm. Two years earlier, in a stunning development, VMware fired co-founder and CEO Diane Greene, which sent the company's stock tumbling almost 25%. Under pressure from investors, Joe Tucci, the chairman of EMC, made the move after a rocky four-year relationship with Ms. Greene. EMC purchased VMware in 2004 for $635 million. The Maritz years were marked by a strategy to move the company beyond the hypervisor into new areas of growth, including desktop virtualization and applications, which were met with mixed market responses. To Maritz's credit, however, the company continued to expand its presence in the data center, and under his leadership remained highly competitive with Microsoft, who was seen at the time as VMware's main rival. In 2012, the company named long-time Intel and then recently EMC exec, Pat Gelsinger as its CEO. Gelsinger inherited a roughly $4.5 billion company, staring into the teeth of the oncoming cloud megatrend. Gelsinger quickly embarked on a strategy to refocus on the core business, buoyed by a restructuring of many of the VMware assets that EMC and VMware folded into a new company called Pivotal. Gelsinger made several attempts to maintain and expand VMware's total available market with a public cloud play called vCloud Air, which ultimately failed. On the plus side of the ledger, however, Gelsinger led VMware's software-defined data center strategy grabbing pieces of its value chain that were historically left for the ecosystem. Of course, the most notable being NSX, the company's software-defined networking product, and vSan, a software storage play. Fast forward to 2017, and add to these developments the momentum of VMware's cloud management and orchestration offerings, its security and other multi-cloud services, and you now have a nearly $8 billion revenue company growing at 10% per anum, with a $40 billion market cap, and a new owner, namely, Michael Dell and company. Hello, everyone. My name is Dave Vellante and I'm here with Stu Miniman, and this is our VMworld 2017 preview. Stu, thanks for joining me. >> Dave, can't believe it's bene eight years we've been doing theCUBE at VMworld. >> Right, and we have been tracking this, Stu, and now, as we were saying, we see new owners, Michael Dell, Dell buying EMC, and of course VMware maintaining the vast majority of the ownership. Stu, what has changed since Michael Dell purchased VMware? What's changed in terms of Dell, its ownership, and also in the past year? >> Yeah, so it's been one of the top questions. Last year, John Furrier and I interviewed Michael Dell, and there were still everybody trying to say after the acquisition happened, "Aren't you going to just sell of VMware because VMware "needs to be independent, "they need to be able to partner with everyone?" And Michael was basically like, just lit a fire underneath him, and he's like, "People that think I'm going to sell it "don't understand the business plan "and they don't understand math." Everybody thought, "Oh, you got to sell them off "to be able to pay down the debt," and he's like, "No. "VMware has been called the jewel of this acquisition "of EMC, the largest acquisition in tech history." And that relationship of VMware is something that's still playing out. One piece of it, you mentioned vSAN, one of the success stories, there was the failure of EVO:RAIL, which was kind of the first generation solution put together sold through a whole lot of partners. They took that whole product and marketing team and put them together with EMC and created the VxRail team, which now reports up to Chad Sakac. On the Dell/EMC side, VxRail doing quite well, vSAN doing phenomenally well. They claim to have the most number of customers for any product in the hyper-converged infrastructure space. Lots of different solutions out there. So, some of that blending of how Dell/EMC and VMware, we see a little bit of that, but still, VMware partners with everyone. VMworld, still, Dave, is probably the largest infrastructure ecosystem out there, and even if we look at cloud, it's one of the more robust ecosystems out there. The only one probably rivals it these days is Amazon. >> Stu, isn't Dell's ownership of VMware somewhat more threatening to server vendors in particular than EMCs? Especially Cisco, IBM, HPE, large volume movers of VMware licenses, how has that affected the dynamic in the ecosystem? >> Yeah, Dave, we've talked in previous years. I was at EMC back at the beginning of the VMware relationship. EMC really didn't know what it was getting when it got VMware. It was less dollars were going to go into servers because we consolidate with virtualization, and less dollars to servers should mean more dollars to storage, good for EMC. Well, Dell, number one thing that Michael Dell wants to do is sell Dell servers. So, of course, if I'm someone else in that ecosystem, if I'm selling other servers, if I'm selling storage that doesn't run on Dell gear and not part of that Dell ecosystem, absolutely it could be a threat. Micheal has maintained the they're going to keep VMware, allow them to have their independence, and I haven't heard too many rumblings from the ecosystem that they've messed up the apple cart from VMware's standpoint. >> Okay, last year the talk was that Pat Gelsinger was on his way out. >> Stu Miniman: Yeah. >> You see Pat Gelsinger doesn't appear to be on his way out. There's earnings momentum, which we'll talk about, but thoughts on management? >> Yeah, so, right, Dave. Number one thing is we thought Pat would be out. Things are doing better from a stock market. You talked about the growth, 10% per anum right now is solid VMware. We've seen a number of moves and changes, people that, there have been a lot of people that have left. There's new people that have come in. There are areas that are doing quite well, and virtualization is still a mainstay of the data center. One of the things we'll talk about, I know, is that Amazon relationship, which we expect to hear a lot about at the show. Amazon's one of the Global Diamond partners, which, a year ago if you had said that Amazon was one of the top partners up there with the likes of Hewlett Packard Enterprise, OVH took over the vCloud Air business, which is, as you said, it failed from VMware's standpoint. They still have a number of partners. Companies like Rackspace, OVH that took over that vCloud Air business, and lots of service providers are doing quite well selling VMware lots of places. And virtualization still is the foundational layer for most infrastructure. >> So VMware pre-announced earnings to the upside and future growth ahead of expectations, so the stock got a nice pop out of that. What's driving that momentum? >> The two areas you