>> Live from Las Vegas. It's theCUBE, covering VMworld 2018. Brought to you by VMware and it's ecosystem partners. >> Welcome back to Las Vegas. This is Lisa Martin with theCUBE. We are at Vmworld 2018, Day One. I'm with Justin Warren. Hey Justin. >> Hi Lisa, how you doin'? >> Good. This is VMware's 20th anniversary and we're very excited to welcome two new guests to theCUBE. We've got Scott Brindamour, the Senior Director of the U.S. architect team from CenturyLink. Hey Scott. >> Hello, how are ya? >> Good. And we've got Geoff Thompson, the Senior Director of VMware Cloud Provider Program. Welcome. >> Thank you very much and hello. >> The 20th anniversary of VMware. You've been with VMware a long time. >> Yes. >> Lot of momentum kicked off this show, not just this morning. You guys said you were in here yesterday. >> Yes. >> Just curious to get your perspective, Geoff, on the buzz and the opportunity that you're hearing, not just from your customers but from your partners as well. >> Oh yeah, yeah. I remember the first one I went to way, way back, even before I joined VMware, when I was at Hewlett Packard. Then, it was a little small event back in, I think it was Los Angeles. Now, here we are in 20 thousand something people in Vegas for the nth year running, so the buzz is amazing. This year, I think more than ever for us, because Cloud is just becoming more and more of a focal point and the discussion and topic area for everybody, so the buzz is incredible. Working with CenturyLink here and with Scott is just like an opportunity to dig deeper on all these relationships, find new opportunities to go all in on the strategy that you guys have really already adopted, look at Cloud Verified and take that to the next step. Yep, great so far and looking forward to more. >> So talk to us, Scott, about the partnership that CenturyLink has with VMware. VMware has a massive amount of partners. I saw a stat this morning on stage. What is it about CenturyLink's offering and VMware that's really better together for end users? >> Yeah, I think it's really in our approach and how we really listen to our customers and try to understand where they are in their journey and what they need and not just throw a widget at a customer, but really design a solution that meets their needs and VMware having a flexible architecture and a vision for the future enables us to not only plant the seed today, but where we're going; a lot of co-development with VMware, a lot of partnership with VMware, a lot of making sure our teams that operate the environment and my team on the front lines work with customers are trained and ready for the next technology. I think I've seen a remarkable change in VMware over the last several years in accelerating their road map and working with AWS and a lot of the other partners. It's refreshing. A lot of our business is private Cloud on VMware. We've been a big partner for a long time and the VMware Verified is something we hold dear and we look forward to the relationship ongoing. >> Yeah, that focus on Cloud came through loud and strong in the keynote today and you mentioned it here, the private Cloud, hybrid Cloud, multi Cloud. CenturyLink has a rich heritage in networking and networking is vital for managing Cloud. So tell us a bit more about how CenturyLink's networking skills helps customers to understand how they can manage this multi-Cloud universe they have to live in now. >> Sure and maybe I should even talk about, the viewers that don't know what CenturyLink is. I've been with the company for 15 years, a company called Savvis, but we've made a number of different acquisitions over the years to gain different technology areas, where there'd be ERP, where there'd be dev opps capabilities in the public Cloud, where there'd be Cloud management platforms, et cetera. Now, we see more data is being moved outside of the data center and more data is being originated outside the data center, so customers are really saying, what do I do with all this data? Where do I put my apps? I can't put it in my four walls. I want to move it to the Cloud. Not every customer is on the same path at the same rate and can accept the change. I think the biggest thing we do is helping customers manage pieces of that portfolio, but it's not just a take-over kind of an old ITO play. It's a co-sourcing kind of play, a co-management model where they may have some skills in one area but deficient in another. We can help them with AWS, for instance. We can help them with the new software-defined V-conformate foundation technologies that VMware is going to as well, and bring the network components as well, so that a workload that's running on premise can work and perform just as well off premise by providing that private network connectivity or public network connectivity to those end users as well. >> You mentioned that partnership idea. I'm keen to understand the partnership you can provide essentially as a service provider. Customers rely on service providers a lot to help them manage their own infrastructure, in conjunction with the vendors. So, tell us a bit more about how your partnership with VMware works for customers. >> Yeah, we