>> Announcer: Live from Las Vegas. It's theCUBE! Covering VMworld 2017. Brought to you by VMware and it's ecosystem partners. >> We're back. I'm Stu Miniman here, with Justin Warren and this is theCUBE, SiliconANGLE Media's broadcast of VMworld 2017. We're the worldwide leader in live tech coverage. Happy to welcome to the program a first-time guest, Russ Reeder, who is the President and CEO of OVH. Russ, thanks so much for joining us. >> You bet, Stu, thank you. >> Alright Russ, so, those of us who have been coming for VMworld for years, said, you know, "VMware, their Cloud strategy, what a mess. "vCloud Air, total failure." Now, I think you might have a slightly different viewpoint on some of that dynamics. For an audience that doesn't know, OVH was a predominantly European Cloud-hosting provider, part of the vCloud Air network, if I understand. Tell us what brought you to OVH and what's your story on the whole vCloud thing? >> Sure, OVH, we're one of the largest infrastructure providers in the world. We're the fifth largest and we're the number one partner for VMware over in Umia, right? And so, I guarantee if Pat Gelsinger was here, you wouldn't have thrown vCloud Air under the bus so hard, but it's a great opportunity. >> He'll be on tomorrow, let's see. >> So vCloud Air's a great opportunity for VMware, kind of, launching it, working with it. Some of the top enterprise customers in the world, some of the biggest of VMware are launching a Cloud strategy. But, VMware is more of a software player rather than an infrastructure player. We're one of the largest in the world. And so when VMware called us and said, "Hey, one of our bests in Umia, "we know that you're coming to the US. "We think there's a perfect acquisition." So when I sat down with Pat and talked about the acquisition, we said, look, we're about ready to come into the US with all of our force. We have 27 data centers around the world, we're an 11 terabyte network, three terabytes of DDoS capacity. And we're coming here with scale. And so, if we can add in to over 200, close to 300 employees that understand the space and about a thousand enterprise customers that are committed to VMware solution and then really care about great tech, it's a match made in heaven. >> Yeah, what can you share? How many customers did you get for that? And since OVH took it over, where are things? What momentum do you have? >> So we have around a thousand enterprise customers. Some of the biggest names out there. And so, a lot of those are the biggest names for VMware. With that, we took around 250 employees, globally. So we now have the global, vCloud Air infrastructure, personnel and customer base. >> So with a thousand customers, Stu, you'd sort of call that an abject failure. So clearly there's some people who do like it, otherwise you wouldn't have managed to sell. >> There's significant business here and they're really important customers to VMware. >> Yeah, so what is it that those customers really like about the vCloud Air solution? >> So what they like, just about... First, it's VMware, right? So they really love the flexibility that VMware solutions give them. With vCloud Air, they went to it to have more of a no vendor lock-in, more of a portable solution where they can migrate VMs from on-prem to off-prem and be a part of the Cloud. And so what they're excited about now with OVH is going to a provider that's... We're very well known for high-performance, great network, at the best value. And so, coming to the US, what they care about is, the US is 58% of the world market in Cloud hosting. Very large market, 58%. And you have a number of very large hyperscale Cloud providers. And OVH is the largest Cloud provider that no one knows about in the US but everyone knows about us in Europe. And so the customers now are super-excited about bringing that technology and we've really reinvented the whole infrastructure, Cloud-hosting market. And bringing that new technology and the green technology into the US. >> Russ, we've been watching this Colo data center business, seen a number of companies that have kind of exited. You know, think Rackspace, how they've changed. Verizon, what they've done. I've talked to some of your team at the booth here at the show and they're actually excited about talking about the way OVH builds data centers. Can you bring us inside this because some people look and they're like, "Oh, if you're not spending "five to 10 billion dollars a year, "You're probably not in that business." Once again, OVH, I think, has a slightly different viewpoint on that. >> Yes, so we were founded by Octav Klaba, who's an engineer. Network engineer who started building, hosting websites and then started to build their own servers. And so, now we are vertically integrated. We build our own servers. We build all of our own DDoS equipment. We build our own data centers. Our servers are water cooled and we have very strong R&D relationships with Intel and AMD. It allows us to crank up the processing speed. With our data cooling capacity, 30% of the data centers are cooled by natural air. 70% are cooled by water. So, when other very large, well-known companies are out there trying to put data centers