talked about first. vSAN is doing quite well. It's driving a lot of adoption and trying to get VMware to be a little bit more sticky and really kind of slowly expand as opposed to big chunks. We talked about when Pat first went in as CEO, it was, VMware had to play a similar game to what Intel did, Dave, which is how do they expand what they're doing without really ostracizing their ecosystem. And, to their credit, they've done a pretty good job of that. They baked in some backup solutions, but lots of backup solutions, you and I were at the vMon conference earlier this year. VM's still doing a very solid business inside of VMware's ecosystem. Lots of other players that play well there. NSX is really starting to hit its stride, that networking piece, but where a few years ago we were talking about it was VMware versus Cisco, well, they seem to be kind of settling into their swim lanes. Cisco still has their core networking business. Cisco's trying to become more of a software company. Cisco actually recently bought Springpath, which was their hyper-converged product, but today that's far behind what vSAN's doing, revenue, users, and everything like that. AirWatch was another acquisition. Sanjay Poonen really helped drive that forward. So the mobility play, VMware's doing well. A lot of the emerging areas, we've been waiting to see where VMware goes with them. Things that I look at like containerization, server lists, open stack VMware had some plays there. They are really kind of nascent at this point and haven't really exploded. I always look at this show, are we seeing many developers there? Lots of the shows we go to have a big developer group. We'll have a little bit of developers, but it's really still a small piece of the overall picture. There's still lots of virtualization admins, people looking at where VMware fits into cloud, and that's kind of where it sits today. >> Let's talk about the competitive dynamic, which is totally different. I mean, back when we first started covering VMworld with theCUBE, 2010, it was really Citrix, Microsoft, Citrix with VDI. You mentioned AirWatch, which kind of flipped the dynamic a little bit. Quite a bit, actually. But Microsoft was the key virtualization competitor. Now it's like competitors, partners, you've got Google Cloud, now, of course, Diane Greene running Google Cloud, which is kind of ironic. We can talk about that. Microsoft with Azure, AWS, which is, we expect to hear a lot from VMware at VMworld 2017 about the AWS relationship. Certainly, IBM with its cloud. Nutanix, which launched at VMworld several years ago, is now more competitive. You mentioned Cisco. They're clearly more competitive with NSX. How do you describe the competitive landscape? What should we be watching at this year's show? >> Yeah, Dave, first of all, you talked about how VMware grew from kind of the $2.5 billion to more like an $8 billion, so of course they're bumping into, kind of going over some of their swim lanes a little bit, and the market has matured. Absolutely, hyper convergence for the last few years has been one of the hot spots, not only for VMware, first when they launched vSAN, it actually was the tide that rose for a lot of their competitors out there. Nutanix, SimpliVity, many of these companies said that they actually stopped a lot of their outbound marketing for about a year because all the people that called up looking at vSAN went to those solutions. Now vSAN's hitting its stride. It's doing really well. I highlighted how VxRail is doing great revenue on the Dell/EMC side, and there's still lots of partners that VMware has. So hyper converge, absolutely something that we'll see there. Cloud, big piece. I mentioned Rackspace, OVH, all the service providers. The vCloud Air network is still kind of there. So how VMware is getting into the service providers, how they're getting into the cloud, I know we'll talk a little bit more about the cloud piece. Last year it was the Cloud Foundation suite, which takes vSAN, and NSX, and vSphere, puts it all together with a management, and that's something that VMware wants to be able to put on prem in a service provider or in AWS. So really, wherever you go, VMware is going to be there and stretch that, but it's like a four-node star configuration. It doesn't natively go into Amazon. That's been a lot of the lift that's been happening over the last year to try to get that VMware on AWS working, and I hear it's not 100% baked yet by the time we get to the show, but working out a lot of those details. But cloud, hyper-converged, some of the new ones. VDI will still come up too, I'm sure. >> How about Docker? Where do they fit in the competitive landscape? >> Yeah, it's interest, remember, I remember the last year we had the show in San Francisco we had Ben Golub, a CEO at Docker, on the program there. Ben's no longer the CEO. They switched CEO's. We had theCUBE at DockerCon this year. Containers, absolutely very important. VMware has something called VMware Integrated Containers. I hear a little bit about it, but most people, if they're saying, "I'm doing virtualization," they're probably doing it on Linux. So Red Hat Summit this year, heard a lot about containers. We're going to have theCUBE at Kubecon, which is the Kubernetes show, later this year. So we know VMware plays a little bit with Docker. I'd love to see VMware saying how they fit into the Kubernetes piece a little bit more. We heard of the Cloud Foundry Summit earlier this year, how Pivotal kind of fits into that environment and they've got a way to be able to spread across multiple environments there. But VMware tends to play in a little bit more traditional applications. And, Dave, when you talk about a competitive standpoint, that's what I look at for VMware. The biggest threat to them is they don't own the application, so Microsoft, Oracle, IBM, and all those cloud-native apps that are getting put in the public cloud, like Google, and Amazon, and Microsoft, does that leave VMware behind? Does VMware, I heard it many times last year, become the new Legacy? >> Well, and, but they're clearly positioned as an infrastructure player, so let's talk about that. I mean, cloud has become the new, infrastructure and service, become the new big competitive threat to on-prem infrastructure. Wikibon has done some research on the true private cloud. Interestingly, I mean, true private cloud essentially is a moniker representation of public cloud-like attributes on prem, bringing cloud, cloud models, to the data, for example, and Wikibon has forecast that as the largest market. I think I've got some data here. It shows that true private cloud over time will be a $230 billion market, whereas infrastructures