work a lot with-- VMware at its roots was a software company, so lately, selling services and selling services to clients that are not just a software skew in a software package, so a lot of interaction with VMware client teams and doing strategic discussions with some of our key clients about how we can bring them to the next generation and buying a private Cloud as a service, instead of just selling them a VMware license and have the customer try and figure it out. So, how do we get a customer on the same path and working together to do a lot of that together with our clients, and really making sure we're a partnership and our sales teams are going out to customers together is a big part of6 that. >> Right. >> Yeah, I think from our side, CentralLink is a strategic global partner of ours, so that means several things. The most important thing is we get an opportunity to have more and more briefings together, go deeper on our global strategy as a combined unit so we can look at new technologies that are comin6g down the pike. You can assess them and decide if there's a customer opportunity there and if there is, we'll bring our Cloud practice team in. We'll look at how we take that opportunity and make it a go-to-market strategy together and then we'll go and do sell with. We'll go out into our field teams. We'll educate them on what the offering is and then VMware and CentralLink is co-selling that solution. >> Yeah, I think a lot of the VMware sellers, the public Cloud threat that they have and the move to the public Cloud, how does that still co-exist with customers? I still strongly see that there's a lot of legacy apps. We were talking earlier about only 20% of workloads have moved to the Cloud. There's still a lot of legacy apps that are on VMware that are their crown jewels that are running their companies. They just need to deliver that in a new model and that's where a partner like CentralLink can help, to move it out of their data centers, to move it into VMware on AWS and help a customer understand what are the right workloads to move there, do I need to replatform it, when is it ready, how do I migrate it and how not to disrupt their operations and then manage it, if the customer doesn't have the capabilities to do it off their own premise and skill sets. It's a totally different mindset managing it off your premise than inside your four walls. >> So when you're talking to a customer at the outset of an organization that has multiple Clouds maybe driven by application type, maybe driven by that on a combination of acquisitions. Where does that business conversation start? Are you starting at the C-suite level? Are you starting there to really help the business leaders understand how to extract the power of their data? Tell us a little bit about how do you help them with a multi-phased approach. >> Sure. We definitely talk to the C-suite, CIO, whoever is leading the strategy but it depends on the company. A lot of that's actually done in the line of business, the more innovative lines of business that are transferring their business that have done a first mover. You hear a lot about shadow IT, where the business is going around IT because IT can't move fast enough. CIOs who are transformative, we're typically working with them and we're trying to figure out where they are in their strategy. Are they an early adopter or are they a lagger, do they not have a strategy and then understand; do they want to take a lot of risk and move quickly. Do they want to do it slowly and not disrupt their business. Depending upon the culture and the risk nature of their organization and what is actually running on that infrastructure they're going to move, you got to make those decisions. We call it, in CentralLink terms, my team talks about what's called best execution venue. We're agnostic. We're obviously a big VMware partner, but we also do resale solutions on Azure and AWS as well, as we're a data center provider and we can put it in our four walls on old legacy dedicated server environments as well. Whatever the right venue for our customer is, which is typically going to be hybrid, some on public Cloud, some on private Cloud, some on premise, some off premise and even more moving out to the edge, that customers want to do workloads in smaller quantities in kind of a dynamic nature, spinning up and spinning down, that we work with the clients to figure out what's the right execution venue; cost factor, who's going to manage it, what's the best place to locate it, does it need to be secure, governed, is their data sovereignty or compliance regulations on it. Then, ultimately, how they're going to scale their business and what their vision is to automate as much as possible and standardize it. You heard it today this morning; it's all about automation. So, how can they automate and how can they reduce the labor that the individual persons on the keystrokes and automate the infrastructure and make it look the same. I think the software-defined data center model that VMware has is a step in the right direction and there's a big uptake on customers in that environment today. >> Yeah, we're hearing a lot today, I think