our Studios in the heart of Silicon Valley Palo Alto California this is a cute conversation hello everyone welcome to the special cube conversation with a remote guest Steve Herod managing director of general kennel s he's a venture capitalist former CTO of VMware cube alumni Steve welcome to this special cube conversation coming in remote from Palo Alto you're right across town but still we're gonna grab you big news happening and also get your thoughts on the Emerald 2019 welcome to our remote conversation yeah hey Jon yeah we're close and yet this makes it even more convenient go we'd love the new format of bring people into no matter where they are no matter what whatever it takes to get the stories we want to do that and and two important ones to having we we know vm world's coming next week but congratulations in order to you and your portfolio companies signal FX another cube alumni firm we've been covering since the beginning of their funding acquisition by Splunk today for over a billion dollars sixty percent in cash and forty percent in stop congratulations you've been on the board you've known these guys from VMware quite a team quite an exit it's a win-win for those guys congratulations yeah great group of guys several of which were at VMware has you as you mentioned and as you've had on your show that's great they were doing a really good job of monitoring and getting metrics about applications and how they're doing it and they're marrying it with spunks ability to ingest logs and really understand operational data and I think the combination will be very powerful it brings kind of what we've been monitoring cloud 2.0 essentially monitoring 2.0 is really observability as the world starts moving into the the kinds of services we're seeing with cloud and on-premises operations more than ever that game has changes much more dynamic and the security impact is significant and certainly as applications connect whether it's IOT or any IP device having that data at scale is really a critical part of that and I know signal FX was one of those companies where you invested early and I remember interview them a couple years ago and saying damn these guys might be too early I mean they're so smart they're so on it but this is an example of skating to where the as Wayne Gretzky would say these guys were just hitting their stride Steve can you can you share any color commentary on on the deal and or you know why this is so important well they've been at this for a long time and they're a great team I've been involved as an investor less time obviously but yeah it was the really original team out of Facebook monitoring really at scale applications and then trying to take that technology that Facebook could use and applied it to our world and you know as you discovered we're in a world of micro services and containers and that is definitely hitting its stride right now and so they were in the right place knowing how to monitor this very fast moving information and and make some sense out of it so yeah really good job on their part and it was a pleasure to be along for part of the ride with them it's great to meet great founders that have a vision and stay the course because you know it's always tricky when you're early to see the future especially around ok we're talking micro services and containers way back before it became the rage and now more relevant operationally for enterprises it's easy to get distracted and it's fashion well just jump on this trend or this wave they stayed the course they stayed the nose to the grindstone and now observability which to me is code word for monitoring 2.0 is probably one of the hottest segments you saw companies going public companies filing the pager Duty dynaTrace now the you guys with your acquisition with signal FX this is an important sector this would normally be viewed in the IT world as kind of lists of white space but it seems to be a much bigger landscape can you comment on your view on this and why it's so important why is observability so hot Steve well it's been this actually been a great market to be in for quite a while they've been a large number of companies continuing to be both built up and it's pretty simple the amount of e-commerce or the amount of customer interactions you're having over applications and over the web has gone up and so anything is not performing well or house downtime literally cost you a lot of money as a company and so as these applications get more complex and they're being relied on more for revenue and for customer interactions you know simply you have to have better tools and that's gonna be something that continues to evolve we have more complex apps and more commerce is going to go through them complexity is obviously something that people a lot of people are talking about I want to ask you something around today's marketplace but I want you to compare and contrast it similarly to what your experience was at VMware when you the CTO you know virtualization evolved very very quickly and ended up becoming a really critical component of the infrastructure and a lot of people were pooh-poohing that initially at first and then all the sudden became we got to kill VMware and you know so the resiliency of VMware was such that they continued to innovate on virtualization and so that's been you know part of the legacy of VMware and VM roads will cover next next week but when you look at what's happening now with cloud computing and now some of the hybrid cloud opportunities with micro services and other other cool things the the role of the application is being is important part of the equation it used to be the stand up infrastructure and that would enable the application to do things virtualization kind of changed that game now you don't need to stand up any infrastructure you can just deploy an application then the infrastructure can be code and be self formed so you can have unique requirements as infrastructure driven by the application the whole world seems to have flipped around do you see it that way is that accurate assessment and what's your thoughts on that I think you're right on a bunch of fronts people have been calling it different things but the beauty of VMware and you know this is a while ago now but the reason it was successful is that you didn't have to change any of your software to use it sort of slid in underneath and added value but at the same time applications evolved and so the path of looking like hardware was something that was great for not changing applications you have to think about a little differently when people are taking advantage of new application patterns or new services that are in the cloud and as you build up these as they're called cloud native applications it really is about the infrastructure you know it's job and life as to run applications and it's it sort of felt like the other way around it needs to be you wrote an application for what your infrastructure was it shouldn't be like that anymore it's about what what you need to do to get the job done and so we see the evolution of the clouds and their services that are there certainly the notion of containers and a lot the stuff that VMware is now doing has been focused on those new applications and making sure VMware adds value to them whatever type of application they are it's interesting one of the exciting things in this wave that we're on this year around multi cloud hybrid cloud and public cloud now that we've kind of crossed over to the reality that public cloud has been there done that succeeded I call that cloud 1.0 you saw the emergence of hybrid cloud even early on around 2012-2013 we were talking about that at VMworld you know certainly Pat Kelson here but now you're seeing hybrid cloud validated you got outpost you got Azure stack among other things the reality is if you are cloud native you might not need to have anything on premise like companies like ours with 50 plus people we don't have an IT department but most enterprises have stuff on premise so the the nuance these days is around you know what's the architecture of IT these days when you add security into it's complicated so there's debates can there be a sole cloud for a workload certainly that's been something that we've been covering with the Amazon Jedi contract where it's not necessarily a sole cloud for the entire department of defense it's a sole cloud for the workload the military application workload or app the military it's 10 billion dollar application and it's okay to have one cloud as we would say but yet they're gonna use Microsoft's cloud for other things so the DoD's having a multiple cloud approach multiple environments multiple vendors if you will but you don't have to split the cloud up or say this is kind of one of those conversations really evolving quickly because there's no real school of thought around this other than the old way which was have a multi-vendor environment split two things what's your thoughts on the the workload relationship to the cloud is it okay to have a workload have a single clap for that workload and coexist with other clouds it's funny I've been thinking about this more lately where if you went back earlier in time forgetting cloud there used to be a lot of different type of servers that you could run on whether it be a mainframe or a mini mainframe or UNIX system or a Linux system and to some extent people are choosing what would run where based on the demands of the application sometimes on price sometimes on certifications or even what's been ported to the right one so this is I'm beating myself but you know that's that's a while ago it's not too different to kind of think about the different kind of cloud services are out there whether you're running your own on your own data center or whether you're leveraging one from the other partners I really do think in the ideal world you get your choice of the best possible platform for the application across a variety of characteristics and it's kind of up to the vendors of management software and monitoring software at security software to give you more flexibility to choose where to run and so forgetting VMware exactly but think of a virtualization layer that that really tries to abstract out and let you more fluidly run things on different clouds I do think that's where a lot of the you know the core software is head of these days to really enable that to work better and so a million other use cases with with you know storage being moved around for disaster recovery or for whatever it else might be but that core of flexibility reminds me a lot of you know choosing what application would one run would run where within your own company and the kubernetes trend in container certainly really makes that so much more flexible because you can still run VMware's on the ends beams under the covers or put stuff on bare metal a lot of great opportunities so it's exciting and you slap an API in front of them and and micro-services sort of works in tandem with that so that you you could really have your application composed across multiple environments and I think the observable observability is so hot because it takes what network management was doing in the old way which is monitoring making sure things are operating effectively and combining with data and so when I heard about the acquisition of signal FX into Splunk I'm like there it is we're back to data so observability is really a data challenge and opportunity for using what would be a white space monitoring but it's more than monitoring because it's about the data and the efficacy of that data and how it's being used whether it's for security or whatever your thoughts so there's more data than ever for sure and so being able to stream that in being able to capture it at cost all that is a big part of our you know the environments we all work and the key thing is turning that into some actionable insight and whether you're using you know interesting calculations for that or different forms of machine learning like that's where this really has to go is with all this data coming in do I avoid false false positives how do i only alert people when needed and then that allows you to do what everyone has talked about for 30 years which is automatic remediation but for now let's talk about it is how do i process all of this rich data and give me the right information to take action see we want to thank you for coming on this promote cube conversation you've been with us at the cube since 2010 I think our first cube event was EMC world 2010 that show doesn't exist any longer because that folded into Dell technologies world so VM world next week is the last show standing that has been around since the cube cubes been around of course you guys had the VM worlds had their 10th anniversary I think was 2013 as a show but this is our 10th year I want to thank you for being part of our community and being a contributor with your commentary and your friendship and referral appreciate all that so I gotta ask you looking back over the 10 years since you've been with the cube VMworld what's the most exciting moments what are moments that you can say hey that was an amazing time that was a grind but we got through it funny moments your thoughts yeah boy that's a tough question I've enjoyed you know working with you John and the cube there have been so many really interesting things for me the some of the big acquisitions that we went through at VMware where I think the nsx acquisition when we get nasarah I think that really pushed us in an interesting spot but we had gone through IPOs and acquisition ourselves by EMC and we've gone through some pretty vicious competition from whether it be Citrix or Zin or Microsoft yeah that's just the joy of being at these companies it's lots of ups and downs along the way but they all kind of fit together to make an exciting life what were some moments for you I know you had left was a twenty fifteen or twenty six point eight vs world you go down there yeah about six years what do you miss about VMware the team is what everyone kind of cliche says but it's totally true the chance to kind of work with all those people at the executive staff all the way down to like these awesome engineers with Co ideas so I definitely missed that miss shipping products you don't get to do that as much as a venture capitalist but but on the