and service in the public cloud will be about 150 billion. So you expect that true private cloud is going to overtake that. It's growing faster. The CAG here is 33% versus public IAS at 15%, but the big thing is staff. >> Yeah. >> Staffing, getting taken out essentially, getting out of non-differentiated heavy lifting, but what is VMware's cloud strategy generally, but specifically with regard to bringing the cloud model to the data on prem? >> Yeah, so when we created the true private cloud definition, we said,"Vvirtualization alone is not cloud, "and therefore, what do we need? "We really need to have that automation, "that orchestration." And VMware had done a number of acquisitions, they're putting the suite of solutions together, and it's more than just saying, "Oh, I have six different software products; "here's a bundle." How do we fully integrate that? And that's what the Cloud Foundation suite's what VMware put together so that I can have it in a virtual private cloud in Amazon. And it's something basically VMware manages it, but it's Amazon's data center, and that's plugged into the public clouds. I can do the similar sort of thing in the service providers and that's why, with our forecast, Dave, we show in about five years, true private cloud should have more revenue than public cloud. Big reason is because there's a whole lot of Legacy out there and moving from all of my, most companies hundreds if not thousands of applications, getting all of them to the public cloud is tough. Having them in a virtualized environment and being able to slide them over to this kind of environment makes a lot of sense. I can do that. And the shift of my workloads and my applications going to microservices really starting to break apart some of the the pieces is something that a lot of times that's going to take five to 10 years. So, in the meantime, we're going to shift kind of Legacy to private cloud while we're picking off the things that we can with the public cloud. And VMware with their Cloud Foundation suite and their solutions that they're putting together, networking as, really, the inter fabric with NSX, vSAN making it easy to make those applications a little bit more portable between different types of infrastructure, but that's really, VMware is they put their cloud play, and they have a very large set of partners that they're working with in this space. >> So, Stu, how should we look at the VMware AWS deal? Is it AWS's attempt to get a piece of the true private cloud action on prem? Is it VMware's initiative to try to actually get a cloud strategy that has teeth, and works, and has longevity? How should we think about that? >> Yeah, it's, of course, a little bit of both. At its core, I think it's Amazon looks at 500,000 VMware customers that have data center deployments and they're going to stick a straw into that environment and say, "Come try out the first taste of our services," and once you get on the Amazon services which, by the way, they're launching, what, three new features every week, I think. I was at the Amazon Summit in New York City recently and it was like, "Oh, it's a regional summit," there were like three main announcements. No, I got the email. There were like 12 announcements and each one of them were kind of cool and things like that. So it absolutely is how do I get customers comfortable with moving to this new model. I think one of the things that Microsoft did really well is when they pushed everybody to Office 365, they said, "SaaS is the way you should always think "about buying your applications going forward, not, "I'm going to deploy a server for my Outlook, "I'm going to deploy infrastructure for my SharePoint." It's, "I'm going to buy Office 365 and that's just "the way it's done." So they made it the okay. Now VMware, it's really dangerous, in a way, saying, working with Amazon, now we're saying, "Hey, playing on Amazon's safe. "The water's nice." And once they get in that water and you have access to all of those cool things that Amazon keeps putting out, which, by the way, Dave, the week after they announced the partnership of VMware and AWS, what Amazon announced was, "There's a really easy "migration service that, if you have "a VMware Ware environment, "you just kind of click this button." And I'm pretty sure it's for free. "You can now be completely on AWS "and you don't have to pay for VMware licensing anymore. "Wouldn't that be nice?" >> So, okay, so the way you've phrased it or framed it, is it sounds like that VMware, with its half a million customers, has more to lose than AWS in this deal. Is that the right way to think about it or is this not a zero-sum game? >> I don't think it's a zero-sum game when, you brought up the true private cloud. The data center still, there's room for some growth with VMware, even if people are 90% virtualized now, there's some room for growth there. Public cloud, though, has a strong growth engine, so now VMware has a play there. Rather than saying, "It's the book seller, don't go there," they want to have a play. Michael Dell, Dave, I'm sure we're going to ask him, say, "Hey, what do you think the world's going to look like "in five years? "You've got your Azure Stack partnership "that you're lining up with your server division "and with EMC, you've got Amazon that VMware's playing with, "you've got your data center; "how does that go?" And, of course, Michael being the smart businessman that he is, is going to say, "Uh, yeah, you're going to buy Dell "no matter what solution you go with, "and I'm going to have a strong position "in all of them." but it definitely is, we're in a bit of a transitional phase as to how this is going to look. We've, for years, been arguing how big does public cloud get, what applications go where. I do think that this has the potential to accelerate a little bit from VMware's standpoint. VMware customers getting in this environment, trying out some of the new things. I know lots of people that were in the virtualization community that are now playing in the public cloud, getting certified, doing the same things that they did a decade ago to get on public cloud. So, as those armies of certified people kind of move over in the skillset, we have a generational shift going on and lots of people are going to be like, "Hey, I don't want to spend 12 to 18 months "building a temple for my data anymore. "I can just spin this up really fast and move." It's interesting, Dave, Cycle Computing, one of the earliest customers that we interviewed at Amazon, was just acquired by one of the other cloud guys, not Amazon. So companies that know, that was an HPC company that was, rather than spend 18 months and $10 million, we can do the same