in Alaska and sinking them in containers, we have it figured out at scale. We have 27 data centers around the world. We're investing 1.5 billion dollars in the next three years to have over 50 data centers. So, we're doing it at scale and our data centers are, not only, more high performance but, 50% more cost effective and we give that cost savings directly back to the client. >> Russ, one of the things, when I talk to customers, if you ask them about their Cloud strategy, sometimes they say hybrid Cloud, sometimes they say multi-Cloud but, whatever they say, their strategy is different for every customer I talk to. Some are actually federating or splitting up applications between different environments. Others are workloads depending on where they have... What are you hearing from your customers? What are the types of applications and I know it depends and it varies greatly but, where is it that you have the gravity of where customers are going and how do you fit into the broader ecosystem? Amazon is the elephant in the room. I think the booth next to yours, if I recall right. How's the dynamic work? >> Unless you're a very small business, you need a hybrid Cloud strategy. If you're only in one Cloud provider, you should be very worried. We've seen multiple attacks. Any kind of failure, right, so hybrid Cloud strategy, from even a medium and definitely enterprise, is where they already are. Even if you're going to create a brand new application, that data is going to be somewhere else, whether it's on-prem or whether it's in another data center, Instantly you have to think about hybrid Cloud. Right? We're kind of in that third generation of the Cloud. First generation was Rackspace, do it for me. Second generation was AWS, I'm going to do it. And now third generation is like, whoa, I just can't be in one Cloud provider. I need to have multiple cloud providers so, based on my workload, I need high performance servers. Where can that go? I have a lot of traffic in my ingress, egress and so, what Cloud provider should I use there?" And, so, now you can pick and choose workloads and then also your disaster recovery. You obviously should have that, not just in a different data center, but with an entirely different partner. >> Question on what exactly is hybrid Cloud? Because early on when people were talking about it, well, hybrid Cloud means I'm going to have some onsite and I'm going to have some in the Cloud as well and we have the idea of the Cloud bursting, where it'd be basically the same application and I'd have part of it moving to the Cloud when I needed it to and then I'd turn it off. But people who tried that found out that's actually really, really hard. It seems to be that people are more choosing that, I'll put this application onsite and I'll put that application in that Cloud and I'll put a different application over here. Is that what you see customers doing and what does that imply when we have features that are available in one Cloud that aren't in another? I'm thinking of things like Google's abilities in AI. That seems to be something people would like to do but, if my data are sitting over here, that's actually really difficult for me to pull that stuff across. So, what are you seeing with customers in their application choice of location? >> So, at the most basic level, obviously a hybrid Cloud strategy is to leverage multiple Cloud infrastructure providers for your enterprise, most basic level. But whether you keep the data onsite and then maybe the application offsite, that's really not a hybrid Cloud. That's, kind of like, I've got my on-prem and my one Cloud provider. Hybrid Cloud really comes into play when you're using everyone from OVH, for a specific set of workloads, maybe you have your disaster recovery here, maybe you have your whole set of enterprise workloads on OVH and you're using, say, maybe IBM for a different workload. Or maybe you're data set is in another Colo facility so, once you start mixing workloads where the data is and having multiple Cloud providers, that's more of where the definition is really evolving to because it's definitely evolving. >> If I'm an enterprise who wants to do that, not a lot of people actually have the skills in house to be able to do that themselves, so they generally rely on partners to do that. I'm thinking people like midlevel systems integrators, they tend to get involved in these kinds of deals. Is that something that you see OVH providing as well or are you looking more to partner with other firms to help? >> Yes, so that's a great question. We're a pure play infrastructure provider. We work really well with other systems integrators and this works very well with VMware's Vcan offering, where all the system integrators out there now have found themselves competing with AWS and competing with Rackspace, now that they're spending up their managed service providers. All these great system architects that are used to sitting on the client being that consultant, kind of helping with their hybrid Cloud strategy, now they're competing with the offerings that they used to offer. So, AWS and Rackspace now have managed services. We're not providing managed services. We rely on system