>> Narrator: Live from the Mandalay Bay Convention Center in Las Vegas, it's theCube, covering VMworld 2016. Brought to you by VMware and its ecosystem sponsors. Now, here are your hosts, John Furrier and Stu Miniman. >> Hello, welcome back everyone. We're live here at VMworld 2016 in Las Vegas, the Mandalay Bay Convention Center. We're actually in the hang space, broadcast booth It's theCube's SilliconANGLE's flagship program, we go out to the events and extract the signal from the noise. I'm John Furrier and my co-host Stu Meneman, our next guest, Pat Gelsinger, CEO of VMware. Great to see you again. Every VMworld, every year that we've done the VMworld, you've been on theCube. >> Well, it's always a pleasure. You guys are fun. You do your homework. I enjoy our time together, and I can't imagine VMworld without theCube. Look, we are really impressed with the vision you've laid out, because the number one question we get asked on theCube and in backchannels like CrowdChat and Twitter, is VMware ecosystem is looking for the straight and narrow, they want that, they want to see the path, the 90-mile stair if you will, so they can actually accelerate their business. >> Pat: Yeah. >> Can you laid that out, and just quickly review what your key points were for the folks that didn't capture the full keynote. >> Well, clearly we said, boy, we gave clear data with regard to what the cloud market looks like, what it's going to look like today, 2021, 2030, crossover points, and really the key summary of that is it's a complex world. It's going to be a multi-cloud environment for our customers, and they want to know, how do I not only build hybrid clouds, private clouds, and how do I take advantage of public clouds? And we gave a comprehensive view of what that looks like, the cross-cloud architecture. Here's a way that we can bring all cloud embodiments into a common framework. Cross-cloud architecture, two big components are part of it, build your private cloud, enable that as a service, that's a cloud foundation, bring it together, vSAN, vSphere, NSX, along with new lifecycle management capabilities, making that easy, do it as a service with IBM and our partnership that we announced there, but we expect many more of those with other vCloud Air Network partners, and then the cool new Cross-Cloud Services. Make those available, embrace any cloud, and then give our enterprise customers the tools to manage in this cross-cloud or multi-cloud environment. >> John: What's the catalyst for this announcement? Was it an epiphany, was it more that the market was ready for it? Because now, multi-cloud, but how you talk about it, any device anywhere, that's been the previous message. But now it catalyzes around this positioning. What was the moment of truth where you said okay, this is, we're going with this. It doesn't seem like you're betting the ranch on this, but it is betting the ranch on this in a way, because this is, as you said, the future, and it's going to be mostly your journey. So why did it come together? >> A couple of things happened. If you remember last year's VMworld, we did this little NSX demo where it says, we can connect NSX onto the cloud, you remember that? >> Yeah. >> Literally, Guido comes into Raghu and I, about two weeks before VMworld last night, and he says "we've got to work it. And can I demo it in my session?" Right, at the thing. Raghu looked at each other and he says, "Okay, let's do it. Let's see how people respond to it." So that was one catalyst. The second catalyst, we had a couple of customer meetings where the customer said to us, and he says, "This is my best. I'm doing this on Amazon, I'm exploring Azure over here, I've got a boatload of VMware, I'm doing this many- help me solve these problems. So it was clearly customer feedback, and there's a vibrant response we had from this little last-minute demo that we did at last year's VMworld, and sort of out of that, we said, "Let's really take this seriously. Let's go dive deeply into it." And as Guido said in the keynote, we've now talked to about a couple hundred customers and a huge response, and some, you know, usually when you do a cool new product, people say let me try that. In this case, the response we've gotten is, I need that now. I mean, it's a very definitive response. These are the kind of things I need to manage today's problems, so I guess Guido's already late in getting it done, so I've got to crack the whip harder and get this in the market. >> So it's not so much retooling, though we did talk about yesterday at the things, you're kind of mid-flight but you're adjusting to the market. >> Absolutely. Absolutely. And clearly our cloud journey's been one where, you know, if you go back and I gave some of the data 2011, no one expected the public cloud to be where it