>> Announcer: Live from Las Vegas, it's theCUBE, covering Dell EMC World 2017. Brought to you by Dell EMC. >> Welcome back inside Dell EMC World 2017 here on theCUBE, we continue our coverage. Day 3 here in Las Vegas from the Sands Expo, sandwiched in between the Palazzo and the Venetian. A great show, a great vibe, and it's been a good show for Virtustream. And we have with us the president and CTO and a co-founder from Virtustream joining us now, Kevin Reid. Kevin, good to see you, how've you been? >> Been great, it's just very energizing being here this week. >> Yeah, what about the week for you? I'm sure you have a couple of announcements we'll get to in just a moment, but just want to get your take on the show here as we wind down. >> You know, the show's just been incredible. You know of course, it's the first year that they're all coming together, if you will, as the brand of Dell EMC as one show for the stage. It's been a great stage for us, great audience, looking at the range of countries and clients represented. We've actually just been blown away at the energy behind what Dell Technologies now represents as the overall set of brands in the portfolio. >> So let's get to the news that you made this week. One in the healthcare space, I know very important space for you, and in the connector space as well with vCloud. Let's go ahead and take them one at a time if you would. >> Absolutely, so healthcare cloud, you know, for us just a fantastic area when you look at just all the regulatory issues associated with healthcare in general, and certainly we don't have enough time on this show to go into what all that means, but the ramifications are. >> No, we'd like to get into HIPAA compliance if you don't mind. >> We actually talked about it yesterday, so if you want to talk about it again. >> Just kidding, just kidding, we don't have time here, right (laughs). >> It's just been fantastic because with all that change becomes all the investments that the healthcare companies are having to make, whether it's in EHR or EMR and as you look at changing out those systems of record that really run the critical patient care for those healthcare providers, it really presents a great opportunity. So what we've done is said let's leverage our core competencies of mission critical and let's gear that towards the healthcare space and let's leverage our compliance in HIPAA and other things like that and be able to bring to the market a capability that's multi-talented, that's utility oriented, but has that mission critical SLA that we're accustomed to providing our clients over the years. So we're very excited about that. We think it's a great market, a great industry overall, and we've seen fantastic feedback even in this show from clients who are very excited to now engage and what that could mean for them. >> So, Kevin, the connector announcement. VMware, we're at De\ll EMC World, VMware a huge part of the Dell Technologies' portfolio. What's the news around connector? >> So with the connector, what it really allows us to do is take what has been our cornerstone differentiation over the years, which is really around the mission critical, high service levels, when you think about guaranteed service levels, almost think of us as more of a managed infrastructure, as a service that has those high SLAs associated with it. So having clients be able to take the VMware estate and then be able to provision and manage workloads that are then being provisioned into the Virtustream, high SLA mission critical environment, is a big step for those enterprise customers. It's a big step for Dell Technologies as a brand. And it doesn't necessarily change the fact that you can also do that to other public cloud providers, you just get a higher level of service by doing it with Virtustream. >> So let's talk a little bit about that value prop of Virtustream. Doing the acquisition, it kind of made sense to me. EMC, traditional enterprise, high availability company, you know you had the VMAX 5, 6, 9s array. Virtustream, you guys did a wonderful job with taking a complex application SAP, providing some provisioning tools around that, and making that a consumable resource in the cloud. Talk to me a little bit about the conversations you've had on the show floor with traditional Dell EMC customers. Are they starting to really warm up to this expansion of the Virtustream brand beyond SAP into other mission critical apps? >> Absolutely, and that really represents the huge growth opportunity for us. As Virtustream we were very successful, as you mentioned, going into the SAP application space because typically SAP will be the system of record for a lot of these large enterprises. And what happens is, with your system of record, things like data persistence and performance guarantees, high IO, large footprint workloads, they're absolutely germane to those systems of record, but SAP is not the only application that fits into that category. When you look at all the different verticals and you look at the areas like we mentioned with healthcare and some of the key applications like Epic and MEDITECH and Cerner, and then you look at the other verticals, there are always these very key systems of record that require that sort of heavy weight capability around mission critical. And so leveraging all of our learnings in the application space, that we can bring that level of mission critical infrastructure performance with that application-centric automation that is focused on that kind of capability, it just makes sense. So it opens up the aperture in terms of the number of apps that we can now run on the Virtustream platform. Technically we could do it before, but now with the reach of Dell EMC, it not only allows us the account penetration by getting in there with relationships that are already leverageable with Dell EMC, but it allows us to also reach the partner community on the software side and be able to talk to application vendors that we can actually bring on to the platform as well. So we're very excited about that. >> So this isn't really anything new for you guys in essence. SAP is what I like to call one of those core center of gravity applications, it's heavy. You're going to have a lot of applications around SAP, and those applications are going to be just as critical, transaction applications, payment processing, big data apps, and