Lisa, of people saying it's customer choice. The ability to automate things but in the way that I choose to do it and transforming at the speed I need to do it. It's coming up quite a lot. Maybe you could tell us a bit more from the VMware perspective about how you're enabling that customer choice and we heard a lot about the automation, so how does the automation work with partners in enabling customers to be able to transform their business. >> For us, it's about we give choice and flexibility so within our program, it's all about making sure that we give everything that we build for ourselves and our end user customers, giving that to our partners. So, in terms of Scott and CentralLink, we give them the tools to go and build the Cloud and then set up the automated operations for them to expose to their end user customers and then we also leverage VMware Cloud on AWS, so we made that available to the program as well. So, our partners have choice in flexibility and ease of operations and then they expose that to their customers as well, so it's win-win-win, I think there. >> Yeah, and the keynote this morning, it was SDDC, software-defined data center from VMware was talked about as a self-driving data center and that's ultimately what we see as well in partnership with VMware that a lot of customers understand the VMware tool sets. Extending that to a new platform that's software defined and enabling automation, that it can ultimately one day drive itself, so customers can automate the deployment of applications they're running on, something that can be spun up on AWS very quickly. Applications can be migrated over automatically with tools, managed and then no one responding to an alert that a VM or an application is down, it can autocorrect itself and it really could be automated in the future. We see that and certainly all the tools and capabilities that VMware puts in place that enable that is something that we subscribe, we use it ourselves and we have our customers use it as well. >> I'm curious what your take is, Scott, on the announcements that Andy Jassy made this morning on the stage with Pat Gelsinger. They announced VMware Cloud on AWS a year ago at this same event. There's been a lot of momentum. &They talked about the different M releases now going everywhere. From a partnership perspective, what does that mean to CentralLink and how do you think that will positively impact your business? >> Well, there's two sides of our business. We have a very large, obviously, networking business and we have a hosting and Cloud and data center business, so we see the two of them coming together. I talked about the data center dying and everything moving off; how do you network that all together, but we have a very large retail customer in the, let's say, fast food chicken business, I'll keep it at that level. We started off hosting a lot of their critical applications that run their stores and understand what's the best place to put stores and store operations. We also, from the networking side in acquiring Level three, they had a lot of the networking capabilities. They now want a single platform to run store operations from a network, from a virtual desktop, from an email, from an order fulfillment, supply chain management, all to be contained in a particular region that you can manage it locally without all the data going back. So, the ability to have a software-defined smaller component that can run it that can not only have the data center and the Cloud component as private, to keep the data safe and non-public, but also the network software-defined on one platform together with one provider that can manage the whole thing. Now you're distributing your data out, the network becomes more important, the performance of the network, the resilience of the network becomes more important too. That environment goes down, you don't sell any more chicken. That's the biggest thing that customers are seeing, is converging of those capabilities together and I think there's very few providers out there that can speak both those languages and provide both of those to clients today. >> Taking those benefits all the way out, for what the infrastructure enables from a cost in speed perspective, the Board of Directors at said chicken chain, what are they actually benefitting from? It might be this invisible software, but from a business perspective, how is this going to impact their business? Selling more chicken? >> Yeah, it's basically, they have a strategy to continue to be in more markets and the more markets they do, the time to set up and deploy infrastructure and have that ready, that's the biggest enabler. To have the store front, to have the store ready, then all the infrastructure that supports the store, especially now you have people, they can order chicken on their phones, loyalty, they can place their order ahead of time and pick it up, they don't have to go through drive-through any more, things of that nature. Everything becomes digitized and the I want it now generation that we live in today, that'll accelerate their ability to deliver services to the store and then react to the changes in the market as they happen. Everything is digital now. That's the biggest thing, is growth through stores, growth through being able to meet the demands of the stores as they change going forward, so very dynamic. >> Awesome. Scott, Geoff, thank you so much for joining us on theCUBE. You're now theCUBE alumni. We'll give you some stickers. >> Yeah, stickers. Great thank you. >> We appreciate you guys sharing what's new. >> Thanks for your time as well. It's such really good VMware. >> Thanks. >> Appreciate it. >> For Justin Warren, my co-host, I'm Lisa Martin. You're watching theCUBE from Vmworld Las Vegas 2018. Stick around, we'll be right back. (techno music)