flip side this is a great world to be and I get to see enthusiastic you know very optimistic founders all day long pushing the envelope and while that was existing at the EM where it's it's what I see every single day here you've been on the cube ten times at vmworld that's the all time spot you're tied but first congratulations on the leaderboard well it's been a great ten years going forward we've seen more so go looking back I would say that you know Palmer it's taking over from Diane Greene really set the table he actually laid out essentially what I think now as a clearly a cloud SAS architecture I think he got that pretty much right again or maybe early in certain spots of what he proposed at that time though some things that didn't materialize as fast but ultimately from a core perspective you guys got that right and then went in try to do the cloud but then and this year it comes in for a software-defined you know line with Amazon and since that time the stock has been really kind of up to the right so you know some key moments there for VMware from small somalia more stuff it's fun to see pivotal now possibly coming back into after after getting started there but I think you know there's there's a hugely talented team of executives there Pat Yeltsin jurors come in and done a great job I think Raghu and all these folks that are in there are good thinkers and so I think you'll consider to continue to see it evolve quite a bit and probably some cool announcements next week talk about the role Raghu and the team played because he doesn't really get a lot of the spotlight he avoids it I know he'd I've talked to him privately he won't come on the qoi let the other guys go on other guys and gals so he's been instrumental he was really critical in multiple deals could you share some insight into his role at VMware VMware and why it's been so important well I'll push them to get on especially now that you have remote you can probably grab him no he and Rajiv and andraia Ferrell just all the guys are I think he and regime basically split up half and half of the products but I know Raghu is very very similar in the whole cloud strategy that has clearly been working well he's good friend in a very smart guy well I want you to give me a personal word that you're gonna give him in a headlock and tell him to come on the cube this year we want him on he's a great great great guest he's certainly knowledgeable going forward Steve 10 years out we still got 10 more years of great change coming if you look at the wave that's coming you're out investing in companies again you had one big exit today with the billion dollar acquisition that was happening by Splunk and signal affects a lot more action you've been investing in security what's your outlook as you look at the next ten years there's a lot more action to happen we seem to be early days in this new modern era historic time in the computer industry has applications of now dictating infrastructure capabilities is still a lot more to do what are you excited about there's there's a million things I get to see everyday which are clearly where the world is headed but I think at the end of the day there's there's infrastructure which the job and life of infrastructure is to run applications and so then you look at applications how are they changing and and what is the underlying fabric gonna need to do to support them and if you look at the future of applications it's clearly some amazing things around artificial intelligence and machine learning to actually make them smarter it's all different factors form factors that they're running on and being displayed on I think we clearly have a world where with the next generation of networking you can do even more at the edge and communicate in a very different way with the backend so I kind of look at all these application patterns and really try to think about what is the change to the underlying clouds and fabrics and compute that's going to be needed to run them I think we have plenty of headroom of interesting ideas ahead stew Dave and I were talks to Dave Stuben they want this too many man died we're talking about you know as infrastructure and cloud get automated as automation comes in new waves are gonna be formed from it what new waves do you see is it's like RPAs a I I mean because as those things get sucked in and they ships in to new waves what are the some of the key ways people should pay attention to I'm not saying the inverse tress is going away but as it becomes automated and as the shift happens the value still is there where is those new waves well I think today it looks like most applications are going to be composed of a lot of services and I think they're gonna be able they're gonna need to be displaying on everything from big screens to small screens to purely as headless api friends and so again I think at the end of the day this this infrastructure is gonna have to have a lot of computation capability have to crunch through tons of data but also have to stitch together these connections between components and provide really good experiences and ability in the network and all those are very hard problems that we've been working on for a while I think we're gonna keep working on them and new forms for the next ten years at least awesome see thanks for being a friend with us in the cube what's your funny favorite moment of the Q can you share any observations about the cube and your experiences your observations over the 10 years we've come a long way you've come a long way actually I've enjoyed it I mean it's a microcosm of all the other stuff going on but I saw your first little box that you built and used for the cube like that was that was really cool but now the fact that I'm on my laptop you know doing this over the network and it's showing up is pretty awesome so I think you're following the same patterns of the other of the other applications moving to the cloud and having good user experience because cube native here software if the male native Steve thank you so much for staying the time commenting on the acquisition I know it's fresh on the press a lot more analysis and cut to come next week it's certainly I'll be co-hosting ATS plunks Kampf later in the year so I'm looking forward to connecting with the team there and again thanks for all your contribution into the cube community we really appreciate it one thank you for your time thanks John you guys are awesome thanks for chatting okay Steve Herod managing director at General Counsel top tier VC from here in Silicon Valley and they have offices around the world I'm Jean ferré breaking down the news as well as a VM real preview with the former CTO of VMware Steve hare now a big-time venture capitalist I'm John Ferrier thanks for watching [Music] you [Music]

(funky music) >> From our studios in the heart of Silicon Valley, Palo Alto, California. This is a CUBEConversation. >> Everyone, welcome to this CUBEConversation here in Palo Alto, California. I'm John Furrier, host of theCUBE. Here in theCUBE Studios here with Abby Kearns, Executive Director, Cloud Foundry Foundation, CUBE alumni. Great to see you again. I think this is your eighth time on theCUBE chatting. Always great to get the update. Thanks for spending the time. >> My pleasure, and it's a joy to drive down to your actual studios. >> (laughs) This is where all happens Wednesdays and Thursdays when we're not on the road doing CUBE events. I think we'll have over 120 events this year. We'll certainly see you at a bulk of them. Cloud Foundry, give us the update. Yeah, we took 'em joking before we came on camera. Boy this cloud thing is kind of working out. I mean, I think IBM CEO calls it chapter two. I'm like, we're still in chapter one, two, three? Give us the update Cloud Foundry, obviously open-source. Things are rocking. Give us the update. >> I do feel like we're moving into chapter two. Chapter one was a really long chapter. (laughs) It spanned about 10 years. But I do think we're starting to see actual growth and actual usage. And I think a lot of people are like, no, there's actually been usage for a while. Me, no no no not on a real scale. And we haven't seen any of the workloads for organizations running at massive scale. At the scale that we know that they can run at. But we're starting to see interesting scale. Like 40, 50 thousand applications, you know. Billions of transactions now passing through. A lot of cloud native technology. So we're starting to see real interesting volume. And so that's going to actually dictate how the next five years unfold because scale is going to dictate how the technologies unfold, how they're used. And they're going to feed into this virtuous cycle of how the technologies unfold, and how they're going to be used, which feedback into how enterprises are using them, and you know, and the cycle continues. >> Give us the update on the foundation. What's going on with the foundation, status, momentum, clouds out there. Obviously open-source continues to drive however we saw a lot of acquisitions and fundings around people who are using open-source to build a business around that. >> I love that. >> Your favorite conversation. But, I mean you know the technical challenges with open-source allow for technical challenges but also the people side is they're learning. What's the update with the foundation? >> Well open-source is really tricky, and I think there is a lot of people that are really enthusiastic as it is a because model. I mean last year 2018 was a pretty substantial year for open-source. The year ended with Red Hat's acquisition by IBM. One of their biggest acquisitions, $34 billion. But we saw in December alone, we also saw Heptio get picked up by VMware which is a services company which is really based on Kubernetes on an open-source technology. But we also saw HashiCorp get another round of funding. And then earlier in the year, Pivotal IPO'd. And so if you look at 2018 at a bigger level, you saw a lot of momentum around open-source and how it's actually being commercialized. Now you and I were talking a little bit prior and I'm a big believer that open-source has the potential and is going to change fundamentally how technology is used and consumed. But at the end of the day for the commercial aspects of it you still have to have a business around that. And I think there's always going to be that fine line. And that line is actually always be going to be moving because how you provide value in, around, and on top of open-source, has to evolve with both the market and your customer needs. >> Yeah and where you are on that wave, whatever wave that is, is it an early wave or is it more mature so the metrization certainly matters? >> Sure. >> You could be early on setting the table or if it's growing when there's some complexity. So it kind of depends, it's always that depends is it the cloud air or is it the Red Hat? There's different approaches and people kind of get confused on that and your answer to that is just pick one that works for, that's a good business model. Don't get hung up on kind of the playbook if you will, is that kind of what you're saying? >> Well I think we're seeing this play out this week with AWS's Elastic announcement, right? And there's been a lot of conversation around how do we think about open-source. Who has access to it? Who has the right to commercialize it? What does commercialization look like? And I think, I've always cautioned people that are proceeding down the path to open-source is really be thoughtful about why you're doing open-source. Like what is your, what are you hoping to achieve? There's a lot of potential that comes with open sourcing your technology. You gain ecosystem, community, momentum. There's a lot of positives that come with that but there's also a lot of work that comes with that too. Managing your community. Managing a much more varied share of stakeholders and people that are going to have thoughts and opinions around how that technology unfolds. And then of course it's because it's open-sources there's more opportunity for people to use that and build their own ideas and their own solutions on top of that. And potentially their own commercial products. And so really figuring out that fine line and what works best for your business. What works best for the technology. And then what your hopes are at the end of the day with that. >> And what are some of the momentums or points for the Foundation, with Cloud Foundry, obviously seeing Pivotal went public, you mentioned that VMWare, I talk to Michael Dell all the time, the numbers are great coming from that operation. Pat Kelson near the Amazon deal think that clear and where VMWare was. But still you have a lot more cloud, multi-cloud conversations happening than ever before. >> Well, for sure I mean at Cloud Foundry, we've actually been talking about multicloud since 2016. We saw that trend coming based on user behavior. And now you've seen everyone is multicloud, even the public clouds are multicloud. >> I think you had the first study out on that, too on multicloud. We did. We were we were firm believers in multicloud. Last year we've actually moved more broadly to multi-platform. Because at the end of the day there isn't one technology that solves all of these problems. Multicloud is you know is pervasive and at the end of the day multicloud means a lot of different things to a lot of people. But for many enterprises what it gives is optionality. You don't want to be locked into a single provider. You don't want to be locked into a single cloud or single solution because you know if I'm an enterprise, I don't know where I'm going to be in five years. Do I want to make a five year or a 10 year or a 20 year commitment to a single infrastructure provider when I don't know what my needs are going to be. So having that optionality and also being able to use the best of what clouds can provide, the best services, the best outcomes. And so for me, I want to have that optionality. So I'm going to look at technologies that give me that portability and then I'm going to use that to allow me to choose the best cloud that I need for right now for my business and maybe again a different one in the future. >> I want to get your thoughts on this. I just doubled down on this conversation because I think there's two things going on that I'm saying we'll get