integrators for that. >> I actually want to put a point on that. I bumped into Ajay Patel, we're going to be talking to him tomorrow, it feels like the network has been invigorated some since VMware no longer owns vCloud Air. You do and so now if VMware can focus on the ecosystem more, I've got a number of other hosting and service providers that we're talking to on theCUBE so, does that dynamic help VMware and help you? How does that look? >> No, I think it helps everyone. It give clarity. It gives clarity to the customer. That's what we're all here for, right? We're definitely a customer driven organization. We focus on making sure the customers are successful. And so the customer really understands, hey, this is someone that is investing billions of dollars in global infrastructure, security and scalability. And then for a VMware customer, they understand, okay, I can use VMware for all the great software enterprise software scale that they provide. As a VCam partner, now I'm not trying to compete. I understand where I can play and OVH, we're very clear on what we do and what we don't do so we're big partners on the VSan and working with Ajay Patel on the whole network to make sure those resellers now see that they can actually make more money with the vCloud Air on OVH. >> Right, so if things like the Cloud foundation, I'm assuming that, NSX, you're all tied in. How much joint engineering work do you do there? >> We're working very closely with all the teams over at VMware so whether it's HSX or on the vCloud Air side that already has a lot of technology built in and now VMware is productizing it so our engineers have to work together so it's very exciting. >> Is there anything in particular at the show that's really caught your attention? Because you were saying earlier that this is pretty much your first show in the VMware ecosystem. So, what's stood out to you from that you've seen at the show? >> Yeah, I think what stands out most are the customers that are really... We're talking about hybrid Cloud but there have been so many customers that really are looking for hybrid Cloud and that we all have been a part of the Cloud for so many years and that they're now just migrating workloads off of on-prem. I mean, it's like every year, I have to pinch myself. Like, really? Are there still 65% of workloads that aren't in the Cloud? It's just amazing. >> What do you think that instates going to look like, though. I question whether it's going to be 100% in the Cloud because we have people, customers still have mainframes. It's not most of the market but they still exist and there are plenty of, I call them heritage systems, that are out there. They're very difficult to move and often the upside of moving it isn't work taking the risk. >> In the future there will definitely be 100%. That's like saying that we need a fire in every house to keep it warm. Everything will be in the Cloud in the future. And then you have to differentiate based on the quality of service you're getting. What's the SLA? If I choose you, can I not choose someone else in the future? The vendor lock-in is pretty scary. But, without a doubt, as companies are spending up and you look at these startups now, yes, this is a long time, it may take a hundred years for GM to be totally in the Cloud, right, but you have such vendor lock-in now that these startups are learning that they can be 100% in the Cloud and then how do I work with different Cloud providers not to be locked in with them forever? It's been a big issue. Using other Paz offerings are good and bad. You have to be very careful to let your engineers just go off and start spending up services. >> Russ, one last thing I want to ask you, we talked a lot about the VMware partnership. I know you said you've got some networking capabilities. What other Cloud services can people tie into and I'm curious, the public Cloud's, is there a direct connect from your offering and things like that? >> We've got some great offerings. Obviously we're the worlds largest player in the infrastructure bare metal player and so we have tremendous automation and everything is redundant and backed up automatically, and then we build all of the other solutions on top of that. So, we not only have now vCloud Air, we've been a vSphere provider for seven years now. We have open stack provider as well for the people that do want a public Cloud. More of an open play. A lot of retail companies out there that don't want to go to AWS that are looking for more of an open source public Cloud offering as well. And we've been a great partner there. >> So, your services, I'm just curious, do you plug into other Clouds like Azure, AWS? >> There's not a specific API that we've built to plug in but we definitely have... Our philosophy and our culture is a portable, open, free internet so we don't lock anything down. >> Alright, Russ Reeder, really appreciate you joining us. Congratulations on the progress with bringing OVH to the US and yeah, maybe we'll ask Pat Gelsinger tomorrow, you know, his opinion on it today of some of the criticisms. For Justin Warren, I'm Stu Miniman, we'll be back with lots more coverage here at VMworld 2017. You're watching theCUBE.