>> Narrator: Live from Washington, DC, It's The Cube, covering .NEXT Conference. Brought to you by Nutanix. >> Welcome back, everybody. This is day 2 of the Nutanix .NEXT Conference, #NEXTConf. This is The Cube, the leader in live tech coverage and my name is Dave Vellante, and I'm here with my co-host, Stu Miniman. As I said, this is day 2 and today, the keynotes were in the morning. Yesterday, they were in the afternoon. So, when we left you yesterday we went right in the keynotes with CEO Dheeraj Pandey, who gave a very, as he always does, Stu, a very philosophical deep discussion, a lot of commentary from thought leaders and some customers. Somewhat long, although shorter than last year, but that's Nutanix likes to do things. They want you to bake and savor what's going on in their community and their ecosystem. Today, it was all about product. Sunil Potti got up and he basically took us through the products, the new innovations, the strategies, and that's what we're going to unpack this morning in the next couple of minutes and then go deeper throughout the day. So, Stu, it's all about cloud. Two years ago, at the first, the inaugural .NEXT Conference, Nutanix laid out a strategy of moving beyond hyper-converged infrastructure. This is at a time when everybody was pivoting to hyper-converged from the traditional converged, or the legacy infrastructure. And they laid this long term, little bit fuzzy vision about supporting cloud and multi-cloud. At the time, it was really focused on migrating off of VMware onto other platforms, but they sort of teased us with a vision of cloud. Today, we saw that vision come into a little bit more clarity, but there's still a lot of questions. Give me your summary on the keynote today and specifically, this Nutanix strategy of being the cloud operating system. >> And Dave, I think vision is the right term because unlike previous announcements by Nutanix, a lot of what they laid out here are things that in development. The two big announcements that they talked about yesterday and went through a little bit more today, Calm, which was an acquisition that they had made last year really, to be able to help them try to be that management across multi-clouds. That's in process I believe, if I remember right, it's the second half of this year, it will be shipping. I got a note from a friend of mine, and they're like, okay this is the 687th product in the industry that's trying to solve this problem because everybody is trying to solve this problem. Microsoft wants to be the player here. Companies like CA want to be in the lead here. Of course, Amazon would like to manage everything because just put it on Amazon. So, why is Nutanix position to be the control playing layer of a multi-cloud world. Nutanix is a small player. They've got some good pieces. They're starting to touch some of the environment, but I'm not sure. In the second one, the zee or jee cloud services, that's not- >> Zee, Si, jee (laughs) ... >> It's spelled X-I and we've heard multiple pronunciations. We'll get Sunil on this and get him- >> X-I is, as you told me this morning, the last two letters of Nutanix flipped. >> Yeah, so, it's a DR service that they're going to deploy. It's in development right now. I don't think we know anything about pricing yet. It's not going to ship until the first half of next year, is the target for that. But really lays out, as to, I think we really want to get to the Google relationship and beyond. How does Nutanix get to be more than just an on premises infrastructure layer. They've already sold to service providers. I've talked to companies that not only build their infrastructure, but sell services based on using Nutanix as an infrastructure, but they're going to take that full Nutanix stack and make it available in Google data centers around the world, and we expect them to expand those partnerships and what Sunil was hitting on at the end of his keynote is, the terminology they used is your cloud native, your mode one applications, a lot of times those start in the public cloud, and sometimes those come back to an infrastructure like in Nutanix, where I can run it in a similar operational model. And then, do we take our mode two applications, the big legacy, the thousands of applications that we have, do we try to shove those in to the public cloud? And the challenge there is if it's not the same stack on both ends, it's not the same operating model, there's challenges and I know we wanted to use that out a little bit. >> So, Stu, I had a conversation