your reaction to. One is I've heard things like pick the right cloud for the right workload and I heard analogies. Hey, if you got an airplane you need to have two engines. You have one engine if it works for that plane, but your whole fleet of planes could be other clouds. So, pick the right cloud for the right workload. Meaning workload is defined spec. >> Yeah. >> I've also heard that the people side of the equation, where people are behaving like they are comfortable with API's tooling is potentially a lock-in, kind of by default. Not a technical lock-in, but people are comfortable with the API's and the tooling. >> Yeah. >> And the workloads need a certain cloud. Then maybe that cloud would be it. That's not saying pick that cloud for the entire company. Right, so certainly that the trend seems to be coming from a lot of people in the news saying hey, this whole sole-cloud, multi-cloud thing argument really isn't about one cloud vs. multiple clouds. It's workload cloud for the use case in the tooling, if it fits and the people are there to do it. Then you can still have other clouds and that's in the multi-cloud architecture. So is that real? What's your thoughts on that? >> Let's dissect that 'cause I think that's actually solving for two different outcomes. Like one multi-cloud for optionality's purpose and workload specific. I think it's a great one. There's a lot of services that are native to certain clouds that maybe you really would like to get greater access to. And so I think you're going to choose the best. You know that's going to drive your workload. Now also factoring in that you know you're going to have a much more mediated access to cloud based on what people are comfortable with. I do think it's at some point as an organization you want to have a better control over that. You know historically over the last decade what we've seen. Shadow IT really dictates your Cloud spend right. You know everyone's got a credit card. I got I've got access to AWS. >> And they got most of that business. Amazon did. >> Yes and that served them quite well. If I am an organization that's trying to digitally transform, I'm also trying to get a better handle on what we're spending, how we're spending it and frankly, now if I have compliance requirements, where's my data? These are going to be important questions for you when you're starting to run production workloads at scale on multiple clouds and so, I predict we're going to see a lot more tension there in internal organizations. Like, hey I'd love for you to use cloud, you know? Where this no longer needs to be a shadow thing, but let's figure out a way to do it that's strategically and intentional versus just random pockets. Choosing to do cloud because of the workflow that they like. >> Well you bring up a good point. The cost thing was never a problem, but then you have sprawl and you realize there's a cost to Optimizer component which means you might be overpaying because as you think about the system aspects, you got networking and you got Cloud management factors. So you start as you get into that Shadow IT expansion. You got to realize, wait a minute, I'm still spending a lot of cash here. >> This adds up really really quickly. I mean, I think the information piece a couple weeks ago where they talked about the Pinterest bill, this stuff, it starts adding up. And for organizations, this is like not just thousands of dollars. It's now hundreds of thousands of dollars. If not you know, tens of millions of dollars. And so, if I'm trying to figure out ways to optimize my business and my scale, I'm going to look at that because that is not an insignificant amount of money. And so if I'm in it, that's money that could be better invested in more developers, better outcomes, a better alignment with my business, then that's where I want to spend my time and money, and so, I'm going to spend more time being really thoughtful about what clouds we're using, what infrastructure we're using, and the tools we're using to allow us to have that optionality. >> So you would agree with the statement if I said, generally, multi-cloud is here, it already exists. >> Yes. >> And that multi-cloud architecture thinking is really the conversation that needs to be had. Not so much cloud selection, per say. It's not a mutually exclusive situation. Meaning, I'm not all in on Amazon. I'm going to have clouds plural? >> Well, yeah you are. Like we have already seen as of early last year over half of our users. Which right now over half the Fortune 500 are multi-cloud already, and that number has gone up since last year I'm for sure. Some workloads were on-prem and some are in a public cloud. Be it GCP, AWS, Azure, or AliCloud. And so that is a statement of fact. And I have every executive that I've talked to with every enterprise has been like, yes, we're doing multi-cloud. >> Yeah, they're going to have some kind of on-prem anyway, So we know that's there. That's not going to go away. >> No, PRIM is not going to go away. >> Then an IOT edge, and an Enterprise Edge, SDWAN comes back into vogue as people start using SAS across network connections. >> Yeah. >> I mean, SDWAN is essentially the internet basically. >> I feel like the older I get the more I'm like, wow, didn't I have this conversation like, 20 years ago? (laughs) >> I was talking about something earlier when I came in. The old becomes the new again. It's what's happening, right? Distributor computing now goes to cloud, you got the Enterprise. What are the big players doing? Google Next is coming up next month, big event. >> It is the week after Cloud Foundry Summit. >> They got Amit Zavery, big news over there they poached from Oracle. So Thomas Kurian brought in his Oracle, who is Cube alumni as well. Really smart guy. Diane is not there. What do you expect from Google Next for the week? What are we going to see there? What's the sentiment? What's the vibe? What do you see happening? >> Well, I think it's going to be all about the Enterprise right. That's why Thomas was brought in. And then I think they really give Google that Enterprise focus and say, how do we end up? As it's not just about I'm going to sell to enterprises. That's not, you know, when you're selling to an enterprise there is a whole different approach and you have to write how to the teams, the sales teams. You have to write how to the ecosystem, the services, the enablement capabilities, the support, the training, the product strategy? All of that takes a very different slant when you're thinking about an enterprise. And so I'm sure, that's going to be front-and-center for everything that they talk about. >> And certainly he's very public about, you know, the position Oracle Cloud, he knows the Enterprise Oracle was the master of enterprise gamesmanship for sure. >> Yes, for sure. You don't get a whole lot more enterprising than Oracle. >> What's going on in the CNCF any news there? What's happening on the landscape? What's the Abby take on the landscape of cloud? >> Well, speaking as someone that does not run CNCF. >> Feel free to elaborate. >> Cloud Native Computing Foundation, for those of you that aren't aren't, you know, aren't familiar is a sister open-source organization that is a clearing house or collective of cloud made of technologies. The anchor project is the very well-known Kubernetes, but it also spans a variety of technologies from everything from LINKerD to SEDA to Envoy, so it's just a variety of cloud-native technologies. And you know they're continuing to grow because obviously cloud-native is becoming you know it's coming into its own time right now. Because we're starting to really think about how to do better with workloads. Particularly workloads that I can run across a cloud. I mean and that seems pretty pedantic but we've been talking about Cloud since 2007. And we were talking about what cloud brings. What did cloud bring, it brings resiliency. You can auto-scale. You can burst into the cloud, remember bursting? Now all the things we talked about in 2007 to 2008 but weren't really reality because the applications that were written weren't necessarily written to do that. >> And that's exactly the point. >> So now we're actually seeing a lot more of these applications written we call them microservices, 12 Factor apps, serverless apps. What have you but it's applications written to run and scale across the cloud. And that is a really defining point because now these technologies are actually relevant because we're starting to see more of these created and run and now run at scale. >> Yeah, I think that's the point. I think you nailed it. The applications are driving everything And I think that's the chapter two narrative. In my opinion, chapter one was, let's get infrastructures code going. And chapter two is apps dictating policy and then you're going to see microservices start to emerge. Kind of new different vibe in terms of like what it means for scale as less of about, hey, I'm doing cloud, I got some stuff in the public cloud. Here the conversation is around apps, the workloads and that's where the business value is. It's not like people who is trying to do transformation. They're not saying hey I stood up a Kubernetes Cluster. They're saying I got to deploy my banking app or I got to do, I got to drive this workload. >> And I have to iterate now. I can't do a banking app and then update it in a year. That's not acceptable anymore. You are constantly having to update. You're constantly having to iterate, and that is not something you can do with a large application. I mean the whole reason we talk a lot about monolithic vs 12 factor or cloud in a box is because it isn't that my monolithics are inherently bad, it's just they're big and they're complex. Which means in order to make any updates it takes time. That's where the year comes in, the 18-months come in. And I think that is no longer acceptable you know. I remember the time and I'm going to date myself here, but I remember the time when you know banks would or any e-commerce site would be down. They'd have what they call the orange page. But the orange page would come up, site down tonight 'cause we're doing maintenance for the weekend, right? >> Under construction. >> Under construction. Okay, well I'll just come back on Monday. That's fine. And now, you're like, if it's down for 5 minutes you're like what is actually happening right now. Why is this not here. >> Yeah like when Facebook went down the other day. I was like, what the hell? Facebook sucks. >> You know, the internet blows up if Instagram is down. Oh my God, my life is over and I think our our expectation now is not only constant availability. So you know always available. But also our expectation is real-time access to data transparency and a visibility into what's actually happening at all times. That I've said something that a lot of organizations are really having to figure out. How to develop the applications to expose that. And that takes time and that takes change. And there's a ton of culture change. it has to happen and that is the more important thing if I'm a business I care more about how do I make that a reality and I should care a lot less about the technologies that you use. >> It's interesting you mention about the monolith versus the decomposed application of being agile. Because if you don't have the culture and the people to do it it's still a monolithic effort in the sense of the holistic thinking and the architectural, it's a systems architecture. You have to look at it like a system and that's not easy either. Once get that done the benefits are multifold in terms of like what you can do. But its it's that systems thinking setup is becoming more of an architectural concept that's super important. >> For sure if I have a microservice app, but it takes a 150 people to get that through change management and get it into production well that will still take me a year. Does it matter if there's maybe 12 lines of code in that application? It doesn't matter and so, you know I spend a lot of time. Even though I run Cloud Foundry, I spend a lot of time talking about culture change. All the writing I do is really around cultural change and what does that look like. Because at the end of the day if you're not willing to make those changes, you're not willing to structure your teams and allow for that collaboration and if you're doing iterative work, feedback loops from your customers. If you're not willing to put those pieces into place there is no technology that's going to make you better. >> I totally agree, so let me ask you a question on that point, great point, by the way. Most followed your you're writing your blog posts in the links, but I think that's the question. When do you know when it's not working? So I've seen companies that are rearranging the deckchairs, if you will, to use an analogy with all the culture rah, rah! And then nothing ever happens right? So they've gone into that paralysis mode. When do you look at a culture? When does the executive, what should they be thinking about because people kind of aspire to do this execution that you said is critical? When do you know it's not working or what should they be doing? What's the best practice? How does someone say hey you know what I really want is to be more holistic in my architecture. I don't want to spend two years on that the architecture and then find out it's now just starting. I want to get an architecture in place. I want to hit the ground running. >> I mean it's twofold, one, start small. I mean you're not going to change you know if you're an 85 year old company with 200,000 people you're not going to change that overnight and you should expect that's going to be an 8 to 10 year process now what that's also going to mean is you're going to have to have a really clear vision and you're going to have to be really committed like this is going to be a hard road but conversely when someone says what does success look like, when you're looking at a variety of companies how do you know which ones which ones you think are going to be the most successful at the end of the day because no one's ever actually done any of this before there's no one that's ever gone through this digital transformation and it should have come out on the other side no one. There isn't and so I think what does success look and I said well for me, what I look