>> Live from San Francisco, celebrating 10 years of high tech coverage, it's the cube. Covering VMWorld 2019 Brought to you by VMware and it's ecosystem partners. >> It is 10 years and going strong for the cube coverage here at Vmworld, Vmworld 2019, we were here 10 years back, and looking forward to the next 10 or more. We're at Moscone Center North San Francisco, the cube with Dave Vellante, John Walls. We're joined now by Tom Barsi, who is the senior vice president, business development at Carbon Black Inc. Tom kind of required couple of weeks for you not much really going on in all serious.. >> Tom: Just a little bit (laughs) >> Yeah I mean big purchase VMware, I'm sure you're aware pick up Carbon Black making that announcement official this week. You were in the center of that, that discussion so if you would kind of give us a little behind the scenes peek, behind the curtain if you will of how those talks developed and really back to your relationship with VMware to begin with. >> Tom: Yeah >> Cause this goes back for a while. >> Tom: Needless to say a super, a super exciting week and accomodation of a lot of work amongst a army of people to get us to where we are and obviously announcement last week, around the acquisition of Carbon Black was huge but I think the announcement this week in terms of going into more detail that Sanjay and Pat went to in terms of combining the best infrastructure management with our best app reek cloud, native, modern, security platform with analytics combine that together, I think there is really an opportunity to transform the industry and currently we've been working with VMware for well over 2 years. So 2 years ago Vmworld we announced an exclusive partnership with VM where we integrated with Vmwares newly announced app defense product, which is really around securing cloud workloads, obviously their in a unique position to secure workloads because of where they sit, leveraging the infrastructure and knowing what's good and what should be running within those workloads so they've leveraged that and build app defense and for the first time we built that integration, exclusive integration and for the first time a security operation center has been able to have visibility into the hypervisor. So that's where we started to see that potential and the opportunity and it also gave us an opportunity to really start to work closely with the Vmworld team, understand their culture, understand their community, understand their leadership, their commitment to winning, understanding commitment to really sort of transform in security and it just became, we dated and it became just obvious that there is so much energy between our leadership and theirs, so much energy in terms of vision of you know, securing the world from, make them safe from cyber attacks and so it just made so much sense. So in Pat's words sure it de-risked the acquisition over a period of time but it also allowed us to really work closer together know what we're getting into and really getting super excited. So I can tell you the response from our employees has been overwhelming and their response here at Vmworld has been just amazing in terms of traffic and the partners, customers and all that. >> Dave: I asked Pat Gelsinger 5 years ago if the cube was security broken and he said "Yeah, it's broken" and I was like "what you going to do about it" stay tuned well, we've been tuned. I did an analysis of, and this may be, first of all Patrick is going to take over as to run Vmwares cloud security business? >> Tom: Correct. >> Dave: So when Patrick stated... >> John: Patrick Morelik >> Dave: Yeah, Patrick Morelik CEO of Carbon Black and Pat Gelsinger said that we want to be the cloud security company. >> Tom: Absolutely. >> Dave: Okay, so I love when they lace down aspirations like that, now this now may not be fair to you because you... >> Tom: We've been in the security, yeah. >> Dave: But there's a portfolio there that may not be as familiar with but I'll ask you anyway cause you're going to have to come familiar with it soon. So I did analysis of the Carbon Black acquisition, obviously app defense was in there but if you look at the VMware security portfolio, NSX has a micro segmentation. >> Tom: Absolutely. >> Dave: News case. Obviously, Air watch you know. >> Tom: Workspace One >> Dave: Competing with Workspace Once >> Tom: Absolutely >> Dave: Cloud Corio, E8 security bracket, Trinsic is another tuck in acquisition that VMware did so while their building up this portfolio, can you help us understand how that's shaping out and where Carbon Black fits. >> Tom: Yeah, absolutely. So let's talk about first the opportunity here. The opportunity is to leverage infrastructure management and security portfolio that VMware has and then sprinkling the Carbon Black portfolio, capabilities across that infrastructures, so in betting NSX for network to end point. And embedding works in base one, which we've already done. Embedding it with integrating app defense, which we've already done. The ability to do agent less within the steer, super super powerful. Post close we'll be working on things like that, so basically by integrating across that portfolio you really have the ability to transform the entire security space, and I'll talk about that in a second. But what that means is basically by embedding security across that infrastructure management and eliminate a lot of complexity in the overhead in the bloat you're coming up with basically intrinsic security. The best thing from a human prespective to increase your immune system, you know, is or staying healthy is boosting your immune system and the best way, reason we're doing this, the best best way