was, where it is today. I mean, it clearly accelerated faster, some of the ease of use, efficiency characteristics, hey, this is a capability that nobody quite expected to grow this rapidly. And it's now permeated Enterprise customers who are starting to take advantage of it. But they don't have the tools to really take advantage of it. >> So some key leads we were reading yesterday in your keynote, you know we always like to read between the lines, kind of like the messaging inside of it. >> Sometimes you get it right, sometimes, you know. >> We get it right most of the time. Your comment, your sit-down with Michael Dell was really interesting, okay. Because this is an open ecosystem play. His first point was about open ecosystem. You've been banging on this from day one since you've been CEO of VMware, since the throw of the first pitch of the NetApp event that got viral with that jersey on. >> I went to the NetApp customer partner event last night, every year I'm there as well. Just like theCube, I go to the NetApp event. >> He could say that you have been hardcore about open ecosystem from day one, and with the merger now set for the 7th, the merger that you can transact on the 7th, you still want to be independent. The open ecosystem is super important to you, and Michael, I heard it right from his mouth. Share some color on why and how that's going to evolve. Will everyone have untempered access to VMware, will all partners have the same level of access and visibility? >> The simple answer is yes. We're going to continue exactly on that strategy as we go forward. And clearly I'm going to do more with Michael and the Dell team, you know, as we see that going forward. But it's incumbent upon us, even as we do more with Dell, that we lean in more aggressively to our HP, to our Lenovo, to our Fujitsu, and our other partners as well. So we see that as a critical part. And I say the VMware ecosystem is evolving. Five years ago, would you have had the cadre of security and networking vendors? No. Would you have expected to have all the system integrators? No. I mean, we're clearly expanding. Service provider partners, our ecosystem has broadened our product portfolio, it's becoming a broader statement as well. So that's a commitment. We're going to remain a platform play, an ecosystem play, and obviously, with Michael's comments onstage, he's cheering us on. He's saying, I'm going to grow my business with VMware faster, and I hope all of the other ecosystem partners grow faster than I do. >> Is this going to be a persona change? Because now, if you look at VMware's ecosystem, which has been robust, there's some good salivation going on, there's a change-up as the ecosystem shifts. vCenter was once the big thing, now you've got NSX and all this other stuff in the cloud. Is there a persona changeover in who the target customers are in the ecosystem? >> Well, clearly, I mean, the customer's the same. It remains sort of that IT buyer, which increasingly, as I talked about in the keynote, is becoming a business buyer, but it's that core IT Enterprise customer. We're not a consumer company, we're not an app company, we're an infrastructure company and we're going to satisfy that broadly across the industry. >> John: Yeah. >> But in that context, I mean, look at it. You know, over here we have the Internet of Things. Wow, you know, we have the NFV zone. We're having a broader and broader set of who is our ecosystem, and that's absolutely going to continue as we go forward because solutions to things that we do are permeating more and more of the entire business landscape as we go forward. It's a really fun time. You know, even though I like to joke with Michael that he was younger when I first met him. And against that, you know, he and I have both been at this for over three decades. But in many regards, it feels like we're just getting started. It really is a fun period. >> So Pat, the management suite has been a challenge for the industry in general. VMware has, as John said, strong presence with vCenter. As you start reaching out to some of these environments, why does VMware kind of have the right to think that it's going to be at the center of this discussion for some of your customers, especially as they talk about like Microsoft, they've got strong pieces there. Big partners like Intel, Amazon in the play, so why VMware? >> Well, I think there's a couple of aspects to it. And, who is better to be a neutral player, to enable people to have cloud freedom? Right? If you just start with that question, and we'd say hey, we enable people to have hardware freedom. It's in our ethos to have this platform play, to have a broader ecosystem, open APIs, it's what we do. And in the cloud world, hmm, Amazon, okay, they have a legitimate role. But are they going to be the