you guys have hosted those applications before. What are some of the lessons learned from hosting the SAP ecosystem of applications that you're being able to now transfer that to other enterprise applications? >> Well there are a couple of very key lessons that we've learned. So first of all, you're absolutely right in the sense that when you have that mission critical nucleus, all the things that sit in the ecosystem come along with it. And for us, we've always for years been able to run anything that runs on the x86 platform, so we're certainly not limited to any specific application set. But what we've learned actually over the years in dealing with that concept of the ecosystem, the peripheral systems, is integration. And not only integration in the sense of technically allowing those systems to talk to each other, but we find is when a client is looking to set up a new training environment, or a new testing or QA environment, or they're even leveraging the concept of utility and consumption, if you don't need that system active at night, then you should shut it down. And if you don't need it on the weekend, you should shut it down, but yet in a lot of these complicated systems, the way in which the integration comes up and which systems talk first and then second and then third, are very critical. So over the years we've picked up on things like that level of application automation, what we call landscape management. So you're not just managing a VM, you're managing an entire landscape, which you have to blueprint and then say, for that blueprint, if you're going to shut it down, what's the way of doing that that's fastest, but also runs the least risk of data corruption or other issues that can occur if you just, for some reason, fall out of sequence. So that's one of the very critical lessons that we've learned. The other piece of it is really around tweaking the environments where we've found that by analyzing the actual resource consumption of these apps, which we measure on five minute increments, it allows us to have a much better introspection, if you will, of that entire landscape. And so it allows us to predict whether it's at night or certain times of the month, you know if you're in financial close as an example, or for some of our very labor intensive environments that have warehouses or manufacturing, time and attendance systems that kick in at certain shift change hours. And being able to predict when they need the resources and allocate those resources accordingly. So these are some of the very critical lessons that we plan to take from our years of running and perfecting the art of running SAP and taking them to some of these other mission critical applications as well. >> Well, Kevin, again, great news that you've launched this week in a couple of respects. Glad to hear the show's going well. And just want to congratulate you personally, I mean, I always like having co-founder on the show. It's just, you build something from scratch and obviously it's worked extremely well, so congratulations on that. >> Thank you very much. >> John: I admire that, so good for you. >> Thank you. >> Good to have you, Kevin Reid from Virtustream with us here on theCUBE. Back with more from Dell EMC World 2017 in just a bit. You are watching theCUBE here on SiliconANGLE TV. (bright techno music)

>> Announcer: Live from Las Vegas, it's the CUBE, covering Dell EMC World 2017. Brought to you by Dell EMC. (upbeat music) >> Welcome back to Las Vegas, the CUBE's coverage of Dell EMC World. I'm your host, Rebecca Knight, along with my cohost, Keith Townsend. We're joined by Rodney Rogers, he's the CEO of Virtustream. Thanks so much for joining us, Rodney. >> Oh, awesome to be here, always is. >> CUBE veteran, a CUBE guy. >> A CUBE veteran. I was that top 16 thing that you guys-- >> Oh right. >> You know March Madness? >> Yeah. >> CUBE Madness. >> Yeah CUBE Madness, that was awesome. >> I think I made it to the elite, I think I might have made it to the Elite Eight. >> Who knocked you out? >> I know I was Sweet 16. >> Who knocked you out? >> I can't say that man. That still hurts too much. >> Oh, sorry, okay, I didn't mean to bring it up. I didn't mean to bring it up. But before the cameras were rolling, you were talking about how you accomplished the improbable by running these mission critical apps in the cloud. It was a mission impossible to run mission critical. How did you do it? >> Yeah, so when we started Virtustream in early 2009, AWS' EC2 was just coming into mainstream of I.T. awareness I would say. We took a look at what they did. They kind of made a market for creating ubiquitous access to the developers to develop cloud-native apps to run distributive scale type of applications. We were venture-backed, we were a startup, started from scratch. When you're an entrepreneur, you kind of need to build what you know and sell it to who you know. We were enterprise application guys. So we said we'd love to take this unique innovation and apply it to the types of application landscapes that we've grown up knowing and managing and implementing, and things of that nature. And so we specifically purpose-built software to run a cloud infrastructure as a service that focused on solving the engineering problem of IO-intensive scale-up applications. And what you have with those types of applications is IO-centricity as opposed to compute or distributive points of failure, distributive points of computing challenges that the general purpose public clouds are very well suited for. And so we kind of invented this software, we kind of melt the cloud into its molecular components so we could control the individual attributes. And it allows us to run public cloud economics because we're not bound by instant sizes, things of that nature. But it allows us to control throughput in a more acute manner to service the application environment. And that makes us the only guys that provide actually an application latency SLA for the apps to run on our cloud. And that's really critical if you go to a Fortune 500 CI and say put your mission critical, your spinal fluid apps, your order-to-cash apps, in production in a multi-tenant cloud, they've got to be sure that there's not going to be resource contention that'll actually affect and bring that business down. So yeah, we were kind of viewed a bit like we were crazy back