with Paul Moritz in 2009, where he said to me, "The advantage that Amazon and Google and Facebook have is that they have homogeneity in their data centers." And he said, "For us to succeed in cloud, we have to have homogeneity in both on prim and in the cloud." And so he, at that point, indicated that the VMware strategy was going to be putting, essentially, VMware in these clouds and the cloud service providers, as we all know, that manifested itself in vCloud Air. We've heard the story before. How is this different? >> First of all, vCloud Air, most people would agree, a failed strategy. >> Who would not agree with that? (laughs) >> Right. The biggest challenges we saw on vCloud Air when I talked to the community is VMware said, "Wait, we're going to build it ourselves and run it," and customers were like well, I've got lots of partners, and they're like, well, we'll partner with Savvis. And Savvis made no margin on this. Couldn't do anything else. They tried to go to lots of other service providers, and they were, I don't know how I add services, I don't know how I add value. >> So, how is this different? >> You look at this and say okay, well, Nutanix is going to start with building it themselves because they want to understand it. I've talked to service providers here that say, "Hey Nutanix, we have experience and we know how to do this. We could advise you on this." Of course, Nutanix, they didn't come out and say this is the future, everybody run every service on this. They say, hey, we're working on a DR solution, we're a little bit measured. This is where we're going. I think there's time for it to mature, time for Nutanix to work with their partner Ecosystems. The Google announcement gives Nutanix credibility, but a lot of it is pressure leased slideware, if you will. You say, "Okay, great, I'm going to take Z and run it on GCP." Well, this is a product next year that, maybe, will probably run somewhere with Google. Where's the details? >> Okay, talk about lift and shifts, too. >> Thanks Dave. We talked yesterday to one of the doers, one of the practitioners of Nutanix, and they said, "Hey, I'm looking at containers." And we said, "Hey, are you looking at Nutanix for this?" They say, "Well, now that I hear they're working with Google, who's obviously a thought leader in driving that, that will drive them closer to us." So, question is, the Z cloud service is based on AHV. So, if I bought in, there are some customers who say "I want a virtualized environment that I can mirror," but most of us look at it and say virtualization is kind of heavy for taking something to more the public cloud. If I containerized, then I can use kubernetes, and I can move applications a little more. Debate we're having internally, Dave, often is how much of the stack do I have to have to complete hardware all the way through on both ends? Do I have something like kubernetes, which allows me to take containerized applications and move them, because lift and shift, I was at the Cloud Foundry Summit, and it said let me build my new applications on the platform, and then I'll start migrating some over so I have that shared management platform to hold the environment. But, it's challenging. The same thing we've had discussions. Amazon, there's certain applications we build there, Amazon would love you to take all of your applications, but it's not trivial. Porting something over is not easy, is one of the points that Nutanix was making, and we've heard from the community that Amazon really doesn't want you just to trying to lift the whole thing and shift it. You should be doing some refactoring, or start pulling apart your application- >> They want you to pull change the operating model. So, Stu, is this a blind spot for Nutanix? Let me back up. We asked Pat Gelsinger, when Docker and Core OS came on the scene, what does that mean for you? He said, "Hey, we've got the best container in the world. It's VMware." And we all kind of went, mm, I don't know. Is this a similar head wind potentially? Is this a threat that Nutanix is so VM focused versus containerize? Or can they just embrace containers? >> Great question. Something I want to pose to the Nutanix executives, Dave, because there's multiple paths forward. When we asked Amazon a similar question, they said to get from your legacy data centers to public cloud, here are the eight R's, as to refactor, re-platform, redo this, things like that. There's more than one solution. As we know, customers have lots of applications. There's some that you're going to leave them sitting on. That old hardware in the back corner and run it until that thing burns into the ground. >> Running on CMS. >> Absolutely, Dave. Many of those things got moved into VM environments and are going to stay there for awhile. So, unfortunately, everything in IT tends to be additive, and we've got all of the debt of ... >> Don Tapscott. God created the world in six days, but he didn't have an install base. The technical debt. >> Technical debt. >> All right, Stu, we got to wrap. This is day two of Nutanix. We're going all day long. Today, heavy executive, partner and customer day. We have Sunil coming on. We're going to go deep on products. Chad Sakac coming on from Dell-EMC. We got Dheeraj, of course, the CEO. Stay tuned, everybody. Stu Minima, Dave Vellante. We'll be right back after this short break.