best ones to do private and public, or enable Azure or AliCloud? I think we have a very legitimate position there to say, hey, we're a neutral player, we can be cross-player, cross-industry. Secondly, the technology assets that we have, what we demonstrated on stage yesterday with Guido, think if you didn't have NSX and vRealize and some of the storage assets? That was many, many years of engineering and we pulled all of those pieces together for a comprehensive demonstration of all of those pieces in nine months. That's because we have a rich set of technologies that we can bring to this Cross-Cloud Services. >> So VMware's got a pretty sophisticated stack there, lots of customer options. When we look at the cloud native states, things change a lot. You've got a lot of open source in there, most customers don't buy shrink-wrapped software, they take a lot of components, they tend to put some things together. There's been a little open source, but we've talked for many years about, open source isn't one of the primary revenue drivers for VMware. It's not kind of core to the business. Is that changing? How do you keep making money in the open source world? How do you compete? >> I think there's two different aspects to that that I'd like to, you know, one is, essentially our strategy is, enable these new environments on the VMware franchise. So what's my revenue model? I'm going to keep selling vSphere, I'm going to sell NSX, I'm going to sell vSAN, our management tools, et cetera, even as I add more open source components into those environments. And hey, I'm pretty happy. What's the price point of it going to be? It's free, if you're an Enterprise Plus customer. We're just adding it as another set of capabilities on top of it. It's all open source bits, you've, you know, Stu, have you downloaded it yet off GitHub? >> I have not. >> Pat: You have not? I'm disappointed to hear that. Get on it, right? Get back to work. >> You've got to code tonight, Stu. No party. >> Right? You know. Too much partying for you, Stu. But it's going to be available. We're engaging this open source community, in an open source way, but we're adding our industry rock-hard components, and that's important. Because enterprises are going to start deploying containerized applications. And then you're going to start asking questions. Are they secured? Are they managed? Do you have, like it said onstage, are they monitored? How are you going to network them? And all of the sudden, it's not going to be some lightweight stateless application, you're going to start saying, this is a better way to do stateful applications. What about resilience for that? Get back to the rock-hard questions that infrastructure guys know how to handle. So this is a way to saying yes to those problems but also saying yes to these cool new developer things as well. And in our sense, you know, we think we're well-positioned to go do it, but hey, some of it may be open source projects, and hey, we're showing that we're going to support those, we're going to deliver those, we're going to embrace those as well. So I'm sure that we hired Dirk Hohndel, a longtime friend. I hired him before at Intel, so now we brought him over here to VMware. Because we clearly see, we have to enhance our position overall in the open source community. Not a strong point for VMware in the past, and we're quite committed to changing that perception going forward. >> A lot of great code in the open source, but you mentioned those things about the infrastructure. I want to get back to that point. Those complex things. Automations now playing a big role, we saw the demo today with vSAN,Yanbing was just, one push of a button, a lot of policy, automatic policy automation, that's a great direction. >> Pat: Oh, yeah. >> So, I like that direction. But now I want to bring that back to Cross-Cloud. NSX with security and automation, and protection with the vSphere and then Cross-Cloud. How do you look at this? Because I know you're a strategist, so I think we'll get the strategist angle here. It's like the inter-networking data, I was riffing with Stu earlier about inter-networking has spawned because of all these networks needed to be connected together. And that became >> A whole industry. >> A huge industry. A lot of wealth created, a lot of innovation. Inter-clouding, or Cross-Cloud as you call it, is that dynamic. How do you play well? IBM's onstage, there's no Amazon onstage. I didn't see Microsoft. Are we going to see the other clouds come in to the fold, or are you going to go to them and partner with them? >> So let's, you know, one of the architectural principles of Cross-Cloud is public APIs. So I'm not requiring any unique support from Amazon and Azure, and that's an important statement as well, because now I go to a customer who's