for are companies that are investing and re-skilling their workforce. That's what I'm looking for. I get real excited when companies talk about their internal boot camps or their programs to rescale or upscale their teams because it's not like you're going to lay off 20,000 people and hire 20,000 cloud native developers, they don't exist and they're certainly not going to exists for thousands of companies to go and do that so you know how are you investing in re-skilling because-- >> It's easy to grow your own internally from pre-existing positions. >> Well sure, they know your business. >> Rather than go to a job board that has no one available. >> And you know at the end of the day that needs to be your new business model what is digital transformation actually it's just a different way of working and there isn't, there is no destination to the digital trend. This isn't a journey that has an end and so you need to really think about how are you going to invest differently in your people so that they can continuously learn continuously learning needs to be part of your model and your mantra and that needs to be in everything you do from hiring to HR to MBO's to you know how do you how do you structure your teams like how do you make sure that people can constantly learn and evolve because if that's not happening it doesn't you know everything else is going to fall by the wayside >> Is the technology gap easy to fill? Lot of tech out there. Talent gap hard to fill. >> For sure. >> That's the real challenge. >> If you have all the best tech in the world but you don't have the right people or the right structure are you going to be successful, probably not. >> Yeah, that's a challenge. Alright, so final question for you where are you going to be, what's your schedule look like, where can people find you, what events going to be at? You guys have an event coming up? >> April 2nd through 4th in Philly. We're going to have a summit you want to see some people that are actually running cloud at scale that's the place to go >> April 5th? >> 2nd through 4th. First week of April Philly, fingers crossed good weather lots of cloud talk and it's a great way. >> City of Brotherly Love >> Yes, we're bringing it. >> Philadelphia. The Patriots couldn't make it to the playoffs last year but love the Philly fans down there Paul Martino and friends down there. Abby thanks for coming on. Appreciate it-good to see you. Thanks for the update. We'll see you around the events, I won't be able to make your event I'll be taking the week off skiing. >> Well one of us has to. >> First vacation of the year, two years. Thanks for coming in. >> You should do that. >> Abby Kearns here inside theCUBE for CUBEConversation I'm John Furrier, thanks for watching (funky music)

(upbeat music) >> Live from Las Vegas. It's the Cube. Covering, Boomi World, 2018. Brought to you by Dell Boomi. >> Hello everyone, welcome to the live Cube coverage here in Las Vegas, the Wynn Hotel for Dell Boomi World 18. So, exclusive coverage. We're here all day. Wall to wall coverage covering the impact of cloud native to application developers and owners and for businesses. I'm John Furrier with Lisa Martin here. We're here with Michael Dell. 13th time on the Cube. He's the founder and CEO of Dell Technologies. Continuing to defy logic. Growing leaps and bounds. Continuing to do more in the new era of IT and computing. Mike, great to see you. Thanks for coming. >> Great to be with you. Lisa, John, always fun. And here at Boomi World it's really exciting to see the ecosystem continue to grow. As people try to connect everything together Boomi is right there. Incredible business last quarter. Booking growth, 80%, 7500 customers. I still can't find a customer that doesn't need Boomi. The team continues to evolve what the capabilities. We've just had a great show here. 1000 customers showed up. Lot's of great customer stories about how they're integrating all their apps and data together. With the tsunami of data that is coming, it just gets more and more important and interesting and fun. >> You know, you mentioned on the key note stage with CEO Boomi, talking about some performance numbers that you always throw out, server growth. Continuing to grow, okay. The pundants were saying oh servers, that's cloud server-less. You still need compute, networking and storage but they do change with the cloud and SaaS has proven that business model of as a service is key. Boomi's got this little secret weapon around the unified platform that integrates a lot of these traditional components that is still going to be foundational but yet set up the next wave around AI, Edge, data tsunami that you mentioned. This is a key variable in the architectural shift. Can you talk about how you see that playing out? Because you got a couple big pieces on the chess board. VMWare, the continuous Dell Technologies portfolio kind of as the table stakes. This is kind of interesting new architecture. Explain how you see that. >> Pivotal, Dell EMC, VMWare. >> So a lot of pieces. >> Right. >> How does Boomi play into that? Because if it does be a glue layer if you will for lack of a better word, it can be very powerful. >> Yeah, so the challenge is when you go to Software as a Service, how do you connect the things together? Now, connecting 1 or 2 together is pretty straight forward. But when you start having 50 or 100 of these things, and then you've got on premise systems and now you want to have actions like an employee does something and based on their roll then something else happens, you have work flow. And then you get this, you go from a couple billion PCs to 5 billion smart phones to 100s of billions of connected things out there with this explosion in the edge. How you integrate and connect everything together with work flow and do it securely is super, super important. So we're seeing just an explosion of use cases. There was some great examples from a city digitizing and being able to detect leaks and when traffic lights aren't working. The used cases are pretty unlimited and Boomi and Pivitol play sort of at the top layer for us so the applications and integrating all the data and allowing customers to express their competitive advantage with software and data and AI and machine learning. And then of course we've got VM Ware to virtualize everything from the data center to the network and beyond. With NSX, what we're doing with NFE and software to fine win. And then of course we're the initial infrastructure company. Absolute number 1 in all aspects of the data center. And growing much faster than any of the competitors. >> And I want to also get your thoughts on VM Ware announced up to this morning, actually Barcelona time for VM Ware Europe, the acquisition of Heptio. >> Absolutely. >> Okay, Pat Kelson said in VM World, we're going in, we're going to make Kubernetes the dial tone. This is a key architectural component around orchestration. Containers certainly everyone knows, that's been standardized. People love containers. They're using them. As applications need to be more efficiently built out, out of the Boomi's value proposition, Kubernetes and these cloud native things are super important. What's your view on that? Great acquisitions, very young company? Not 34 billion dollars for a Red Hat like IBM bought but a small tuck in. How important is that trend for you? >> Well, think about what we've done with Pivitol and VM Ware together with the Pivitol container service and now adding Heptio with 2 of the 3 founders of the whole Kubernetes movement. We're going to be making Kubernetes just part of the dial tone of vSpheres. So for virtually all the customers out there, 600000 of them that use vSphere, it'll just be super easy to now have Kubernetes containers built into their vSphere environment. That's the vision. We've got a great team working on it across VM Ware and Pivitol and now the Heptio team. Adding to it. We're super pumped about all this. >> If your friend asked you at a party this weekend, hey Michael, why is Kubernetes important? What do you say to that? >> I guess it would depend on how much they know about this. >> They're a business owner responsible for application development. >> Yeah. >> They are owning to transform their organization. They realize clouds going to be a part of it. They here Kubernetes really popular, it's trending. But it's a technology. A lot of people are now getting this for the first time and seeing it as the early dopples have shown it. They try to want to know the impact and why it's important. Why is Kubernetes important as you start to get into this orchestration of apps and work loads across clouds. Why is it important? >> I think people don't want to get locked in to a particular place when it comes to their infrastructure. Kubernetes has clearly won the battle in terms of being able to be that abstraction layer. That's the simple thing that is super exciting. When it sort of went from cloud to hybrid cloud to multi cloud, people realized they wanted a 2 way street where they could move things back and forth. And now with the edge, they want to move it to the edge. With the distributed core. This explosion in data, this dat tsunami really requires a whole new set of tools in terms of the software infrastructure to be able to make it all work. >> So transformation is ... You're talking about Dell Technologies now. 34 years later you have 7 corporations under that. Done a lot to keep those brands, as they're very valuable. Dell Boomi as a business unit. Transformation is essential and Dell Boomi wants to be the transformation partner. It's also incredibly difficult. IT transformation. Digital, security, workforce. Dell Boomi works and Dell Technologies with a lot of large enterprise organizations that are still probably fairly not as well connected as they should be to find new value, new business dreams. How do you talk with customers, large enterprises that need to transform to stay competitive? Where do they start? And how dose the Dell transformation story in and of itself help those customers feel confident in what Dell Technologies can deliver? >> Right, well first thing I'd say is we actually work with customers of all sizes. We have an enormous business with small and medium and large customers. We're number 1 across the whole spectrum. We serve 99% of the Fortune 500. Since your question is about those types. They're looking at the digital transformation and figuring out this is really not an IT project. It's about technology becoming pervasive in everything that they're doing. From sells to marketing, to product creation to their whole fundamental strategy. So then it shows up in the office of the CEO and business line executives and they're having to reimagine. And so they look for a partner and Dell Technologies is very unique. 2 years and 2 months ago we put together all these companies and it's been fabulous. We've been growing double digits consistently and the response has been great because we can deliver a complete set of capabilities. Now you're right, change management, and how do I do it in my company, that's a big deal. So they're pulling on us to bring them more of a ... The don't want us to show up with a bunch of parts and drop em off. They want us to actually build them a solution that is specific to their needs. Help them implement it. In many cases, run it for them. So we do much of that ourselves with our own services organization. 60000 plus people in our services organization. And of course we have the best, all the great SIs out there that are helping customers implement and run and manage like I said, 99% of the Fortune 500. We're right there with them in this digital transformation. Of course we do the IT, the workforce, the PCs and of course security. Unbelievably important. Your whole brand trust is all based on that so we wrap the whole thing with security and no company has the breath that we have. I think we've kind of won the hearts and minds of the decision makers because of the capabilities that we have. Not that we take it for granted. We have to go earn that trust every single day. We have unbelievably talented people in our company. Over 20000 engineers. Scientists, PHDs. About 90% of them are software engineers. This is a very different company than it was 5 or 10 years ago. We're having a blast. It's a rocket ship, so. >> I had a chance to interview an IT leader and his name is Allen Bean. He's the global CTO and head of IT innovation at Proctor and Gamble. He brought the cloud to Coca-Cola. Has had a career all in IT going back to DHL in the 90s and 80s. So we were talking and I asked him, does IT matter. And Dave Alampi always brings up the book by Nick Carr. And we always talk about it. >> Love it. Such a fun topper, yeah. >> And so he says, quote, at that time some people thought it didn't matter, everyone was kind of complaining, but he says it does matter. It's a competitive advantage. And over the decades IT was outsourced. And now people are trying to bring that back in and make it a competitive advantage. This is now ... It's a mandate basically. So as people who have been kind of anemic with IT, they've got people running stuff but eventually outsource all the value. They got to bring that value in. Cloud is that opportunity. How do you respond to the leaders out there trying to figure this out. What are the keys to success around bringing back the competitive advantage and using the cloud for things that aren't core to the core competency but getting that core competency nailed down. What's your vision. >> Yeah, well, look, I mean, it's all about understanding what is your competitive differentiation and advantage as a business. And if you give that away to somebody else, you're going to be out of business in not too much time. Packers applications are great for things that aren't differentiated. But if you actually do something that's unique and valuable and special and you can't express that in software with your own data, you're going to have a problem, right? This is what companies are figuring out. This is what we're doing with Pivitol and Boomi allowing companies to build all this together. And look I think as it relates to cloud, customers have figured out it's multi cloud, right? It's a workload dependent discussion. Some workloads are great in the public cloud but in many cases, not so