then. And we stayed very determined. We were probably the least cool guys in the cloud. Nobody cared what we were doing five years ago. Now as you read in the press, everybody's pivoting towards enterprise. That's where the big adoption cycle is. And we are so confident in our IP and in our first move or position for this type of marketplace. We have an architecture that's purpose-built, software that's purpose-built, particularly for these types of apps. So we're quite excited about where it is today. >> Rodney, I want to get back to that, talking about how you were the least cool guys. But one of your claims to fame is that you helped realize two back-to-back unicorns. These are startups that start from scratch, that are then valued at over a billion dollars. >> Rodney: Yeah. >> What is your secret sauce? How are you able to see so far ahead? >> You know I think kind of, it sounds very basic, but one of the things you see in a venture-backed technology community a lot is product-centric initiatives, so building products for the sake of the product. We really focused on where the market demand was, right. So we saw emerging space in cloud automation. We didn't see that automation servicing what large enterprises spent 60 to 70 percent of their I.T. budgets on. So were just like the big legacy OEM guys that have dedicated hosts. We were kind of more servicing that. And we were like look, you know, last thing in the world needs is a subscale AWS. That'll be venture capital suicide. Let's go prosecute this opportunity and bring this automation, and compete more with the guys who can't compete with us. And so, I think we were back in four or five years ago there's been a lot of religious wars around cloud. It was public versus private. There's API standards, are you going to adopt AWS, there's OpenStack, build your own, things of that nature. And we were, there were many cloud purists. They said, if you can't re-architect, rebuild your app to run in the cloud then don't run it in the cloud, but rebuild and re-architect the app. You're talking about an SAP system at a Fortune 50 company, they've literally spend hundreds of millions of dollars, if not billions of dollars, that's not going to get rewritten, at least not in my business lifetime. >> Yeah, right. (laughing) >> It probably will eventually. And it'll morph into various SAS models. But there's a core part of the applications today, running any business, especially large enterprises, very well suited for what we do. So if there's a secret there, we stay. It wasn't a sexy thing. My co-founder, Kevin Reid, and I, we're kind of the apps antithesis of the Silicon Valley hipster. We were East Coast middle-aged guys (laughing) that focused on enterprise. It couldn't have been less interesting, I think, but we saw a prosecutable opportunity, we brought on some really smart people that wrote software. Cloud infrastructure as a service, you think storage network. It's not really about that, it's about the software that controls it, runs it, drives your feature sets. So we furiously wrote code. We were told we were going to fail everyday. And I'd go on to Twitter and read, 2010, 11, 12. We had no chance of competing with the scale guys. But we did, we created a software reason to exist. We got those economics, we run a much more utilized hardware state than anybody in the industry, much higher memory page utilization so we use that to compete with the procurement scale but we found a prosecutable margin, we're patient and we never pivoted. In a lot of the Silicon Valley language, pivot's an over-aggrandized word. When you pivot, you've generally made a mistake. We never pivoted. >> Let's talk about that focus. You guys were laser-focused on SAP. You say it's not sexy. I have SAP roots, so-- >> Rebecca: He's a geek, he's a geek. >> Yeah, I'm a geek. >> Yeah, he find a lot of, yeah. >> I think you're sexy. (laughing) >> So you guys did some amazing things with automating deployment of SAP. I would call you a COE, cloud of excellence for SAP. So talk about the maturity of moving from focused on SAP to what we hear today about Virtustream being for enterprise applications, not just SAP. Where's the secret sauce or the new advantages that customers can realize? >> So, we started with SAP because again, building what we knew. My co-founders and I had grown up around that ecosystem, so they knew the application very well. So there are two levels to our IP, one is the infrastructure automation, and that's actually agnostic to the app. We run thousands of apps. When you go run an SAP environment in the cloud, maybe 50, 60% of workloads are actually SAP. The rest are all the workloads for the supporting apps that satellite around an interface. The interface management gets quite tricky, you know, things of that nature. Ultimately, the second layer of automation is application control automation that we built. That is very application-specific. So there's a part of our core capability that can run any app, and we do very well with those apps that have that IO-centric challenge, just a different engineering problem. High IO apps place great degrees of memory burden on the underlying infrastructure, versus compute burden for scale-wide apps, generally. What we've now done is we've kind of built the foundation of the business along a horizontal line, we're kind of associated with SAP. >> Right. >> Because of heritage, and then for the application control that we've built, we've now expanded that to a number of different applications. And this week at Dell EMC World, we announced the healthcare vertical, we've gotten big into the federal and public sector, so we wanted to build a foundation using a horizontal technology, and now to really scale this, we're going to develop very specific vertical solutions. >> That's great, well Rodney, thanks so much. We're going to see you tomorrow night at the Gwen Stefani concert, you'll be dancing-- >> Absolutely, I wouldn't miss it. >> We'll both see you, I will say hollaback girl. >> Hollaback girl. >> We'll do a little-- >> We'll be on the tables. >> I will mime it. >> Awesome, awesome. >> Rodney, thanks so much for joining us. >> Pleasure to be here. >> Rebecca: Great to have you on the show. >> Awesome, thank you guys. >> I'm Rebecca Knight, for Keith Townsend. We will have more from Dell EMC World 2017 after this. (upbeat music)