taken advantage of Amazon, and they can look at some of those Cross-Cloud Services and then says, well, what if Amazon doesn't support you in the future? And we say, these are standard APIs. They're supporting hundreds of customers on those APIs. It's important, right, that we're engaging with, I'll say, the way that the cloud is being presented to customers and giving them better tools to manage. Now that does not mean I'm not going to do more work in integrating more deeply and partnering with them. >> So does that support like the Amazon S3 API then? >> Pat: Of course. >> Okay. >> John: Well, Sling API's a little bit different. >> Management APIs is actually more appropriate to look at it in that respect as well. How do you spawn, how do you stop, how do you manage VMs, how do you do availability cells, those are the things more appropriate to a management tool in that regard. But those are public API, public interfaces, we're taking advantage of all of those. And we are going to work more closely with the Azures and the Amazons as well, we're going to invest in those partnerships. And there may be areas that we compete with them, but we're going to go do as much as we can, because that's what our customers are asking us to do. Give me better support for those environments, which workloads can I put there? Can I network? Can I secure? Maybe in some cases I don't want my groups using nonpub, or non, you know, multi-cloud APIs. Another case is, hey, I am fully comfortable saying, >> Pick the right cloud for the job kind of thing. >> Absolutely. Right >> Is your philosophy. So slinging APIs is pretty trivial relative to interfacing with the cloud, but the customer might want to go deeper, and, because that might create a complexity issue around, and also functionality might not be as robust as, say, deeper stack integration for data management and whatnot. Are you worried, or we're watching, certainly, like Microsoft, if they feel the proprietary aspect of their stack around data for instance, that's the holy grail, it can get sticky, but still be quote 'open' but not proprietary. >> Yeah. >> So the lock inspect is the lack of openness, per se, to say with data. >> And by the way, you know, I mean, in that respect, what we want to do is present to customers the tools that they can manage those decisions. For instance, a customer may say, hey, I love that machine learning API that Google offers. It's giving me a great competitive advantage, it's not available on any other cloud, and we're going to say, hey, it's proprietary API, if you use it and your data's there, you've picked that service, but we're still going to help you manage and secure it. Another workload, the customer might say, Hey, this workload, I want to make sure has multi-cloud landing zones associated with it. So we're going to help him manage those decisions as well, because if you stay in this domain, I can make it run anywhere, I'll be able to do cross-optimize it, maybe geo-optimize it, et cetera. So it's giving them the tools to manage those decisions. Because I think, hey, you know, Microsoft, they're going to do really well with things related to collaboration of 365. I think Google, I think they're going to do really well around data machine learning. IBM Enterprise, great cloud. Amazon, hey, they've won this round of the developer cloud. Each of them has sort of staked turfs that are very clear, they're going to present value to customers, and our view is, we're going to make those all more readily consumer, suitable for enterprises to run, manage, secure, and connect their workloads into those environments. And build the connectivity into their private clouds, their vCloud Air Networks, their manage clouds as well, that's what we can uniquely do. >> Amazon is going strong in the enterprise. I agree they've won the developer cloud, but they're aggressively going after the enterprise. Mainly Oracle for now, but I'm sure they might think about speech ed that you have. >> Oh, sure. Sure, absolutely. But, you know, in that space, moving a lightweight application, okay, done. Right, you do an OEF conversion, you're done, man, you sell it like that. Oh, you've got to move the full network configuration, IP address ability, right? I've got to deal with different- oh my gosh. Those are hard things to do. The easy stuff moves pretty easy. The hard stuff, okay, that's where we're at now as we address Enterprise customers, and you just don't pick those up and relocate those onto Amazon, Azure, or anyplace else. You know, that's really where the strength of VMware lies. >> So Pat, Dave Vellante is, you know, just at this point, he can't be here for the interview, so I'm a surrogate for him. >> I refuse this interview, not having Dave here. >> John: He says, Pat, I love you forever. That's what