>> live from Las Vegas, Nevada. It's the Cube covering E M C. World 2015. Brought to you by E. M. C Brocade and D. C. >> You're watching E m C World Live here on the Q. Looking Angles Flagship program. We go out to the event they start the season noise. I'm John Kerry of my coast Dude. Minutemen. Our next guest is a cube. Alumni have been on a cute many times before and back again. 2011 John Thompson is the CEO of Virtual Instruments and also the chairman of a company called Microsoft. Um, welcome back to the cubes. Nice to be about Great to see you in the A M World week didn't interview on Virtual Instruments with CEO, and we were really riffing on this whole idea of data instrumentation. And we it was really free Internet of things. So give us the update. What's going on with virtue Instruments here? I see Microsoft has a conference going on ignite. Even though you're chairman. The board. You're also the CEO of Virgin Instruments and you're gonna do some business here. What's going on? What business are you doing? Well, this is an important conference for virtual instruments. DMC is one of our strongest go to market partners, and candidly, many of their customers are virtual instruments customers. And so it's an opportunity for me to be here to spend time with our partners and our customers in one venue. Our business is doing quite well. We just had a very, very strong March quarter, which is always a little bit of a down quarter for most tech companies. But we were up 27 28% year over year for the calendar. Q. One so we feel pretty good about that. This is the most important quarter of the year, though, which is always the case in Texas. So we're hoping that we can knock the ball out of the park again this quarter. We launched our virtual wisdom for platform in the spring of last year, and it is gaining tremendous traction, certainly in the U. S. And around the globe. It is all about health utilization in performance of the infrastructure, and we've defined a model where you can look at an application inside that infrastructure, monitor its performance and its availability, and that idea is so critical in a world where everything will someday live in the cloud and will you will want to assure a level of performance and, quite frankly, a level of responsiveness to customers as they come on says it's a reset to share the folks out. This is not a new concept for you guys. We talked about this years ago. It's not like you woke up one boys. Hey, things is trendy. This data center in fermentation takes us quickly back. Where did it come from? Was an itch to scratch. What original product as you have and how does that morph into today's crazy, data driven world, where dash boring riel time is actually competitive advantage and now table stakes? Well, if you were to go back to the genesis of virtual instruments, we started as a small technology investment inside a larger company called Venice are that was trying to solve the inevitable performance problem in the fibre channel world. And as the market crashed in 7 4008 the team at Venice or had to decide, how are we gonna clean up our portfolio? And the result waas. They sold off the assets? Were we, in fact, created virtual instruments. So a small group of investors, led by Jim Davidson from Silver Lake and Michael Marks from Riverwood, helped to fund the original investment and virtual instruments. We've been at it now for about seven years. We have clearly evolved the product quite a bit since then, and we've captured a number of very, very strong venture capital investment so long away as we made the choice. That said, we need the shift from being a fiber channel company to be in an infrastructure performance management company because the inevitable movement to the cloud will drive an opportunity for us. Yeah, and you're a senior executive private equity. I mean, this is pretty much a big bet. There's a lot of money involved with private equity. So it wasn't like you're, like, throw in the Silicon Valley startup together. It was really like, Okay, there's big money behind it. Well, you guys, did you see it turning out this way? What? What was learning that have been magnified from that trajectory? Well, I think in the early days we thought the path was a little different than what we've actually followed. We thought the path waas that the fibre channel World was so big and it needed better visibility. This would in fact give the world better visibility in the fibre channel space. What we have observed, however, is that the entire infrastructure has become Maur and more opaque, and therefore you need to not just drive visibility in the storage layer, but across the entire converge staff. And so the platform that we have evolved is all about supporting this converged platform not just fibre Channel, but filed a storage not just VM where, but all virtualized server environments. And we believe that's, ah, multibillion dollar market. And that's why we were able to attract both private equity initially and venture capital later as we built out of product. It's interesting. You see some of these ideas come a come around full circle. I'm curious. Just in industry trend. Your your opinion on Veritas, you know, being spun out. It's it's It's both sad for me personally, but I think it speaks to how difficult the cultural integration might have been between the two companies. While I really had a vision back in the old four or five days of security and backup coming together, I think It was a really, really difficult thing to make happen in the context of what has evolved at Samantha, so the fact that they've chosen to spend it out, it's perhaps a little disappointing for me