>> from the Silicon Angle Media Office in Boston, Massachusetts. It's the cue now Here's your host Day Volonte >> Hybrid. Welcome to this special edition of Cube Insights. This is the Cubes 10th year at VM World and leading up >> to V M World. >> We wanted to provide some data in some analysis to you all, and we're working with our partners at E. T. R Enterprise Technology Research. We first introduced you to them when IBM consummated the Red Hat acquisition and they provided some data. E T. R is affirmed. That does really detailed and fast ongoing data. They have, ah, large panel of end customers that they talked to about spending intentions, covering virtually every company in the Enterprise. It's it's great stuff. We reached out to them and came up with a number of questions that we wanted to address around Of'em World and VM where, so let me just start by showing you the questions that we ask them to help us with. And we did essentially what I call drill down survey. So we took their existing data sets. They just did a survey. They completed one in July on spending intentions for the second half of the year combined that, with all the time Siri's data that they had. So these are the questions that really are top of mind for I t decision makers in our community. First of all, what's the appetite for VM? We're spending the second half of 2019. We'll share some data on that. There's a second point is there's narrative out there that that containers are going to kill the M. Where, well, is that true? What is the day to say? How about Multi Cloud? It's the hot topic who was best positioned in multi cloud not only within the VM, where ecosystem but overall, obviously, the M, where has designs on multi cloud and is considered an early potential leader? How about NSX when VM wear but nice era? It changed the game on networking, changed their relationship with Cisco. How is Ennis Ex impacting spending on Cisco? Particularly, obviously a networking. The fifth question that we wanted to address is how is public cloud affecting the M where spend we know public cloud is growing faster than on Prem. What's the impact on the M wear? And then finally it was announced in the press that VM wear was going to acquire Pivotal. Why would that be all right? So let's get into it. The first thing that I want to address is the first question in spending intention. So this slide really shows the results of the second half survey. It's 600 >> and >> 93 respondents representing almost $300 billion in spending power. And so it's actually they were asked what you're spending intention intentions For the second half of 2019 you could see 41% of the respondents said they're going to spend Maur, and only 7% said they're gonna spend less. About 45% said >> they gonna hold firm >> small number 5%. So we're gonna add new and only a tiny infant testable. 2% said they were gonna replace the anywhere, so that's pretty good for an incumbent. And essentially it Sze holding serve and maybe doing a little bit. But even better than holding serve on. So So we saw. That is very positive. The next question that we want to address is the narrative of containers will kill the M, where we asked Pat Gelsinger about that on the Cube years ago, he said, Hey, we're gonna use this as a tail wind. We're gonna embrace containers. So the bottom line is there's very little evidence that containers are hurting the M where let alone killing the end. Where this is a portion of the survey, about 461 respondents on you can see that you know, the big big blip early on back in July 27. Dean. Big uptick in spending, and since then it's been relatively stable. But the important point here is the number of shared accounts that we went to essentially container customers and asked them about their VM wear. Spend. I say we eat. TR did. This is what they do on an ongoing basis, and you could see the number of shared accounts back in 17 was only eight. But as you go to the right hand side, the more recent surveys you're talking about 361 shared accounts of the data sample got much bigger. No evidence that the M where is being negatively impacted by containers kind of affirming the assertion of Pat Gelsinger. Let's talk about multi club. I have said that multi cloud to date has largely been a symptom of multi vendor It's cos acquiring Cloud Technologies for specific workloads. Its shadow i t. It's pockets of cloud activity versus a coherent strategy to manage across multiple clouds. True Hybrid Cloud. We're in the early stages, so the data here, in our view, shows that multi cloud really is jump ball. Um, Interestingly, however, Microsoft and Google is showing momentum. So with this slide shows is the cloud spending intentions. And we picked, you know, the top five players there, that air sort of angling around multi cloud ghoul with Antos. Clearly Microsoft coming from its large software estate of V M. Where, of course, which many believer are early favorite Red Hat with the IBM acquisition and Cisco. So what's interesting here is Google and Microsoft clearly have a lot of momentum kind of mind share in the market place, and not a lot of hard core spending going on and multi cloud. Everybody has multi clouds, but in terms of spending on specific products, does like Antos, for instance, from Google, designed for to support multi cloud. That's where in the early stages there, but you can see the sentiment that buyers have around multi cloud Google and Microsoft showing momentum. Interestingly, VM wear Red Hat and Cisco kind of, you know, bunched up as the big enterprise player. So that's why we call a jump. Oh, we see it is wide open. You know, Cisco might surprise some people, but it really doesn't surprise us. Cisco's coming at multi cloud from a position of networking strength of each of these players you know has their strength. Google with Antos Microsoft from its software state Veum, where clearly as the data center operating system red hat with open shift Now with IBM service is capability. And, of course, Sisko coming at it from networking and security. So so hard to conclude you know who wins out of this data but wanted to share that with you just in terms of what customers are thinking around multi cloud. Okay, big conversation in the community around networking generally specifically NSX. When VM wear beats us, go to the punch and acquired nice era. It stated that we want to do to networking in storage what we did for servers. Well, what did the end? Where do the servers they really co opted the marketplace changed the game and really became, you know, these central point of server management, and that's what they want to do with with networking. VM where is trying to de position Cisco as, ah, hardware vendor, Cisco is responding with its own software