thing in, like, a few weeks and $10,000. >> They're super computing in the cloud. All right, let's wrap with what to expect at VMworld 2017. Obviously it's going to be a lot of people there. They're your peeps. A lot of partying going on. It's like, it used to be Labor Day kicked off the fall selling season, and for years it's been VMworld. What should we look for this year? >> Yeah, so, I'm excited, Dave. It's always, this community, they spend like the whole summer getting ready for it. I'm actually going to be sitting on a panel at Opening Acts, which is, the VMunderground group does on Sunday. So the event really, it doesn't start Monday, Dave, it actually, a lot of people are already flying in by the time this video goes up. They're doing things Saturday. On Sunday there's three panels. I'm sitting on one on buzz words in IT, so to things like cloud and server lists. Are those meaningful or are those a total waste of our time? So that kind of gets us started. You mentioned lot of good parties at the show always. There's the vExpert community. I was a vExpert for a number of years back when it was, you know, hundred, couple hundred people. I think there's now 1,500 vExperts worldwide. We've got a bunch of hosts coming in to help us, including John Troyer who created the vExpert program, Keith Townsend, Justin Warren, excited to have them. Lisa Martin's going to be co-hosting, along with you, me, John Furrier and Peter Burris. So we've got a big team. We've got two sets. We've got a great lineup at theCUBE. Two sets, three days in the VMvillage, which this year is on the first floor right outside of the Expo Hall. So it's one of those things I don't expect to sleep a lot. I expect to see a lot of people, bump into 'em on the show floor, stop by theCUBE, see the parties, and definitely see 'em in the after parties. >> Great. Well, as Stu says, we have two sets going on, so please stop by and see us. Stu, thanks very much for helping me with this VMworld preview. We'll see you in Vegas next week. Thanks for watching, everybody. See you in Las Vegas. This is theCUBE. (electronic music)

>> Announcer: Live from Washington D.C., it's theCube, covering .Next conference. Brought to you by Nutanix. >> We're back, this is Dave Vellante with Stu Miniman, and this the wrap of .Next, Nutanix's customer event, #NEXTConf and this is theCube, the leader in the live tech coverage for enterprise technology. Stu, second day. I got to say, Nutanix has always done a good job, innovative venues, they do funky, fun stuff with marketing, we haven't seen the end of it. We have another keynote today, there's a keynote tomorrow morning, big names, Bill McDermott's here, we just saw Peter MacKay, Chad Sakac is here. Who am I missing? >> Stu: Diane Greene >> Diane Gree was up yesterday. >> Y'know, thought leaders, had the CEO of NASDAQ on this morning Dave, y'know really good customers, thought leaders, Nutanix always makes me think a little bit, which I really enjoy. My fourth one of these Dave, usually by the fourth show I've gotten to, it's like I've seen it. Have we made progress, where are we going? >> I thought Sunil Podi's comment was really interesting, he said, "Look, we saw the trends, "we knew that hardware was going down." I mean, they're essentially admitting that they were a hardware oriented company, infrastructure company, we saw what was happening to infrastructure and hyper-converge, and we could just packed it up then, sold the company for a bunch of money, there were rumors floating around, you know they were pre-IPO, they easily could have sold this thing for a billion plus, all could have cashed out and made a buncha dough, and they said, "Y'know what, we're going to do something "different, we're going to go for it." You got to love the ambition, and so many companies today just can't weather that independent storm. I mean, you've seen it over and over and over again. The last billion dollar storage company that remained independent was NetApp, that was 14 years ago, now Nutanix isn't a storage company, but look around here, look at the analysts, a buncha storage guys that have grown up, and it's to me, Stu, it's a representation of what's happening in the marketplace. Storage as we know it is going away, and it always has transformed, y'know it used to be spinning disc drives, then it was subsystems, then it was the SAN, now it's evolving, these guys call it invisible infrastructure, call it whatever you want, but it's moving toward infrastructure as code, which is just a stepping stone to cloud. So your thoughts on the event, the ecosystem, and their position in the marketplace. >> Right, they reach a certain point, they've gone public, can they keep innovating? Look at a number of announcements there, we spent a lot of time talking about the new CloudZi service out there. >> Si? >> Zi. >> Zi, zi, sorry, you got it. (chuckles) >> Pronunciation of some of these, "it's Nutanix, right?" >> Nutonix, Nutanicks, (chuckles) >> They made jokes about the company last year, but this year, that's product, we're talking vision. The ink is still drying on the relationship with Google, doesn't mean they haven't been working for a while, but where this deal goes, interesting to see where it is six months from now, a year from now, because also Google, small player, I mean it wasn't to be honest, I was at the Red Hat Summit and they had a video of Andy Jassy saying, "We've extending AWS with OpenShift." And you're like wow. Red Hat has a position in a lot of clouds, but for Andy Jassy to make an appearance, Amazon, the behemoth in the cloud, that's good. Look, getting Diane Greene here, I said number one, it gives Nutanix credibility, number two it really pokes at VMware a little bit, she's like, "Oh, I did this before." And everybody's like, "Well, she's here now at Nutanix." Nutanix wants to be, that they've compared themselves to both Amazon, I think we hear it was Sunil or Dheeraj in an analyst session said they "want to be like the A Block." Not the V Block that EMC did, but the Amazon Block for the enterprise, or the next VMware, they talked about the new operating system. It's funny, in a lot of my circles, we've been trying to kill the operating system for a while, I need just enough operating system, I want to serverless and containerize all of these things because we need to modernize, and the old general-purpose processor and general-purpose operating system has come and gone, it's seen its day, but Nutanix has a play there. When I look at some of the things going on, we're talking about microsegmentation Dave, we're talking about multi-cloud and some interesting pieces. I like the ecosystem, I like that balance of how do you keep growing