much, right? As we've modernized and automated the infrastructure we have customers that tell us hey our private cloud for our predictable workload, which is 90%, is 5, 6 times less expensive than AWS. We're building these converge, hyper converge, like the fast track to the automated modernized infrastructure. And look, you can decide. But we're seeing customers that want to move things back and forth and we're seeing a bit of a boomerang. Where customers have said oh everything you upload to the cloud, and no, not everything. >> And the digital transformation really is making IT a competitive advantage. So I had a long ranging interview. It's up on YouTube. I asked him a final question. I always said, okay, so you know, he's transforming Proctor and Gamble. I said okay, as you look ads and all those things what's the next mountain that you're going to climb? You're an IT pro, you said in the agenda. And I'll read you the quote. I want to get your reaction. He said, "I think we're looking forward. Latency is still an issue. We have to find ways to defeat latency and we're not going to do it through basic physics, we're going to have to change out business models, change our technology, distribution, change everything that we're doing. Consumers and customers are demanding instant access to enhanced information through AI and machine learning right at the point when they want it." So this is his next mountain. This is kind of what you were talking about on the stage here at the Dell Boomi event around the impact of AI and data. What's your reaction to that quote? >> Well to me this is all about the edge and 5G coming around the corner. And you look at all the big telcos. They're all piling in on 5G because it's 1000 times faster and 1000 times less latency. That's going to be a big turbo charge. The rocket ship. And it will just create an explosion in data and compute on the edge. And a lot of it's going to stay on the edge. Because you'll have these edge devices talking to each other. A whole new class of applications and capabilities because of that. That's super exciting. We're already seeing it with this build out of distributed core. And that's why we see so much growth in the data center business. >> So Michael, Dell Boomi, if you look at Boomi for a second, was named by the Gartner Magic Quadrant of 2018 as a leader in Ipads. Today they talked about ... >> Again, I think 6th or 7th year in a row. It's been there for quite some time. >> An established leader in an established market. But today they were talking about, hey we want to change the, we want to redefine the I in Ipads to intelligence. How is Dell Technologies and Boomi particularly starting to leverage terra bites and terra bites of customer meta data to make your systems smarter? To enable businesses to truly connect. Prim, edge devices as things continue to get more distributed and data becomes more critical? >> Yeah, so, the key to AI and all of its variance of machine learning, deep learning neural network is the data. The data is the fuel for the rocket ship of AI. And the challenge is, if you have your data spread out in 100 softwares of service providers and 3 public clouds and here and there and where's all your data? We don't really know. How do you fuel the rocket? It becomes a very difficult problem. This is the problem that we're beginning to address for our customers. We're going to have an event all about AI coming up I think next week. Where we're going to be talking much more about this. We got a number of offerings that we're rolling out. We've been helping customers for years build their data lakes and curate the data. And of course Pivitol and Boomi are essential to how you bring all of this together and make sense of it. Because if you just have all the data but you can't actually use it. If you're not already using AI and it's variance to improve your products and services, you're doing it wrong. We've identified over 450 projects just within Dell Technologies internally. As I mentioned on stage, we've sold about 700 million computers since I started in my dorm room. We have enormous telemetry data. Imagine, if you will, that something doesn't work exactly the way it's supposed to. Okay? What's the chance that has never happened before? >> Zero. >> The answers almost zero, right? Our job is to take all this data that we have, use all this intelligence and actually prevent it from happening. So we're building all kinds of intelligence and AI and preventative technology into all of our solutions from the data center to the desk top to the edge, to the multi cloud so that all these systems are just self healing and auto magically way more reliable. >> Auto magically, I like that. It just sounds like what you're saying is Dell Technologies articulating it's value and it's differentiation because you're using that data. >> You have to. >> To identify insight, to take action immediately. >> And to your point about the big companies, they have an advantage but it's a bit of a time value expiring advantage. They have the data that the new entrance don't have. >> Right. >> But they have to activate it quickly with this new computer science or else they'll be dinosaurs, right? Nobody wants to be a dinosaur. >> Michael, what's the business drivers, and you talk to customers all the time, that they're seeing and that matter most to them. Is it agility, is it transform the customer employee experience, compliant security? How would you view the pattern around the most important business driver for your customers that are trying to put the business transformation together with digital. Could you comment just anecdotally what you see? >> I think every customer is a little bit different in their journey. Some customers, security is number 1. Because of the kind of business that they're in and it just has to be that way. For other customers it's how do I increase my speed to the solution. It used to be we need a new feature. We'll get it in a year or 2. How about never. Does never work for you? That's kind of the old IT. Now with agile development you've got, what we're doing with Pivotol cloud foundry, you've got companies implementing, these are giant companies. Biggest companies in the world. They're implementing new things like in 2 or 3 weeks. It's amazing how fast. Speed and as a chief executive, that's what you crave. How can I take this new requirement that I heard from the customer and turn it into a feature that I can go offer very, very quickly? That's what you want to be able to do. It's what we used to be able to do when we were little tiny cubs. How do you do it with 200000 people? >> I want to get your thoughts on a trend that you popularized early on in your career, the direct business model, you also had the just in time manufacturing kind of ethos of build it, build to order, really streamline efficiency. So I want to kind of take the leap to now a new generation with cloud native where you have workflows and efficiencies. You have integration. So in a way the customers are now going direct to their customers and wanting to compose and build solutions. As you said on stage, these are going to be new problems that not yet have been identified. New solutions. So that customers have to be what you did. They got to build their own. So they got to build their own, they got to have the suppliers, they got to have the code. How do you see customers being successful if they want to take that efficiency approach? Kind of be 5 nines if you will in this new modern era. Because this is the challenge that they have. They have to build their own. They need suppliers. They need you guys. How do you see the customers being successful in that scenario? >> Yeah, I think what they're trying to do is shrink the time from when at that point of customer interaction, they can use the data to make the service and the product better and if it's like this lengthy value chain with all these different intermediaries and it takes weeks or months or never, that's just way too slow. They want it to be like instantaneous. How do they create that direct relationship with their customers? I only had 1000 dollars when I started so we couldn't really afford much so each dollar you invest very carefully. We just kind of out of necessity came up with some ideas that ... >> You were efficient because you had to be. >> We didn't have any choice, right? >> So when we talk about integration, we talk about it's the foundation of digital transformation, we've talked about IT, security, workforce. One of the things that you mentioned earlier that I'd like to get your perspective on, a different view of transformation is cultural. An enterprise organization as you mentioned has a huge advantage of a tremendous wealth of data. With that amount of data and the need for speed as you just talked about, where, in your opinion, and your experience, is cultural transformation as an enabler of an enterprise to really be able to react that quickly to develop new products, new revenue strengths? >> Yeah, I think it's a big challenge. And a lot of customers struggle with change management. You never want a good crisis go to waste. We sort of grew up in the business where it was change or die, quick or dead. If you don't do it you're gone, right? This was just the way our business, this was just how we had to compete. It's what we grew up in. And I think what's happened is more and more businesses are that way now. It requires the business leaders to say hey friends, we've got a real challenge here and we've got to move faster. It is change or die, it's quick or dead, I think for all businesses because this is the fastest time ever but it's the slowest time relative to the future. It's just going to get faster and faster. If companies ... The only way you get good at change is to do it more frequently. And so if you've never changed anything for 80 years in your company and all the sudden you start trying to change, it's really hard. You just have to start. >> How do you inspire say employees at Dell Technologies who've been with you for a very long time to be able to be open and agile themselves to help facilitate this transformation? >> I believe we built it into our culture that they understand that change is good as opposed to change is bad. If you fear something well then it's bad, right? We precondition people to say okay we're going to change something. Not to say every time we change something it works perfectly. We make mistakes, we learn, we trial and error. That's all fine. Fail fast. But you need a culture where you can embrace change. No question about it. I think a lot of companies that didn't really have that are figuring that out and either by crisis or by leadership or by some combination they're then forced into it. For me, it's what we grew up in. Because hey it's a tough world out there. >> Mike, I want to ask you a final question. Thanks for coming on and spending the time with us. Great interview here. Good length. Recently in the news with a lot of commentary from us as well as the industry around IBM buying Red Hat. I made a comment around the innovation piece of this and I want to get your thoughts on that because when you bought EMC, it was a merger of equals. You integrated that and the growth that you've been successful since then, I want to get your perspective. I want you to take a minute to explain to folks watching, when you did the merger equal with EMC, what happened? You've been successful integrating the organization. What innovative things have you done since the EMC merger of equals? Take a minute to explain, again, there's a lot of moving pieces on the table. You got VM Wares, you got Pivitol, you got Boomi. A lot of moving parts in your plan. You've been successful with the numbers. Financial performance shows it. Take a minute to explain what happened, where's the innovation coming out of Dell Technologies? >> So in hind sight, it looks pretty obvious, right? You take the leader and servers and the leader in storage and you say hey infrastructure hardware goes together. And by the way, if you have the leader of infrastructure software, VM Wares, you put that all together. Wow, that'd be really great. And turns out it was. It was actually much better than we thought. And so customers have really bought into that and then with Pivitol and Boomi and Rsave, Virtustream, Secureworks etc., we have such a complete set of capabilities that customers have said, hey, why do I want to buy from 20 smaller less capable companies and integrate it myself versus you guys will just do all this for me. If they were buying from 2 or 3 or 4 parts of Dell Technologies they'll say, well, why don't we just take the others, right? We been picking up huge amounts of share across the whole business. I'm talking about like 10s of billions of dollars of growth here. There's clearly a consolidation going on in the kind of existing parts of the industry but we've also got massive investments in the new cloud native parts and software defined, and security. It's been a real blessing to be able to pull all of these teams together. We had this relationship with EMC going back from 2001. We were very early supporters of VM Ware. We had a theory of victory and it's played out very well. The teams have really gelled enormously well and the customers have continued to give us their trust. >> I think, first of all servers, storage, networking is never going away. It's the holy trinity of anything in computing. Just looks different and consumes differently. But I think people underestimate the execution innovation that you guys have done. You didn't skip a beat. VM Ware didn't skip a beat. So things have happened, so that was a challenge of the integration. >> Not everybody predicted that it was going to go that way. It's actually gone much better than even we had planned. The revenue synergies have been much larger. >> Well congratulations and thanks for taking the time on the Cube. Michael Dell is here inside the Cube here at Boomi World 18. Dell Boomi World. It's the part of Dell Technologies. We think of them being the power engine for data processing, data growth, powering AI, integrating all the application workloads. I'm John Furrier with Lisa Martin. Stay tuned for more coverage after this short break. (upbeat music) >> Since the dawn of the cloud, the Cube has been there. Connected.