to secure enterprise is to integrate, embed security into the actual infrastructure and take the benefits of infrastructure management with security, combine it and eliminate a lot complexity, so let's talk just a second about being broken. It's hard for a security guy coming in and saying the industry is broken, I will tell you that but truth is it needs to be transformed there is just no question about it. So let's talk about it just from in point perspective, and then we'll get into the whole opportunity to extend that capability. You look at the end point from a enterprise customer perspective it's well documented that you know Legacy AV was built 20 years ago and not built for the modern tact factor so it's well documented, yes customers still have Legacy AV, it's not, you know it's 35% effective so what have customers done? They've gone and deployed EDR and point detection response, which is what Carbon Black strive has been a market leader hands down market leader in this space in terms of adding EDR's, yet another sensor. Then you want to have the ability to say look we got workloads and there's another sensor for that. Then you want to talk about, hey, vulnerability is coming out and we want to be able to query across the fleet to understand what vulnerabilities were in your environment, tanium like, right, there's a sensor for that. So you know what 2 and a half years ago our customers came back to us and said look we love you guys, what you guys are doing but there's too many sensors on the end point bloating and slowing my systems and my security teams is getting fatigue with all this point tools they said we need a integrated approach, in comes the Carbon Black clouds and that's we're we had the ability to integrate multiple services, NG, next-gen anti-virus, EDR, Life ops, the ability to query across. We've integrated App D for hard workload all those are shipping today, all those service on single, soft, light weight sensor and a modern cloud native SAS back in with analytics, so it's just super powerful and so now you're consolidating on that, you're getting more efficient, you're eliminating overhead and you're making the security operations team that much more effective, now, imagine taking that approach to the broken network and workload and exedra and extending that capability across the entire infrastructure and that really is what we're talking about in terms of teaming with VMware embedding our security capabilities across infrastructure a lot across NXS into work app D into workspace one which we're already doing and again eliminating a lot of that bloat and making our customers more secure and much more efficient. >> Dave: So there's another dimension to this acquisition which I like which is your SAS business, so I think it's about 38% of your revenue, I call it roughly 40% of your revenue, but growing very very rapidly, growing to 70% of the year. >> Tom: Exactly. >> Dave: So VMware has said that this acquisition along with pivotal is going to have add a billion dollars in, basically, mostly in all subscription revenue next year and three billion in year two and it's going to be accretive in cash flow deposit acquisition by year two so all very, VMware actually keeps well generally in acquisitions and so notwithstanding some weird stuff in the economy they usually hit their targets. >> Tom: Yes. >> Dave: You know they intend to be conservative so I really like that and that's clearly the direction you're moving. The other thing about this, a lot of people on Wall street said well it's maybe overpaid for stock and I want to get your opinion. Cause you're out competing everyday and cloud strike is obviously the comparison to use, okay. Say a company is a 16/17 billion dollar valuation you're valuation was 2.7 billion, you look at cloud strikes post IPO's, doc chart, it looks like a bathtub you know, it kind of goes like this and then goes like that because people start to realize wow this asset actually has you know a lot of intrinsic value upon attend it. So in comparing cloud strike with Carbon Black in terms of feature, function, capabilities you know execution and those technology. Is it really that much of difference 16 billion and 2.7 billion (laughs) >> Tom: You know I can't really comment on Crowdstrike's market cap, obviously I respect them as a competitor. >> Dave: Great, great job. >> Tom: I don't have to like them but I respect them as a competitor no question. >> Dave: What in terms of the function and the capabilities. >> Tom: In terms of the functionality look we've significantly close the gap and adding cloud workload capability with app D adding the query kit with live ops and extending that capabilities so from a feature functionality look at VMware is technology driven they kick tires and they do the diligence on technology that's the strength of VMware, they look deep and what they came away with was we have a super competitive platform, you're seeing it in our wins our growth rate you're seeing it with our wins and large customers that I can't really name so from a feature functionality perspective you know we're at parr in many ways we're better now, now if you look at where the market is going look Crowdstrike is going to be a great point product solution for end point. But we believe, that they're going to do phenomenally well but we believe there's an opportunity here, again to integrate infrastructure management that VMWare has security capability and deliver an end to end platform and truly transform across the entire infrastructure of an enterprise so that really where we see the opportunity and the opportunity for growth and then you want to look at our growth rate I mean to your