and expand where they can go into, leading the customers, but they're delivering today, they've got real products, they've got real growth, sure they have some challenges as to that competitive back and forth, but you asked Chad Sakac if this reminded him of Dell EMC, and kind of that partnership that they had for years, reminded me a little bit of kind of EMC and VMware too, once EMC bought VMware, VMware, the relationship they had, HP, and IBM, and other companies that they needed to treat as good or better than EMC. They're some of those tough relationships, and Dell with Nutanix, their partner, not only do they do Dell XC, but now they're doing like Pivotal on top of it, they can do Hyper-V deployments, Lenovo's another partner, Nutanix is broadening their approach, there's a lot of options out there and a lot of things to dig into, interesting, they keep growing their customers, keep delighting their customers, it reminds me of other shows we go to, Dave, like Amazon re:Invent, customers are super excited, You tell me about the Splunk conference and the ServiceNow conference where those customers are in there, they're excited, and Nutanix is another one of those, that every year you come, there's good solid content, there's a customer base that is growing and exciting and sharing, and that's a fun one to be part of. >> So, I want to ask you about VMware, it's kind of a good reference model. EMC paid out, I don't know, $630 million for VMware, which was the greatest acquisition in enterprise IT history, no question about it in terms of return. A couple questions for you, you were there at the time, you signed the original NDA between EMC and VMware, kind of sniffed em out. Would VMware's ascendancy been as fast and as successful, or even more successful, without EMC? Would VMware have got there on its own? >> I don't think so Dave, because my information that I had, and some of it's piecing together after the fact is VMware was really looking for that company to help them get to the next state. The fundraising was a little bit different back in 2003 than it was later, but rumors were Semantic was going to buy them. Everybody I talked to, you'd know better than me Dave, if Semantic had bought them, they would have integrated into all their pieces, they would have squashed it, the original talent probably would have fled much sooner. EMC didn't really know what they had, I had worked on some of the due diligence for some of the product integration, which took years and years to deliver, and it was mostly we're going to buy them. Diane had a bit of a tense relationship with Joe Tucci kind of from day one, and it was like okay, you're out there in Palo Alto, we're on the other coast, you go and do your thing, and you grow, and by the time EMC had gotten into VMware a little bit more, they were much bigger. So I think as you said, they're one of the great success stories, EMC did best in a lot of its acquisitions where it either let it ran a division and go, or let it kind of sit on its own and just funded it more, so I think that was a-- >> Well, and the story was always that Diane was pissed because she sold out at such a low price, but that's sort of ancient history. The reason I brought that up is I want to try to draw the parallel with Nutanix today, and come back to what you were saying about the A Block. When you look at Amazon, we agree, they have a lead, whether that lead is five years, seven years, four years, probably more like five to seven, but whatever, whatever it is, it's a lead, it's substantive. Beyond the infrastructure, the storage and the compute, they're building out just all kinds of services, I mean just look at their website, whether it's messaging, on and on and on, there's database, there's AI, there's their version of VDI, there's all this big data stuff, with things like Kinesis, and on and on and on, so many services that are much, much larger than the entire Nutanix ecosystem. So the reason for all this background is does Nutanix need a bigger, can Nutanix become it's ambition, which is essentially to be the next VMware, without some kind of white knight? >> So my answer, Dave, is if you look at Nutanix's ambition, one of the challenges for every infrastructure company today, if you think okay, we've talked about True Private Cloud, Dave, what services can I run on that? How can I leverage that? Look at Amazon, y'know a thousand new services coming every year, look at Google, they've got TensorFlow, really cool stuff, they've got those brilliant people coming up with the next stuff, how do I get that in my environment? Well, Nutanix's answer, coming at the show was we're going to partner with Google, we're going to have that partnership, you're going to be able to plug in, and you want to do your analytics and everything, use GCP, they're great at that, we're not, we know that you need to be able to leverage Google services to do that. The Red Hat announcement that I mentioned before, another way how I can take OpenShift and bridge from my data center and my environment and get access to those services. The promise of VMware on Amazon, yeah we're going to have a similar stack that I can go there, but I want to be able to access those VMware servers. Now, could it suck them eventually into all of Amazon and leave VMware behind? Absolutely, it's tough to partner with Amazon. So, the thing I've been looking at at almost every show this year is how are you tying into and working with those public clouds, we talked about it at VMON, Dave, they have Microsoft up on stage, they have partnerships with the public cloud-- >> David: HPE was up there. >> But the public cloud players, if you're not allowing your customers and the infrastructure that you're building to find ways to leverage and access those public cloud services, which not only are they spending $10 billion a year for each one of the big guys on infrastructure to get all around the globe, but it's all of those new services ahead, moving up the stack. To stitch together that in your own environment is going to be really challenging, how many different software pieces, how do I license it? How do I get it on, as opposed to oh, I'm in the public cloud, it's a checkbox, okay I want to access that, and I consume it as I need it, that consumption model needs to change, so I think Nutanix understands that's directionally where they want to go, I look at the Calm software that they launched and say hey, you want to use TensorFlow? Oh, it's just a choice here, absolutely, go. Where is it and how do I use it? Well, some of these details need to be worked out, as Detu said, "it's not like it's one click for every application, any cloud, anywhere." But that's