>> Narrator: Live from Las Vegas, it's the Cube covering VMworld 2017. Brought to you by VMware and it's ecosystem partners. >> Hey. Welcome back everyone. Live here in Las Vegas, this is the Cube's exclusive coverage of VMworld 2017. Now I'm John Furrier, the co-host of the Cube with my partner Dave Vellante co-host. Eighth year of Cube coverage at VMworld's since 2010, we've been documenting the evolution of VMware. Next guest is Bask Iyer, who's the CIO of Vmware and Dell. Big time CIO, been in the field. Been in working, real practitioner. Now at the company. Going to the cloud. Hybrid cloud. Bask great to see you. >> Good to see you. Yeah. >> So, Pat Kelson's keynote really relevant. I just want to say, you know our conversation last year and even the year before, you're like Nostradamus. You're like predicting the future. We talk about IoT's and now IoT edge. Are you helping messaging it with Vmware, I mean? >> Well my background having working in Honeywell and so on is that and I saw IoT as a big opportunity. So, it was easy for me to see that it was going to be big but I didn't see, think it was this big. But I'm messaging more with CIOs, more than Vmware to say you're going to miss this wave. It looks like a lot of CIOs are so focused on business IT, they're missing IoT. So, my message is here's a great opportunity for you to get ahead of don't miss it. >> I want to talk about waves cause last year we really made and then you look at what Pat Kelson did last year. We were commenting that he gave the speech of his life. Was that two years ago I can't remember. He really was like under a lot of pressure. His toggle was like a 42, very low. Is he the right guy? He made some bets. Pat's a wave guy. He's all about the waves cause he said, "If you're not out for that next wave, you become drift wood." So, I got to ask you the question. By the way, he's got the great wave slide here. From a customer perspective, they're watching here, Gelsinger lay out a great vision, the stock price is booming, strategy is clear. Andy Jassy from Amazon comes on stage. There is clarity in this direction and the waves that you are on. Now customers have to make the choice of bets, they're looking at the waves and saying what are my bets; The question I have for you what bets are customers making now as CIO and what should they look at, in what sequence, how do they attack those bets and which are the right bets? >> So I think the cloud is a big bet. People don't want to talk about cloud because they think we have been talking about it for a long time but enterprise hasn't really gone much in the journey. There is still a lot of data centers running virtual machines which is great but you really don't have a private cloud set up and then this burst capacity do go to public cloud and so very few people have examples of that. There are some people but not the large majority. What happens in IT is, when you get spooked when you see a public cloud and a private cloud and your not sure which way it's going. So the nice thing about this announcement is that thing's mystery is out right. So you want to go to public cloud here's the way to get it. You want to stay in your private cloud here's the way you can stay in your private cloud. Plus moving legacy applications people never talk about legacy. They always talk about you know if you and I are building a new company to go to a public cloud, do cloud ready, pretty easy. But I have some old applications even in a technology company, how do I move it? So I think that as a customer when I look at past message they said that make sense to me, I can choose to run it on my data center, go to a private cloud and go into Amazon. >> I got to ask you, I know Dave was jumping he's got some good private cloud data to talk about. About a true private cloud data. You mentioned how hard it is to move legacy apps, can you give some illustration and some color to how hard it is. Because a lot of people in the press analyst even startups, It's so easy, I want to just win the enterprise. If it's a clean sheet of paper I get that but there is a lot of important things. How hard is it to really deal with this legacy data center environment in the path to hybrid and public cloud? >> Well there is still, you know people think of, if you think of an ERP, people have four or five ERPs still. You know you were just imagining everybody is just on one nice SAP or one nice Oracle. There are several instances and the reason we haven' migrating to one is not because is not because we don't know how to do it, there is an ROI you know, do I invest the money, do I do this right now, do I get the people, another $400 million to invest in an ERP system. >> Risky. >> Very risky. So you got a lot of these. You've got PeopleSoft which has different versions. You got HR systems, sale systems. So that's what in a lot of data centers believe it or not. How do you move it? Then when you go to a public cloud the guy says are you cloud ready? No you're not. You got a legacy system. >> What's that? >> You just don't want to run this. You want to run it in the most efficient way within a container. So I think people don't see that. The other thing they don't see is at scale it is expensive sometimes to go to public cloud. If you and I are starting a company, we won't build a data center we can probably go to the public cloud. But if I have scale, I already have data centers that I am running at scale and not everything is unpredictable. A lot of business IT is very predictable workloads, right. I know what I need to buy next year generally. So what burst capacity am I looking for? Not everybody requires that, so that's another reason. Security both ways right, people say that public cloud is more secure but there is a lot of regulatory bodies who want you to show and there is a lot of work that I have to certify to show that. So what [CIS 00:05:30] is trying to do is to say we will try to go cloud where we can but there is still 80% 90% of your stuff running in a data center. Help me bridge that. >> Well we talk about cloud, private cloud, we coin this term true private cloud and the basic concept is bring the cloud model to your data. >> Right. >> We tell our CIOs, look don't try to form your business and fit it into the cloud. Fit the cloud into your business wherever the data lives. >> Yeah. >> Is that a reasonable way to look at it and is that what you're doing with your business? >> Yeah, so I'd define it a even more simply. I'd kind of say if you have a lot of people running your data center, you don't have a cloud. I mean the whole point of cloud is automation. The reason public clouds are cheaper or better is because it is highly automated. So that's the trick. If you have people in the data center then it's not a cloud. So get your data center modernized. I define it as private cloud you can call it whatever you want, you can call it automation. But get it automated. Then the scale comes up and your cost comes down. But then when you want burst capacity you don't have to build servers for that you can go to the public cloud for burst capacity. But the big point for me is, people ought to sit down and figure out a strategy. Few years ago people said don't go into infrastructure just outsource it. So we all outsource it and that became a mess. Sooner or later you got to figure out what you need to do. You can't just outsource it, put it in the cloud, not think about it, make it go away. So you see a lot of CIOs coming back and saying I want that but I also want to fix this, how do I automate? I want to get the cost down. That's how I define a private cloud don't have too much cost. >> So are you running a private cloud or? >> Not only am I, I should be modest but I'm not going to be. I think we run one of the best private clouds there is for VMware. Everything that you see in Vmware, the hands on labs you see there is all running on a private cloud at scale. We are extending the cloud to now Dell Technologies. We are taking the same model and cut and paste it. Imagine how much leverage you get from EMC and Dell Data Centers when you extend the private cloud. So for a company like us it's a sure bet. >> So what is it look like underneath? I mean you got vSan running. >> Yeah. You have vSan, NSX everything we talk about. >> Have you thrown out all your arrays? >> No, you don't throw out all our arrays but vSan is. What you see in the market is happening in my data center. So vSan is, there is more and more vSan nodes now but your mission critical SAP and Oracle stuff that I don't want to necessarily save dollars I would want something that is mission critical, proven, ready, certified, etc. So the other things don't go away but your storage is growing. As the storage grows you see a lot more of the vSan growing with that. I use to have a lot of vSan, a lot of NSX. >> You know how many clusters you have now? Probably a zillion. I mean a pretty large number. >> It's a large number of clusters. >> It's just a, the reason I don't know is every month they just amazingly growing. Last year when we talked about it when you asked the question about vSan there was only a few left in my data center. So I deliberately dint talk a whole lot about it. Now it's taking on like fire. >> Yeah >> Right, as the reliability increases, the cost value proposition is taking off. >> Your talking about tens of thousands of vms and petabytes of data. >> Yeah, multiple petabytes of data. Over 60% of that is growing. The growth mark is really large in the vSan as well. >> I got to ask you the journey for the CIO and the CXOs out there, cause there's multiple CXOs. You've got chief security officers, some say chief economic officer because of crypto currency block chains coming around the corner. We got to talk about block chains because next year it's going to be in the wave slide. Cause decentralization is all about block chain. There should be a computing areas there. They all want to get in, they don't want to screw up. I need the head room but I don't want to make any move too early to get over my skis or foreclose an opportunity. So what's the path, Are they getting there house in order with the private cloud as a stepping stone to hybrid cloud. What are some of the day in life of the CIO right now because what we're seeing with the data is true private cloud on premise is growing really well. It's not declining in any capacity. That where the action is right now more than hybrid clouds. >> Yeah >> What's the CIO doing, is that the trend that you see, what's going on in their world? >> Well there are three or four things going. Then their SAS application that compute is going with that SAS vendor. So that is happening a bit. But I see the private cloud growing. Right, you know, I don't see it disappearing anywhere and I talked to my other CIOs and say should I be saying this or is it true or not? And everybody say yes it is growing and so is SAS and so is public cloud. But you know, a big majority of Vmware Compute is run on a private cloud and so I see it grow. So what the CIO's would look for is I want to run my private cloud efficiently but I also want to I don't want to have this large boxes for burst capacity. Say I have a Thanksgiving sale or a Christmas sale I don't want to have boxes sitting doing nothing. Can I take advantage of the public cloud for that and then cloud ready when I want to do some experiments on the newer development, let me try it on the public cloud. My feeling is my stats tells me and you guys are the experts on it is. If you have a scale at some scale, if your on a good private cloud the costs are going to be better for you. That's what my experience tells me. >> Because some of the things are predictable like hey retail seasons here, I can go burst in the cloud for that. >> Right. >> Then everything else kind of overflow to the cloud auto scaling. >> The key is labor. >> Yeah >> You could take labor out. So I just want to share some numbers with you guys. >> Sure. >> We so, what we call the true private cloud you're calling private cloud. >> Yeah. >> Growing at 33% vs the infrastructure as a service for the public cloud going at 15%. >> Wow. >> It's a 10 year forecast. We have true private cloud at 230 billion. The infrastructure as a service public cloud at 150 billion. So the biggest market growing the fastest to your point, SAS is bigger than both. >> Right. >> That's growing really really fast but it's the IT labor piece $150 billion coming out of labor going into, then their R&D and shifting to analytics and >> Value. >> Transformations, value producing things. >> I think that is the transformation. The transformation is labor is going out, automation is coming in. So I can put that on DevOps or the business kind of transformation projects. That's good to see. That's where intuitively as a practitioner I say, but it's good to have the data. I'm going to go read it up and see. That makes a lot of sense to me. >> Pat Gelsinger actually made a quote on the keynote I thought this is why I was honed in on that is that. He actually said shifting to value activities. That's analytics, you called vendor R&D which is basically a way to fund some of the new project where the hybrid and public are being operationalize to be predictable to some level. >> Sure exactly. >> But I totally see