he says. >> He asked me to have your commentary on the new era of IT. Officially announced today, the Dell EMC deal, September 7th it will go down, you know, of course that has ramifications on VMware. HP split recently. Lots of, I mean, major signal changes to the industry. What's your take? >> Yeah, you know, as I described before, this is a very disruptive period of the IT industry. Consolidation of portions of it, we think as the hardware industry has matured, stabilized, you know, not growing, still cashflow rich but not growing, we think consolidation is a very natural phase of that industry's maturation. And against that, the Dell move, it's a very bold move given the size of it, but if you look at the cashflows of the companies, as Michael says, it's pretty easy math. It wasn't that hard to, you know, this is how much the cashflow is, this is how much the debt payment is, the math works. Do the deal. >> And Michael said, if you don't understand that VMware is hugely important to that, you don't understand the math. >> Right. For that, you know, clearly, having a controlling interest there, he gets it. We have a lot of growth potential as well, evaluation increase, potential strategic role, but he also realizes that the independence of VMware is critical as well. A software company is very different than a hardware company and our position in the industry, the ecosystem, he respects that greatly. We also think that we're far from done with disruptions elsewhere. We just saw Rackspace go private. Wow, you know, that's another structured shift. Changes in the structure of Citrix as a company, at Five, as they go through their transitions in this next phase of growth, Palo Alto, a good friend Mark McLaughlin, they're driving their software and service revenue growth from hardware. Lots of changes in the industry. Collectively, we look at those and we say, boy, this period of change, disruption, radical growth, consolidation of different places, VMware sits now at a very stable and comfortable place. I've got a great battle sheet, I've got a clear path in front of me, going back to the beginning of the interview, and, right, behind my battle sheet, is this huge turbo-charged engines that is cheering for our growth, distributing us, and even a bigger battle sheet behind us. So we sit in a very uniquely wonderful position. >> I have a final question for what a great, I know you've got another point, and thanks for, first of all, thanks for your time again. What's the biggest disruption that you're watching that's motivating you, whether it's lighting a fire under your feet, or just something that you see that's so epic, and get out for that next week, as you said, if you're not out for that next week, you're driftwood. >> Can I give you two? >> John: Yeah. >> So the one that I think is clearly the biggest is the shift to the public cloud. And I'll just say, that's why the Cross-Cloud announcement was so critical. Also, I wanted to demystify some of the numbers in the keynote. So we went out there and said, very specifically, this is where it's going to be, SaaS, and IaaS, and where it's going to be at different points in time, because I think there's been all sorts of numbers floating around the industry of what it's going to look like over time. But clearly, this public cloud's becoming a big deal. If we have to present ourselves as relevant and critical to our customers in that transition, so I'll say that's the one that we have to navigate through to really position VMware for the next couple decades. The other one that I point out is really, as we talked about, the IoT and the device picture. Wow, we're going to have more machine-connected devices in 2019, >> Love that stat, by the way. >> Than human-connected devices. And that presents enormous business opportunity, right, security threats and opportunities, data infrastructure to go with it, IT, as I would say, IT has left the nest. It's now permeated, >> And software's, a primary function of all the new software that has to be written to handle those situations. >> And in that sense, you want to say, even though I'm three and a half decades in the industry, it sort of feels like we're just getting started. >> You had a spring in your step until you had a cast on it, so you still, you've got to be careful you don't break down. As you get older, your bones get a bit more hard to recover. >> That's right. >> Pat, thanks so much for spending the time, great to see you again. >> Always a pleasure. >> Pat Gelsinger, inside theCube, here in VMworld 2016 in Las Vegas. >> Mr. Vellante must be here next year. >> Dave, man date. Stu Miniman and I, Stu, you did good. You held your own. Pat, as usual, great. This is theCube, you're watching theCube at VMworld, I'm John Furrier and Stu Miniman. (techno beat)