directionally where they're going to make it easy, so all that cool analytic stuff that we cover a lot on theCube, a lot of that is now happening in the cloud, and I should be able to access it whether I'm in my private cloud or public cloud, and it's just going to be consumption model, whether I have certain characteristics that make it that I'm going to want to have that infrastructure for whether that's governance or locality, we talked to Scholastic yesterday, and they said, "Well when you've got manufacturing "in books, I need things close "to where they're coming off the production line, "otherwise there's things that I'm doing "in the public cloud." So that's there we see, when I talk to companies like I do here, at the Vienna show last year, when I talk to Christian Reilly with Citrix, who had been at Bechtel for many years, there's reasons why things need to live close to what's happening, y'know we've talked a lot about Edge, and therefore public cloud doesn't win it all, I know we had one guest on this week that said, "Right, depending on what industry you're is, "is it a 30/70 mix or a 70/30 mix?" There's a lot of nuance to sort this out, and this is long game, Dave, there's this change of the way we do things is a journey, and Nutanix has positioned themselves to continue to grow, continue to expand, some good ambition to expand on, like the five vectors of support that they have, so I've liked what I've heard this week. >> So in thinking about what we're talking about VMware, the imperative for virtualization was so high in the early 2000's because we were coming out of the dot com bust, IT was out of favor, VMware was really the only game in town, there really wasn't a strong alternative, had by far the best product, Microsoft Hyper-V was sort of in-concept, and KVM and others were just really not there, so there really was no choice, it appealed to 100% of the IT shops, I mean essentially. So I wonder though, today, is the imperative for multi-cloud the same? The fundamental is yes, everybody has multiple clouds. But this industry has lived in stovepipes forever, and has figured out how to manage stovepipes, it manages them by fencing things off. So I wonder is the imperative as high, you could maybe make an argument that it's higher, but I'm still not quite getting it yet, as it was in the early 2000's, where the aspirin of virtualization to soothe the pain of do more with less was such an obvious and game changing paradigm shift. I don't see it as much here, I see people still trying to figure out okay, what is our cloud strategy? Number one, number two is the competition seems to be much more wide open, it's unclear at this time that any one company has a fast-track to multi-cloud. >> I think you've got some really good points there, Dave. A thing that I've pointed out a few times is that one of the things that bothered me from the early days with VMware is from an application standpoint, it tended to freeze my application. I didn't have a reason to kind of move forward and modernize my application. Back in 2002 it was like oh, I'm running Windows NT with a really old application, my operating system going to end of life, well maybe it's time to uplift. Oh wait, there's this great virtualization stuff, my hardware's going end of life too. No, shove it in a VM, let's keep it for another five years. Oh my god, that application sucked then, it's going to suck even more in five years, and workforce productivity was way down. So, the vision for Nutanix is they're going to be a platform that are going to be able to help you modernize your environment and how do we get beyond, is it virtualization, is it containerization, is it a lot of the cloud-native pieces, how does that fit in? Starting to hear a little bit more of it, a critique I'd have on HCI about two years ago was it was the same applications that were in my VMware SAN, not VSAN, but my just traditional storage area network was what was running on Nutanix. We're starting to see more interesting applications going on there, and look, Nutanix has a bullseye on them, there are all the HCI direct replacements, there is the threat of the cloud, and I haven't heard as many SAAS applications living on Nutanix as I do when we talk to all flash-array companies, Dave, every single on of them can roll out, here's all these SAAS deployments on our environment, just scalable environments that build that for the future. I haven't heard it as much from Nutanix. >> So VMware was aspirin , Nutanix originally started as aspirin, and now they're pivoting to vitamin. Who are they up against? Who do you like? Who are the horses on the track? Let's analyze the race and then wrap. >> Yeah, so when Nutanix got into this business, it was well, they're helping VMware environments, it was 100% VMware when they first started that relationship with VMware was really tough, they've lowered that too, they've now got what, 28% is running HV, they've got a little bit on Hyper-V, but they've still got about 60% of their customers are VMware. So VMware, y'know, huge challenge, VSAN has more customers than anyone in the hyper-convergent infrastructure space, easy, number of customers, but virtualization admin has taken that. Microsoft, huge potential threat, Azure Stack's coming this year, it's been coming, it's been coming, it's really close there, all the server guys are lining up. Microsoft's a huge player, Microsoft owns applications, they're pulling applications into their SAAS offerings, they're pulling applications into Azure, when they launch Azure Stack, even if the 1.0, if you looked at it on paper and say Nutanix is better, well, Microsoft's a huge threat to both VMware, which uses a lot of Microsoft apps, as well as Nutanix. So those are the two biggest threats, then of course, there's just the general trend of push to SAAS and push to public cloud where Nutanix is starting to play in the multi-cloud, as we talked about, and COM and the DR cloud services are good, but can Nutanix continue to stay ahead of their customers? They're ahead of the vast majority of enterprises, but can they convince them to come on board to them, rather than some of these big guys? Nutanix is a public company now, they're doing great, but yeah, it's a big TAM that they're going after, but that means they're going to have a tax from every side of the market. >> I see HCI as one where you got a leader, and that leader can make some good money. I don't see multi-cloud as a winner-take-all market because I think IBM's going to have its play in multi-cloud, HPE has its play in multi-cloud, Dell EMC is going to have its play in multi-cloud. You got guys coming out of different places like ServiceNow, who's got an IT