that the hybrid cloud is stalled in my opinion you guys can comment on it but based on my anecdotal hundreds of shows we go to it's hyped up beyond all recognition. >> Yeah. >> But it's happening after private cloud is set up because the operating model of the clouds got to get set up and it's just a law for the enterprises. >> Good points, maybe bursting, maybe some DR, but it's not a federated, set a federated apps or is it. >> At least I don't see it that way. I mean so things should be simple but not simpler is what they say. You got to get your house in order. I mean you can't, I mean I made the mistake of saying let's just outsource it because I don't want to think about it. This is the same thing that we are talking about let's just put it all in the cloud. What do you mean, I mean there are legacy apps. You still have them running at a good cost. You still have to know it. So I'm little old fashioned that way to say your house in order and have the options open for burst and other kind of things that you want to do. >> Well digital transformation also has a lot of pressure on top line revenues. So now >> Yeah. >> You can't just put the paint a side and not look at it. >> Sure. >> Put it in the corner. >> But look, IoT, we talked about this. You're going to have to set your whole business being censored. That needs a lot of late latency and other kind of issues lot of data. You need to be better have a good private cloud story for the IoT. Not everything can be put on the public cloud to make it happen. They just don't have the latency. There's law of physics still. So like a car is going to be a data center more less right, you need to make a response in a very short time. Factories have to have responsive systems and robotics. You can't go traverse the internet, go get a data from a public cloud, come back to make a decision on robot. So don't ignore as all I'm saying. Do everything but don't ignore it. >> The future, let's talk about future. AI is here, that's all also hyped up beyond all recognition but I love AI because it's got a software aspect to it. Machine learning super relevant. Block chain, Pat Gelsinger in his keynote really address and I thought a really clever way to weave this in, decentralization. >> Yeah. >> I see we all know it distributed computing is. >> Sure. >> Centralized database can be hacked. Distribution and decentralization around blockchain is interesting. So if we're putting our futuristic hats on. >> Yeah. >> What is IT look like in a totally non controllable, fully instrumented, blockchain crypto currency market? Is there going to be IT coins? I want some IT. >> I think so, I mean it's exciting, the only the thing with blockchain in enterprise is not the technology, it's our ability to think creatively on it. Right we are not able to envision these kind of things yet. It'll come in a year, I think it's our. We have to sit down and think about how to take advantage of that it's pretty exciting and you know we still have simple issues on you know. We know we can't centralize everything. That we've tried for years and years and years it's gone already. Now I want to decentralized, perhaps use technology like this to make sure I can still control what I want to control right. So the thing with block chain internally when I talk to people is, don't show me a proof of concept of technology I get the tech. What is the use case? >> Yeah. >> So we have to use our brains and I think in 6 months we will have it. We're just not there yet completed . >> That's where the destruction vector will be. >> Right. >> If anyone is doing in IT coin token you can say I'm interested. >> IoT we talked last time it looked like vaporware and now we have examples and every bodies doing it. I think block chain is definitely there. >> I mean supply chain could be applied to network with packets as we would say at the edge. Bask thanks for coming on the Cube. >> Sure, thank you. >> Great stuff good to see you. Cube coverage live here in Las Vegas with Vmworld 2017. We'll be right back with more coverage after this break. Thank you.

live from San Francisco California it's the queue at vmworld 2014 brought to you by vmware cisco EMC HP and nutanix now here are your hosts John courier and Dave vellante okay welcome back in when we are live in san francisco california at vmworld 2014 is the cube I'm John furry with Dave a lot day our next guest is ecology about the president and chief operating officer VMware welcome back to the queue great to see you thanks for having me again Dave appreciate it looking good the question I want to get get to you right away as vmworld gets bigger and bigger and bigger every year and your job gets bigger and bigger and bigger every year so give us the update on what's going on at the top of VMware obviously operationalizing cloud and with air watch end-user computing I'll see several engine data center you're still on your mission what's the big change or impact to your business yeah so at the top of VMware we've recently announced some realignment of our executive staff and it started with myself patent Jonathan or CFO sitting down and having a conversation and how can we scale our company to be 10 billion dollars from six billion where we're at today so we looked at all of different operational aspects we looked at our go-to-market aspects we looked at the strategy and how we run our M&A business and we decided to break things up and I've now got responsibilities continue to have responsibility for the go-to-market aspects our partner ecosystem and i also have responsibility obviously for marketing's of these events in robin matlock our chief marketing officer and i also recently picked up the responsibility to support our strategy efforts as well as our ma efforts so all of that at the same time and I've given up a few of the operational you know responsibilities I've had and given in the Jonathan's and now Jonathan can really look at the back office and make sure we're built to scale operationally and this is freed pad up than to really focus his efforts and I'm on each of the strategic initiatives we have around the software-defined data center the hybrid cloud and our end user computing components and and it really worked out well the structures work and you know we have a great executive team that really like to work together yeah you got so you got guy running the trains on time in the back office you're watching the chess board has stringing the products together trying to build out the division exactly yeah exactly so I got I got to ask you about just in general the the overall plan with MA for instance obviously AirWatch very successful position pat was kind of glowing about it didn't give specifics certain a lot to do growing market a lot of white space is a lot of new things like docker obviously evo rails and I'll see an end user side before before we get the kind of that vision talk about air watch how is that done can you be specific about some metrics yeah so you know we're very excited about the air watch acquisition obviously it took place earlier this year and you know we've achieved everything we expected to achieve out of that acquisition it's really you know hit its mark based on the business hand when we built as we went into the acquisition and what I'm really excited about now is you know how do we get leverage how do we get economies of scale on leverage ally existing VMware footprint that we have on a global basis to really help bear watch expand deeper into our large accounts and faster internationally so as you could imagine VMware having a large international footprint AirWatch did not we're leveraging our international footprint to get air watch deep into parts of Europe and Asia and Pacific where they haven't been in the past and then the last area leverage we're really excited about is you know it was just last month when we put the air watch product on our price list that now gives not only VMware core sales folks the ability to sell it into the market but also our channel so now our channel has the ability to sell if you will you know all of the air watch products into the market and not just do it themselves in their channels so there's a lot of leverage we're going to get so go to market seems exciting a lot of action going on talk about the name change is obviously there's been some that we've got a decoder ring blog posts were putting together around okay you got you got the air name vCloud air a lot of stuff changing on kind of the nomenclature of some of the what's the rationale behind that was there a method to the madness was it just kind of like just trying to align everything not just water vapor anymore yeah exactly no yeah so we actually have a you know under Robin that like our CMO we have a team that focus on naming and branding and when we looked at all the components we have we actually were getting a little bit disconnect is connected and how we take to market our products their brands in their names so we've decided to streamline everything everything always mark starts with a small D so now we have vCloud air right for you know our hybrid cloud we have V realize which is now our suite of management automation and provisioning tools and operation tools so we just thought it was the right time to do it we had this great event called vmworld to take our new brand and naming conventions into the market and you know everyone seems to be responding quite well to it everyone recognized V something around VMware and we're just trying to streamline that across everything we do so there's some some consistency in our naming because they're not going to call this the VQ I'm actually I'm very open to doing that to hit you are a TM world and if you want to change the name we can make that announcement right now my stag Dave and I will sell right you're running out that I'm just asking I don't run M&A now so you guys pretty much I think nailed the docker positioning obviously this this conference I mean announced a big partnership OpenStack you know there was a lot of buzz about that before these disruptive technologies seem to have a good playbook for saying okay how are we going to address these how are we going to embrace them and how does I was going to help us attack art am so we started to pool the other day though I got to ask you this so who gets to 10 billion first AWS or or VMware so you mentioned how do you get to 10 billion now Behrendt yesterday at the analyst meeting I thought asked a very good question he brought up he basically said this conventional wisdom out here that Amazon is going to rule the world he said I don't I don't agree that said there's at least one other guy that doesn't agree you obviously didn't agree so I want to talk about that it's the one piece that is still hard to understand because you got you know guys like Andy Jassy I'm one end of the world saying okay this is what the world is going to look like and you guys like yourself and pat and joe tucci say no no this is what the world is going to look like and certainly you talk to customers are they are you guys both right you both is one wrong is one right what's your take on it well I obviously can't comment on whether they're right or wrong but I can give you our views and pay nobody really sad right we'll find out in a few years I you know during during the keynote yesterday I thought bill fathers had a great slide to talked about the amount of workloads that are on premise versus the amount of workloads that are off premise in the public cloud and still to this day less than ten percent of the workloads are in the public cloud and even if you look out many years from now there will still be you know less than twenty percent of the workloads in a public cloud so the opportunity still exists in private clouds and on-premise but what we need to do is we need to make sure that we're not locking any customer into a or strategy is it on premise or off premise is a hybrid cloud or as a public cloud or is it only public cloud and hybrid cut it has to be in an strategy that's why we tried to articulate the power of and and that's how we think we're differentiating ourselves in the market so we don't think about it as we're competing against the public cloud providers because we have a differentiated platform we're bringing this hybrid solution to market to what we call hybridity that allows our customers to move workloads you know inside out and outside in and when we pull all that together I think the winner will be the people who can truly deliver a hybrid cloud infrastructure and allow companies to seamlessly and securely federated workloads and move them on premise and off-premise and that's our focus so I like that strategy I mean basically you're saying we're focused on the customers you got about half a million customers now we have half a million customers and fifty million virtual machines under metal the strategies of you if you service those guys you're gonna you're going to do well and I and I buy that at the same time Carl in a way I feel like well you may not be competing with the public cloud AKA amazon your customers in a way are and what i mean by that is there's pressure from the corner office yeah now you have to be their advocate and help drive those costs down you've cited I think yesterday you