point, VMware does an incredible job and you know you start talking about the reach of VMware and talk about the reach of DellEMC and it's super exciting. >> Dave: Yeah the VMware brain trust is very capable both from a strategy standpoint and a technical, strong, very strong engineering culture. >> Tom: Yeah >> Dave: You saw this with Airwatch so Airwatch when VMware required Airwatch VMware was struggling what was then the VDI business and airwatch wasn't you know number one in the market place but VMware like now crushes, people are making similar analogy with regard to Carbon Black do you think that's fair, I mean you think you can repeat that sort of momentum. >> Tom: Yeah you know I've obviously been very very close to this relationship and I have been sort of the number one fan and cheerleader of this partnership because I just believe in my soul that it's going to be transformative really is so to that point I you know I think and I've talked about it internally what they've done with my serie what they've done with aiwth now workspace one and the ability to take a business from me no revenues or couple hundred million and take them to two billion. I absolutely believe you will see, it's going to take a lot of work but we're going to see rejectorty I've been focussed on if there are gaps we're going to force it in or anything to accelerate the road map to allow us to win and then you're going to talk about the triple acceleration with VMWare and DeliMC so answer I say I truly truly believe that we can take our position to number two and really be number one >> John: Transformative in a significant way a significant word to use. What's that end product going to be that makes you looking at it at this visionary stand point that, this is a perfect marriage this is a fantastic opportunity. You're not you're selling hard >> Tom: Yeah >> Dave: It's a platform really >> Tom: Look it is a platform and at the end of the day we're focused on here as customers we're talking about how do we protect our customers and the best way to protect those customers is to embed the capability you know we did many years back Carbon Black we exposed our data and many of our partners, sometimes we compete with cisco or firehire a number of other players because customers demand the end to end visibility from network to end point. Can you imagine the kind of damage when you integrate Carbon Black and our modern platform are analytics and the ability to pull data from hypervisor the ability to pull data from NSX to ability to pull data from workspace one into a common console and then understand exactly what is happening from an attack perspective and then let's talk about okay, so now you have the visibility it's a 360 degree view of what happening in the network now you want to talk about the ability to orgistrate or imidiate like solve the problem. Well historically it's been security operations center over here and you got IT over there. And there's been this friction because Sycguys says take it down take the server down there's a problem and the IT guys ops, hey, I got run time I got to keep it up so now you have the opportunity again to leverage that management to identify a threat and the ability to seemlessly leverage VMware infrastructure's management tools to instantly reimmediate and orgistrate a problem without the conflict with IT and security operations. So we've actually seen an opportunity to eliminate our friction and create coloboration between those two. >> Dave: And security is broken, it is a do over and to talk to ops team they'll tell you, we're fighting everyday and bombs are dropping, we have to succeed everyday. The bad guy only has to succeed once so yeah they bring in all these tools and a lot of times they don't work together and they have a very hard time to just figure out okay, what do we prioritize on and obviously analytics helping that but yeah, you see that stats after you get infiltrated to whatever 300 days 250 days they even identify that you have been infiltrated and it's just a very complex environment so the do over is a platform that will give you end visibility and doesn't force you to different point tools and it has a comprehensive in a view of your >> [Tom[ That Right >> Dave: Infrastructure >> Tom: That's right and I do want to point out it doesn't mean that we're going to create this platform that's closed. A lot of competitors like to built closed platforms and Carbon Black has always been API driven like open, and the whole point of this openness is to, we collect this powerful end point data and we want to expose that data across the infrastructure so we're exposing it to the network security guys whether it be Vectra or Palato networks or FireMandion depending on who it is. We're exposing that data to splunk IBMQ radar and IBM rasilion and we're going to continue to do that, leverage this platform and all this powerful delimentry and we're going to continue to have this open platform and continue to work across the industry to make sure it's not just our platform from the MDM just across the ecosystem. >> Dave: Well it's something VMware has been strong if this heritage genaty, you know they help you know balance the score card >> Tom: Yeah >> John: It's been a understatement that it's been an exciting week for you, it's been a great two years it sounds like and we wish you success now it's on down the road like he said a lot of hard work still ahead of you. >> Tom: Absolutely, so congratulations on ten years, I look forward being here in year 20. (laughs) >> John: We'll be right back, we'll be right back just taking a break here on the cube we're at Vmworld 2019. Moscone center, San Francisco. (music)