operations management practice, builds business big, hundreds of millions of dollars of business there, coming at multi-cloud, so a lot of different competitors that are going to be going for it, and some of them with very large service organizations that I think are going to get there fair share, so I would predict, Stu, that this is going to continue to be, multi-cloud is going to be a multi-stovepipe cloud for a long, long time. Now, if Nutanix can come in and solve that control plane problem, and demonstrate substantial business value, and deliver competitive advantage, y'know that might change the game. It's difficult at this point in 2017 to see that Nutanix, over those other guys that I just mentioned, has an advantage, clear advantage, maybe from a product standpoint, maybe. But from a resource standpoint, a distribution channel, services organization, ecosystem, all those other things, they seem to me to be counterbalancing. Alright, I'll give you last thought. >> Yeah, so it's great to see Nutanix, they're aiming high, they're expanding into a couple of areas, and they keep listening, so I hope they keep listening to their customers, expand their partnerships, SAAS customers would be really interesting, service provider is something that they've gotten into little bit, but plenty more opportunity for them to go there. Dave, personally for me, to it have been a company I've watched since the earliest days, it's been a pleasure to watch, y'know I think back, right, VMware you said, I think it was a hundred person company when I first started talking to them and Diane Greene, and I look at where VMware went. I've been tracking VMware for now five years, and reminds me a lot of some of those trends, for a 20 person company, I said to hear almost 3000 boggles the mind, I've been to their headquarters a bunch. So it's been fun to watch the Newton army, and they've been loving watching it from our angles. >> Well and these events are very good events, and so there's a lot of passion here, and that's a great fundamental for this company. So I'm a fan, I think it may be undervalued, I think it very well may be undervalued. >> Wall Street definitely doesn't understand this stuff. >> Alright Stu, great working with you this year, (chuckles) this month, this quarter, this month, certainly this show, so great job. I really appreciate it >> Stu: Thanks, Dave. >> There's a big crew behind what Stu and I, and John Ferrier, and Jeff Frick, and others do here. Here today with us Ava, Patrick, Alex, Jay, you guys have had an awesome spring. Brendan is somewhere, I guess Brendan is doing the keynote right now. So, fantastic job, as always, Kristen Nicole and her team, writing up the articles. Jay Johanson back at the controls, Bert with the crowd shots. Everybody, really appreciate all your support, thanks for watching everybody. We'll see you, we got a little break, I think, in the action, cause it's July Fourth, well it's Canada year, or Canada week-- >> Canada Day and Independence Day next week. >> And Independence Day in the United States, and then we'll be at Infor Inforum, second week of July, I'll be there with Rebecca Knight and the crew, so watch for that, check out SiliconAngle.com for all the news, Wikibon.com for all the research, and theCube.net to find all these videos, Youtube.com/SiliconAngle, it's everywhere, if you can't find it, you're not on Twitter, you're not on social. Thanks for watching, everybody. This is Dave Vellante with Stu Miniman, we're out. (lo-fi synthesizer music)

>> Narrator: Live from Washington, DC, It's The Cube, covering .NEXT Conference. Brought to you by Nutanix. >> Welcome back, everybody. This is day 2 of the Nutanix .NEXT Conference, #NEXTConf. This is The Cube, the leader in live tech coverage and my name is Dave Vellante, and I'm here with my co-host, Stu Miniman. As I said, this is day 2 and today, the keynotes were in the morning. Yesterday, they were in the afternoon. So, when we left you yesterday we went right in the keynotes with CEO Dheeraj Pandey, who gave a very, as he always does, Stu, a very philosophical deep discussion, a lot of commentary from thought leaders and some customers. Somewhat long, although shorter than last year, but that's Nutanix likes to do things. They want you to bake and savor what's going on in their community and their ecosystem. Today, it was all about product. Sunil Potti got up and he basically took us through the products, the new innovations, the strategies, and that's what we're going to unpack this morning in the next couple of minutes and then go deeper throughout the day. So, Stu, it's all about cloud. Two years ago, at the first, the inaugural .NEXT Conference, Nutanix laid out a strategy of moving beyond hyper-converged infrastructure. This is at a time when everybody was pivoting to hyper-converged from the traditional converged, or the legacy infrastructure. And they laid this long term, little bit fuzzy vision about supporting cloud and multi-cloud. At the time, it was really focused on migrating off of VMware onto other platforms, but they sort of teased us with a vision of cloud. Today, we saw that vision come into a little bit more clarity, but there's still a lot of questions. Give me your summary on the keynote today and specifically, this Nutanix strategy of being the cloud operating system. >> And Dave, I think vision is the right term because unlike previous announcements by Nutanix, a lot of what they laid out here are things that in development. The two big announcements that they talked about yesterday and went through a little bit more today, Calm, which was an acquisition that they had made last year really, to be able to help them try to be that management across multi-clouds. That's in process I believe, if I remember right, it's the second half of this year, it will be shipping. I got a note from a friend of mine, and they're like, okay this is the 687th product in the industry that's trying to solve this problem because everybody is trying to solve this problem. Microsoft wants to be the player here. Companies like CA want to be in the lead here. Of course, Amazon would like to manage everything because just put it on Amazon. So, why is Nutanix position to be the control playing layer of a multi-cloud world. Nutanix is a small player. They've got some good pieces. They're starting to touch some of the environment, but I'm not sure. In the second one, the zee or jee cloud services, that's not- >> Zee, Si, jee (laughs) ... >> It's spelled X-I and we've heard multiple pronunciations. We'll get Sunil on this and get him- >> X-I is, as you told me this morning, the last two letters of Nutanix flipped. >> Yeah, so, it's a DR service that they're