personally, but not a surprise. So what is your vision of security today? My understanding, You advise, even sit on the board of ah Lumia company. We've way we've talked to the company really, what's happening in security. So if you think about how security has evolved once upon a time, it was about protecting the device candidly and a cloud based world. It's going to be more about protecting the workloads as they move around. And that's one of the elements of what a lumia does, in fact, provide. Furthermore, I have believed for a very, very long time that as time goes on, security will have to get closer and closer to that which is deemed to be most critical. In other words, you can't protect all of the data. You can't protect all of the instances that air on the Web, but you can identify those that are most critical and therefore need a level of protection beyond what the standard would be. And so my belief is that companies like a Loom EO and others that will evolve will get closer to the workload, and we'll get closer to the data that's most critical. And so data classification and things of that nature will become much, much more important than they have. You're an investor in aluminum. You on the board are okay, so you're on the board of director and investor. We covered their launch. Great company. The cracking is low slides, as as Alan Cohen would say, they phenomenal funding round gone from stealth two years and now the big $100,000,000 really funding round massive guerrilla marketing. Still going on at the air say, was kind of clever. The perimeter lists cloud is a factor. And what tech enabled? Do you see the key thing? Alan Cohen described it as 1000 foot shoulds soldiers protecting assets because there's no more perimeter that no front door any more. What is the technology driver for that? Well, the whole idea behind the loom Eo, is to have a what I would call a portable policy enforcement engine that can move as the workload moves around the cloud. So policy management, security policy management has been a very, very difficult task for most large enterprises. So if I can define security policies for every server of where workloads can go to and from on that server and make sure that nothing violates that policy, hence I enforce it routinely. Oh, I can change. The dynamic of House security gets delivered in a cloud based world because no workload is gonna run in any single place on a cloud world. That workload is gonna move to where there is capacity to handle. I gotta ask you because we have a lot of people out there that follow tech business test tech athletes that you are. But also, you're a senior executive who has a lot of experience, and we could be presenting to Harvard Business School, Stanford Business School. I want to get your kind of business mind out to the audience. And that is, is that as an executive who's seen the big, big companies, the big battleships, the big aircraft carriers, from the IBM days to the M in a world of the nineties and the transformation of the Internet now in a complete shift, an inflection point with things like a Loom, Eo and Cloud and and Virtual instruments and the new Microsoft and the Silicon Angles and the crowd shots out there, What do you advise managers out there to operate from a management perspective. I mean, there's a classic business school numbers quarter on the challenges of going public, managing enormous dynamic technology change. So every theater is kind of exploding the technology theater, the business theater, the social theater as an executive. How would you advise someone as a CEO are rising growing startup how they should stitch themselves together? If you can draw in from previous experiences? Or is there a pattern recognition you can share? Well, it's It's never simply about the numbers, while the numbers air always important and the numbers will always be the underpinning of evaluation or whatever. In reality, it's about having a team that is able to rally around a leader with vision that says, Here's how we're gonna change the world. Here's how we're going to make an impact as this industry goes through, the natural inflection points that it always does. And if you look at what has occurred in this industry about every 8 to 10 years, something significant changes. And so a company that may have missed an opportunity six or eight years ago has another shot at it six or eight years later because of the inflection points that we go through. So it's important for the leader of a company toe. Believe that I can change the world based upon the industry that I'm a part of and have a compelling point of view about what changing the world means for that company and that team. And if you could get the team together around that idea, what about cloud and big data and mobile thes dynamics that you would? If someone just wants a roadmap for navigation or what decked me to go after, What would you say? What do you say? You know, get it all in the cloud or go poke at a duel are indeed new, agile management. Things were happening like, Well, I think it starts with what are the court confidence is that you have as a team or company, so you can't say g I'm gonna go and do cloud and oh, by the way, I have no confidence in the management infrastructure for large enterprises or I'm gonna go do mobile and I really have no experience in the mobile space whatsoever. So core competencies matter and leveraging the core strengths of the company matters now. Oftentimes, what companies will do its supplement their core strengths through M, and we'll go out and acquire something and bolted on the hard part of M and A, which is what we were referencing early