defined capabilities and is an interesting battle going on. What is the data show? This shows that network networking spend intentions for Cisco, the Red Line and the M Wear the Blue Line. You can see VM where NSX is sort of bouncing around but has very high mindshare. Where Cisco it's showing a holding firm, but a very gradual decline, I've said many times. Cisco very impressive company, 60 plus percent market share. They've held that for a long, long time, despite some of the successes that you've seen you by the likes of a risk juniper and F five et cetera. Cisco has held its dominant share, but nonetheless, it's clear that NSX is impacting Cisco's dominance. Certainly from a marketing standpoint, and you're seeing also, from a spending standpoint that NSX is really challenging Cisco. It'll be very interesting to see how that plays out over time. Okay, next question was okay. What about cloud. How is that affecting VM? Where we see the cloud numbers, we see the growth. What does that mean for VM wear? And you can see here this'll cloud customers of'em were spend about 718 respondents, and you can see the number of shared accounts in the sample is substantial. 3 94 3 79 for 69. It obviously changes by by the frequency that e t. R does these surveys and they do, you know, several times a year, as you can see, but, you know, large sample of shared accounts. And there's no question that Cloud customers continue to shift Maur. They're spending to the public cloud and potentially at the expense of the end, where you can see the gradual decline here and somewhat precipitous decline. VM. We're still very strong. Stock price is doing great, but there's a little question in our mind that long term VM where, despite cleaning up its cloud strategy with first the AWS Partnership and also now partnerships with Google and Microsoft, and of course, I'd be Emma's Well, they were first, but having public cloud partners nonetheless, we see that over time there's a riel tension there. That on Prem is not going to grab the market, share that growth that the cloud has. And that is a challenge for VM, where that we continue to watch finally pivotal. Why would a V M where acquire? Pivotal? Well, first of all, this is why Pivotal is not work. It doesn't have the momentum that it wants in the marketplace. You can see it's it's pretty steep decline over the last couple of years. On Dhe, it's precipitous. Ah, drop in stock price. Essentially, Del and the governance structure of Del Technologies, which course owns VM, wear a large portion of pivotal saying, Look, let's let's roll this back in. Let's give the stock price of boost. The stock went up 70 plus percent of the day that thou went down 800 points. And so this is why the M, where would buy Pivotal? You know, it's a forcing function, we believe, from from Del. It also makes sense, del in its family del technologies that has these software assets VM where is the mother ship of the Del software operation? So why not folded in personally? I think they should do it with some other software assets as well. Secureworks del Bumi, Arcee. All candidates to roll in potentially overtime to Vienna where at least portions of it, anyway. Okay, so let's summarize. What are the key takeaways? What's the appetite for Veum warrants in the second half of 2019? Pretty solid, we'd say. Well, containers kill VM where there's no evidence, certainly in the theater. But there are threats. Think about sass. How many SAS providers are actually running? VM where so, as SAS continues to grow in prominence of that is a potential blind spot for VM. Where that we're watching Who's best position in multi cloud? It's wide open. Microsoft look strong. Google clearly has some momentum. Cisco maybe surprises many, but I think it's not gonna be a winner. Take all we feel is, though there's a lot of opportunities, but number one is going to make the most money. And so it's a very important space that we're watching. House NSX impacting Cisco Spend. It's a battle, but NSX is clearly negatively pressuring, pressuring Cisco. How about Public Cloud? How is that affecting the M we're spend? We think it's slowly eating away at on print on Prem including the end, where I want to share with you a quote from one of the customers that E. T. R talked to its ahead of, ah, retail consumer organisation in North America. A long time I t practitioner says Veum wears everywhere that I've ever been. I've been a customer. Longtime VM were customer hair. She means it's the standard, but it's interesting situation to see what's their next step. How do they keep themselves relevant? I think they're always going to be a need for Veum where, especially because the ability to have the privacy of an extended network is key. However, with the cloud based environment and encrypted data, it's gonna be interesting to see how that all plays out how Veum wear deals with that approach. I think their next strategic steps are going to be crucial. I think that VM where has to be thinking long term. Okay, what do we do about Cloud? Remember VM, where early on tried to get into cloud and with its own public cloud option, became the cloud air. It failed. They got rid of it, cleaned up their cloud strategy. But why did VM where originally want to get into that business because they know that's world of growth is so yes, hybrid and multi cloud gives VM wear a lot of runway. The partnership with Amazon has a lot of momentum. I didn't share that data, but it's very clear that AWS uh Veum, where on AWS has strong momentum. And so that's certainly what the e t. Our data shows nonetheless, long term, you gotta ask what strategic moves will Michael Dell make to secure their position in the public cloud? Okay, lastly, whywould whywould vm will require pivotal. That's a duh. Okay, we gonna stated why So So that's the deal, thanks to our friends at E T. R. Really appreciate them sharing the data enterprise technology research If you wanted this, there's so many cuts on the data, it's it's unbelievable. You can cut it by large companies, small company industry applications and every company on the planet. You can compare companies together. It's really a powerful set of data, but also access tools that they have developed very, very nice, really modern version of survey panels. And so follow up with us. Follow up with them if you want more information and watch us at VM World will be covering these and many other issues that are tent year at VM World. All the key execs are gonna be on practitioners, customers, partners on, of course, analysts and the broader ecosystem technologists and John Ferrier stew Minuteman myself on the entire Cube team will be there to celebrate. So check it out, cube dot net and we'll see you next week. Thanks for watching.