going to deploy. It's in development right now. I don't think we know anything about pricing yet. It's not going to ship until the first half of next year, is the target for that. But really lays out, as to, I think we really want to get to the Google relationship and beyond. How does Nutanix get to be more than just an on premises infrastructure layer. They've already sold to service providers. I've talked to companies that not only build their infrastructure, but sell services based on using Nutanix as an infrastructure, but they're going to take that full Nutanix stack and make it available in Google data centers around the world, and we expect them to expand those partnerships and what Sunil was hitting on at the end of his keynote is, the terminology they used is your cloud native, your mode one applications, a lot of times those start in the public cloud, and sometimes those come back to an infrastructure like in Nutanix, where I can run it in a similar operational model. And then, do we take our mode two applications, the big legacy, the thousands of applications that we have, do we try to shove those in to the public cloud? And the challenge there is if it's not the same stack on both ends, it's not the same operating model, there's challenges and I know we wanted to use that out a little bit. >> So, Stu, I had a conversation with Paul Moritz in 2009, where he said to me, "The advantage that Amazon and Google and Facebook have is that they have homogeneity in their data centers." And he said, "For us to succeed in cloud, we have to have homogeneity in both on prim and in the cloud." And so he, at that point, indicated that the VMware strategy was going to be putting, essentially, VMware in these clouds and the cloud service providers, as we all know, that manifested itself in vCloud Air. We've heard the story before. How is this different? >> First of all, vCloud Air, most people would agree, a failed strategy. >> Who would not agree with that? (laughs) >> Right. The biggest challenges we saw on vCloud Air when I talked to the community is VMware said, "Wait, we're going to build it ourselves and run it," and customers were like well, I've got lots of partners, and they're like, well, we'll partner with Savvis. And Savvis made no margin on this. Couldn't do anything else. They tried to go to lots of other service providers, and they were, I don't know how I add services, I don't know how I add value. >> So, how is this different? >> You look at this and say okay, well, Nutanix is going to start with building it themselves because they want to understand it. I've talked to service providers here that say, "Hey Nutanix, we have experience and we know how to do this. We could advise you on this." Of course, Nutanix, they didn't come out and say this is the future, everybody run every service on this. They say, hey, we're working on a DR solution, we're a little bit measured. This is where we're going. I think there's time for it to mature, time for Nutanix to work with their partner Ecosystems. The Google announcement gives Nutanix credibility, but a lot of it is pressure leased slideware, if you will. You say, "Okay, great, I'm going to take Z and run it on GCP." Well, this is a product next year that, maybe, will probably run somewhere with Google. Where's the details? >> Okay, talk about lift and shifts, too. >> Thanks Dave. We talked yesterday to one of the doers, one of the practitioners of Nutanix, and they said, "Hey, I'm looking at containers." And we said, "Hey, are you looking at Nutanix for this?" They say, "Well, now that I hear they're working with Google, who's obviously a thought leader in driving that, that will drive them closer to us." So, question is, the Z cloud service is based on AHV. So, if I bought in, there are some customers who say "I want a virtualized environment that I can mirror," but most of us look at it and say virtualization is kind of heavy for taking something to more the public cloud. If I containerized, then I can use kubernetes, and I can move applications a little more. Debate we're having internally, Dave, often is how much of the stack do I have to have to complete hardware all the way through on both ends? Do I have something like kubernetes, which allows me to take containerized applications and move them, because lift and shift, I was at the Cloud Foundry Summit, and it said let me build my new applications on the platform, and then I'll start migrating some over so I have that shared management platform to hold the environment. But, it's challenging. The same thing we've had discussions. Amazon, there's certain applications we build there, Amazon would love you to take all of your applications, but it's not trivial. Porting something over is not easy, is one of the points that Nutanix was making, and we've heard from the community that Amazon really doesn't want you just to trying to lift the whole thing and shift it. You should be doing some refactoring, or start pulling apart your application- >> They want you to pull change the operating model. So, Stu, is this a blind spot for Nutanix? Let me back up. We asked Pat Gelsinger, when Docker and Core OS came on the scene, what does that mean for you? He said, "Hey, we've got the best container in the world. It's VMware." And we all kind of went, mm, I don't know. Is this a similar head wind potentially? Is this a threat that Nutanix is so VM focused versus containerize? Or can they just embrace containers? >> Great question. Something I want to pose to the Nutanix executives, Dave, because there's multiple paths forward. When we asked Amazon a similar question, they said to get from your legacy data centers to public cloud, here are the eight R's, as to refactor, re-platform, redo this, things like that. There's more than one solution. As we know, customers have lots of applications. There's some that you're going to leave them sitting on. That old hardware in the back corner and run it until that thing burns into the ground. >> Running on CMS. >> Absolutely, Dave. Many of those things got moved into VM environments and are going to stay there for awhile. So, unfortunately, everything in IT tends to be additive, and we've got all of the debt of ... >> Don Tapscott. God created the world in six days, but he didn't have an install base. The technical debt. >> Technical debt. >> All right, Stu, we got to wrap. This is day two of Nutanix. We're going all day long. Today, heavy executive, partner and customer day. We have Sunil coming on. We're going to go deep on products. Chad Sakac coming on from Dell-EMC. We got Dheeraj, of course, the CEO. Stay tuned, everybody. Stu Minima, Dave Vellante. We'll be right back after this short break.