around. Veritas is Can you integrate it? Can you really make it work after you bought it? Buying it is the easy part. Generating it and making it work is the really, really tough part. And arguably we didn't do is good a job as I would have liked with Samantha. And so basically you're saying is if you as an executive, you want to look at the winds of change for hand, get the sails up, if you will, to confuse the metaphor and get into that slipstream so you can actually drive and you can't. Being an amateur, you gotta actually have some competency. You have a leverage point. Look, one of the great things about this industry is it doesn't take some brilliant business leader to create a new idea. I mean, no one ever would have viewed Zucker Bird as a business leader or some of the young, really, really powerful CEO built phenomenal, phenomenal companies in this industry. But they had an idea, and they were able to create a team around that idea and go change the world. And that's what's so powerful about this industry that I've had the pleasure to be a part of for 40 some years. Yes. Speaking about CEOs that changed the industry, John Chambers announced that he's stepping aside from the CEO role this morning. So you know when you look back, you know John was one of the four horsemen of the Internet era and 20 years there. Chuck Robbins is coming in. He's been there since C. I think 97. What do you think of that move? And you know what's happening with Cisco in leadership for the big companies? Well, John's a really, really good friend, and I admire him for all of what he's done and Cisco and I wish him well as he makes this transition. Interestingly enough, the transition is to executive chairman, with the new CEO stepping in so What that says is that John plans that have a little more involvement, perhaps in what goes on in the company. Then I do it. Microsoft. My title is not executive chairman of Microsoft. Thank goodness I wouldn't want it to. But it also speaks to the fact that John spend the CEO. It just goes since 1995 like that. So he has an enormous amount of knowledge and insight about the company industry, its customers, partners, culture, all of those culture. And so all of those things will be valuable and important to the new CEO. And I think him stepping into that role is trying to leverage that. Cenedella came in and made his voice heard really instantly. And Microsoft has been a great company to watch, you know, since Auntie's came on board, you know, just Cisco need to make some bold moves or are they pretty stable where they are is kind of the dominant? That's a better question for John and CEO. I think what is clear is that all all companies, at some point after find a way to redefine and Sasha's role at Microsoft. He has redefined Microsoft as a cloud first mobile first, and that's all about recognizing. Were acts are gonna run on what devices and what kind of service is. And that redefinition, I think, is important for any industry leader, regardless of how long you just brought us to the tagline of this show, M C World is redefined. So any comments, How's the emcee doing it? Redefining themselves, I think the emcees a terrific company. Joe's a longtime friend of mine. I mean, I know Joe forever on. It's been amazing to see how it's gone from being a storage company to this federation of companies that have capabilities that are so broad and so diverse. I hope they don't get pushed to do something that isn't in the best interest of customers, but maybe enamored by some investors. The angel of the activist pressure. Yeah, that's always and that that's unfortunate, but I think they have a nice balance now. They have a huge installed base and this competitive pressure so they gotta push that. But I have to. I have to ask, is that? You know, I was getting some tweets earlier about Microsoft, and I know you, you know, you're only chairman of the board executive chairman. But you were involved in a very historic where you were on the executive search committee for the CEO replacement for Steve Balmer, of which they chose sake. Nutella Cube alumni We interviewed at the XL Partners Innovation Summit in Stanford that that's about culture. That's about transitions, about inflection points. And Sister used to mention Cisco. Not similar situation. But Microsoft is the legend company. I think the computer industry like an apple. Microsoft was their big part of the computer revolution. Big seismic changing. You were right there. Just share some color on what that whole experience like for you personally. And if you can share any insights to the audience, I know it's a sense might be sensitive topic. But what's that like? And, you know, the outcomes. Looking good. As he says, he's doing great. What? What can you share? Well, I think it would be fair to say that it was a more consuming process than I ever thought it would be. I went from being a new board member of Microsoft in the spring of 2012 to be in the lead independent director in the fall of 2012 to leading the search starting in the summer of 2013. I mean, I never could have imagine my involvement there changing that dramatically, Nor would I have imagined that searching for a CEO of a company would consume 80% of my time when I was also running a company. So for a period of about six months, it's like athlete right there. I had two full time jobs where I was on the phone all day, every day, trying to get something done for the eye and on the phone all day, every day, trying to get something done for Microsoft as well. It was, I would also have to say and incredibly incredibly exhilarating experience. I talked to some phenomenal leaders from around the world