started but look when it comes to security reliability availability that's where we're going to win that's our spot so my specific question is what do you make for example of the CIA deal a company like Amazon was able to take on a company like IBM and knock them out is that a unique corner case or I wonder if you could give a perspective on that no I think I think as we go forward we're going to see more and more if you all vertical clouds start to emerge you can think of the CIA transaction with AWS as a vertical cloud specifically to serve the CIA you know department and I think you'll see more and more of them emerge in the future and it's a very competitive world that we live in right i mean everyone bid on that except for vmware because we didn't necessarily have our product in the market for the federal government we didn't have our certification to service the federal market but now we will have in the very near future all assertive certifications we need to build a vertical cloud and go and support you know department of defense agencies so i think in the future it's going to be a competitive battleground everyone's going to buy for it but at the same time you know i think you know people can over rotate and say hey they won that and that means they're going to dominate this market this market is still very immature it's growing the majority of the workloads are on premise and I still go back to the fundamentals of the hybrid approach that you talked about to securely and seamlessly move workloads I think you know we're well positioned and but time will tell right and well the average age of an enterprise app I think it's uh almost 20 years one of years those actors gonna disappear overnight yeah no they will not disappear and again just remember that slide from bill father's presentation yesterday I remember it's a lot of DNA from BM worldstar 50 year 2010 when calm originals to CEO he laid out the vision and it's happening maybe Linda different for how you get there pivotal now out separate company yeah I got to ask you the Pat Gelsinger question I get in some comments here and LinkedIn people from my friend John bare ass CMO mint ago who worked at padded Intel people tend to forget Pat led the Intel team that designed for 86 he knows his stuff technically pad certainly as a technical person so Pat's got some time freed up you're doing the MA is Pat yesterday is you guys playing defense or offense of course was packing say offense you know he's an offensive player so did you really think he was gonna say detail I didn't I was actually saying he's an offensive nobody came up in the cube earlier somebody said oh thank you but I said no how had a player that's he doesn't play defense been knowing bad so I'd ask you the same question what is the offense for your plays in strategy go to market for VMware what hills are you going to take down first given your base position you had a lot of clients you're adding value certainly that's cool but as you go out and compete and win what's your offensive strategies so listen the thing we do every year at vmworld as we come out and we go on the offensive right we're a very disruptive you know technology innovative lead company in a very positive way disruption can be viewed negatively but I think we're a very disruptive company in a positive way and what we did this year is we absolutely went on the offensive we looked at the market dynamics we looked at the shift in how people might want to consume technology in the future whether it's open source OpenStack or this whole emergence of the containers that are happening so if you just stop and look at where each of those are at OpenStack is still very immature you're not going to find a lot of people have built big implementations of OpenStack successfully containers right has just emerged in the last if you will six months we're actually recognizing that as a potential market you know movement and we're embracing it so this is an opportunity for VMware to say we're not trying to defend our strategy we're not trying to defend our turf we see containers we see OpenStack as a market expansion opportunity for us and I think one of the things people tend to forget if you go back a decade ago there was many different value propositions around just server virtualization but one of the key ones was it allowed us to break down the silos that existed in data centers for many decades and with virtualization we brought to market a platform that allow people to get easy access to infrastructure in the same form factor so it was a platform play now think about that we broke down the silos a decade ago if we go back in as an industry we start to deploy VMware which most customers have today then all of a sudden now I need to OpenStack environment and let's now think about a container strategy and deploy something like Dockers and you do all on different physical infrastructures you've built a lot more silos and it only makes it that much more complex for our customers and our partners this is why we're now taking to market in a very offensive offensive approach to say support VMware but if you want to run these other things please do so but we believe are the best platform for service delivery that gives consistency and lowers both effects and capex for our customers yeah and you said the consumption is key and this cloud consumption models changing the game on how customers can soon technologies so you're saying hey we want to protect our vmware base but we're going to give them a choice exactly right fictional flexibility a choice is one of our key tenets of our strategy and as our company if you will values so I want to talk about caught I mean it's kind of boring in mundane but when you talk to we have a CIO of San Mateo County coming on one of your customers shortly and there's always a focus on cost when you talk about infrastructure vmware's got a very tough act to follow in it then it's because it it created such a huge cost savings by you know taking all the waste out of much of the waste out of servers so where does that next sort of wave come from there's certainly a lot of innovation going on we're seeing that is it things like hyper convergence what you guys announced this week can you keep that cost curve go is it volume with your you know 4,000 partners I wonder if you could talk about that a little because I'm sure your customers are beating up all the time how do we keep costs going what have you done for me lately Carl yeah absolutely it's a great question so it to your point you know over the last decade we brought our customers a massive amount of capex savings you know you take a hundred widget you consolidate that the tenders an immediate ROI there but you have to remember where you are now not just a computer chua zation company we're a data center automation company and we're taking the core tenants of the cat back savings that we brought many of our customers over the last decade and we're moving from compute and we're doing the same on networking and we're doing the same on storage so if you look at it networking alone right by implementing a technology like NSX as an abstraction in an overlay networking platform you don't need to rip and replace your hardware infrastructures to get network virtualization if you think about our customers who have a whole bunch of servers out there today and a lot of those servers have local did saan them most of them are never being used in VMware environment you're using you know an ass or a SAN storage array around VMware now you implement something like this and you can take advantage of all that unused excess capacity that people already have in the data center that is just three examples of capex savings we're bringing our customers so it's not just that we did it in compute I fundamentally believe we have the opportunity to do the same across the rest of the physical state of the data center now on top of that by implementing you know management automation orchestration and remediation proactive remediation tools across the software-defined data center we know there is massive capex savings and affects a great labor cost acting there you know we can take a server administrator who used to support you know a hundred physical servers now can support 500 virtual machines the optic savings around that is just incredible is the business case greater in your opinion I think with the software-defined data center the business case is even greater going forward because again we're doing it on the server but now network can compute and is the automation tools really start to take shape and form to manage the software-defined data center I think you even drive more value and you know even going back a decade ago everyone thought our play was really catback savings but if you talk to most of our customers why they got massive capex savings even in the early days the amount of affects a savings they got because of how we've implemented our technology and architecture in our data center was even greater than the capex savings so I think when you pull it all together this is a bias statement so i'm going to say i'm biased up front so you can't call me biased but i don't think there's a technology in the last decade or in the next decade that has driven more value both business value as well as Capital savings in the data center than VMware we're out to duty independent I would say the same thing another way Carl I mean it connect the dots there on the effects piece and also you guys do something to find data center hybrid cloud and and use a computer if those things all come home and and and and it happened the way you want you move to your next fail point so I got to bring up the globalization conversation if cloud goes down this path the consumption model will be I want by pay by the drink all surfaces and mobile becomes a huge deal so because globalization outside North America you have different issues data center clouds and I real sovereignty also so what's your take on that you guys have a huge base what's your globalization view in that piece if things start to start to materialize really aggressively you build on your base cloud comes home clouds happen in consumption but is happening what's the global strategy global impact I should say yeah so let me talk about our global strategy and then global impact so first of all vmware is very global if you look at our book of business today you know greater than fifty percent of our business is out in or outside of you know the u.s. and North America right so we're already doing very well internationally and how we go to market and how we're generating revenue across the company what you're talking about as the world becomes more and more global in the context of cloud computing how do we play into that so what we've done is we've taken our vCloud air platform and we said where are the biggest markets in the world for cloud computing it's the u.s. right it's the UK right it's Australia it's Japan it's China and if you look at what we've done is we've built out our own data centers we're addressing probably greater than ninety five percent of the infrastructure as a service market in the world with our vCloud air platform where we're not we allow our partners to do that those 3900 partners that we showcase yesterday on stage cover almost a hundred percent of the cloud opportunity so we're not going to do it ourselves we're not going to be in every country around the world but our 3900 partners are in over a hundred countries and we're servicing the cloud market opportunity directly and indirectly across vCloud air in the vCloud air network getting the hook but i want to get that partner thing is just to kind of get pivot quickly for quick comment on that AUSA to partner networks are huge they care about margin expansion and serving customers what's going on with VMware how's that going for the partners yeah so I guess it depends on which type of partner were talking about but I would say in general you know our partner ecosystem is alive and well and all you need to do is take a few steps down over there and go look at the solutions exchange floor and you'll see every technology company in the world that is either integrated or wishes to integrate with VMware in one capacity or the other and it is our responsibility just like we have over the last decade to bring our ecosystem along with us to enjoy the rich opportunity we see in the mobile cloud era the boots are big the booths are packed v Emeril's rock and i'll give you the final word but the bumper sticker on the show this year as the car drives away at down out of san francisco what's it say about vmware what's going to say in the bumper sticker that's a great question what do you think i should say Pat kelson had a good one brave new IT yeah well that's our motto it's the brave new IT but I actually think what it will say is let's go do it again we've had a hell of a journey with our customers in our ecosystem over the last decade and I say let's go do it again over the next decade and disrupt this market in a very positive way and break innovation and technology to market each in every year Kaiser by president and chief I promise of VMware making moves on the offensive vmworld 2014 we'll be right back with our next guest after this break thanks