way had hard, long look anywhere we wanted at any CEO or candidate that we wanted, and we settled on someone who was a Tech athlete. We believe that the company was at a really, really important inflection point where over the course of the next 12 to 24 months, we're gonna have to make some really, really important technology decisions that would set the course from Microsoft for many, many years to come. And so, while there was much speculation in the press about this person or that person, and what a great business leader, that person waas What we, as a board concluded, was that what our company needed at that moment in time was a true technology visionary who could drive the strategy of the company because it had assets. I mean, they had a whole search thing that they quote missed on paper. But they had, like you said, they could come back at it again with being the subtle art of assets. Here, Cloud was built out. Everything was kind of like in place for that tech athlete on. And I think soccer has done an amazing job. I'm quite proud of them. I'm happy toe say I have some small part in that, but I'm or happy for the way he has executed in the job. I mean, he steps into the job with a level of humility but confidence that is so important for the CEO of a company of that size, and to maintain that cultural DNA because you have one of most competitive companies on the planet. A question to the point where they had to be almost broken up by the DOJ from the Bill Gates kind of DNA and bomber to continued, be competitive, live in this new era. Really tough challenge. Well, he's he's a bright guy. He, as I said, has great humility and has the respect of the team. And it's been interesting to see the internal shift behavior and attitude with a guy who I jokingly say he has two ears and one mouth and he uses them proportionately. And that's a very important lesson for someone trying to transform a company. You must listen more than you talk, and I think he does a great job. We try to do that. The Cuban we talk all day long way do interviews, but I gotta ask you back to virtual instruments. Okay, gets a good business going on with the emcee Goto partner about the anywhere in the federation of a partner with you as well, say, Is it all Federation? It's mostly through E M. C. And while the em wears of small V I customer, we don't do much with them on the go to market side on the go to market side. We rely more heavily, if you will. On AMC, that partnership has evolved. I mean, from the early days it was viewed as G. We're not sure who you are and what you do and whether or not you're competitive with us today, we have very, very common go to market processes around the globe. I'd love to see them stronger. I just left to cheese office in San GI Joe. We could doom. Or but when it's when it's all said and gone, this is one of the strongest go to market partners we have that's also shared the folks out there what they might not know about insurance, that you could share their hearing this now for the first time and working on the radar future of your business, your division product, extensive bility. Future of Internet of everything. Future Internet of things, whatever you want to put on a big data and the data center now, and the migration of cloud is all here. So at our core, we believe that every large enterprise will inevitably have some, if not all, of their work in the class. So the question is, how do you help them manage that inevitable migration to the cloud by de risking the migration and ensuring appropriate infrastructure performance management. Once you arrive there, we focus on the largest enterprises in the world. So unlike many tech startups, that will start with a midsize or small company and work their way up well, the largest banks in the universe, the largest insurance companies in the universe, the largest of every sector in the universe is a customer of the eye or will be someday. And that notion of solving very, very complex problems is something that our team has great pride in our ability to do that I want to get philosophical with you. You can for second kind of sit back and, you know, have a glass of wine and kind of talk to the younger generation out there with all your history on experience. How great of an opportunity for the young entrepreneurs and CEOs out there right now. Given the the confluence of the shift and inflection points, can you compare this to an error? We on the Cubes say It's like the PC revolution bundled in with the clients, terrorists and the Internet. All kind of at once do you agree? And would you say it? Guys, you have an amazing opportunity. Well, I think example of just how crazy it is. I I was driving to the airport this morning, and what I thought would be our long drive took two hours. Because there's so many people on the road in the Valley going to work. There's just so much going on in Silicon Valley right now. It is amazing. And for anyone who has a really, really great idea, the thing that's equally amazing is there's lots of capital out there to support those ideas. And so I would encourage any young entrepreneur who has a thought socialize your thought, Get it out so people can learn about it and then go get money to support and back that though. There's lots of money out there for good ideas. Lots of money. \ewelry officially taking the time coming out. Your busy schedule. CEO Virtual Instruments, chairman of Microsoft Here inside the Cube tech athletes is a big deal. You are one of the great great. Always have a conversation with you, sharing your thanks so much. Just the Cuban. Be right back with more insights and the signal from the noise at this short break