(upbeat music) >> Live from San Francisco, California, it's theCUBE at VMWorld 2014. Brought to you by VMware, Cisco, EMC, HP, and Nutanix. (upbeat music) Now, here are your hosts, John Furrier and Dave Vellante. (upbeat music) >> Welcome back, we're here live in San Francisco for VMWorld 2014, I'm John Furrier with Dave Vellante. This is theCUBE. We expect to sue for the noise, get the tech athletes in from CEOs, entrepreneurs, startups, whoever we can get that has that signa. We have Pat Gelsinger, the CEO of VMware here in the house. Pat, great to see you again, great keynote. >> Hey, thank you. >> You've been a great friend of theCUBE, five years now running, just want to put a plug in. >> Five years? Wow. >> I want to thank you for this amazing gift of pens we got from the VMware Opening Campus Day. Great pens, celebrating you guys opening up, officially, the Palo Alto campus, how's that going? What's happening with the campus? >> Well first, the campus opening was great, thank you for joining us there for it. It really is just a fabulous place. I mean, a beautiful campus, and we have the greatest employees, so we wanted to give them the greatest place to work. The campus has gone fabulous, we've opened up almost all the buildings now on campus. Just two more to build out, and we're hosting all sorts of wonderful people who want to come in and see the coolest place in Silicon Valley now. >> It's like China over there. New cranes going up, and putting new buildings up there. Are you guys done with construction there? What's happening? You guys are expanding like crazy. >> Two more buildings to go. >> (laughs) Two more buildings to go. >> Then we're done for a while, so (laughs) almost there, almost there. I got worried when there's so many cranes going around. Do I need all my employees to wear hardhats or something? It's like, no, we're soon done with that, and we can get everybody to work. >> Robin kicked off the keynote before you came on, she talked about staying the course, and use a computing hybrid cloud server to find data, so then you came out and laid out, essentially, the vision of this transformation that's happening. What's the state of your vision there? Expand on that keynote, and share with the folks who might not have caught it live. What was the crux of the presentation? 'Cause it had a lot of Pat Gelsinger vision, it felt like it's transformative. We've even had some guests on talking about commentary, the announcements. Are they playing defense, offense? You're not a defensive player. You're an offensive player. So talk about the offensive moves for VMware, and how that keynote struck a chord there. >> The first one really started with this phrase, "brave, new IT," and the nexus of that was all of our VMware faithful. The V admins, the people who've been using this. They are becoming critically important to the businesses that they serve going forward because not only is it about them doing their job, but with SDDC, Hybrid Cloud, end-user computing, it's them redefining the entire infrastructure for the business. And when the CEO looks down, across his leadership team, who's the most competent person there to navigate through all of these IT trends that are merging to, necessarily, redefine their businesses? And we call this liquid business that's changing. So very quickly, we're seeing that businesses redefine themselves from education, to government, to transportation. Uber, today, not owning any assets, has a market cap equal to that of Hertz and Avis combined. We're just seeing these things emerge so quickly. And who's the smartest guy in technology in the room? The IT guy. Out of that, we laid out, obviously, our continuing progression with the Software-Defined Data Center, updates on major projects, bringing those components together in a big way. One of our first, and I think, most significant announcements today, was a lot of the choice announcements. We are adding an OpenStack distribution, so if you're a vCloud user, I'm going to have the programmatic ability of infrastructure through the OpenStack API's, you now get it with VMware. We also announced an embrace of containers. Containers, this 20-year overnight success where all of a sudden, lots of discussions around containers, and how can I use containers as a new app delivery model? Well, the best way to deliver apps for an enterprise, on top of the VMware infrastructure. So we announced a relationship with Google and Kubernetes, with Docker, one of the leaders in that space early, and how we're going to make them containers without compromise in the data center for enterprise customers. >> On the container piece, last year, we asked you, here, on theCUBE, about Docker and containers. You were like, oh, containers have been around for a while. What made you go, hey, this Docker thing's got legs? Was it the community thing? Part of the Open Source tie-in? Was it the interoperability? Containers is not a new concept, as you had pointed out, but what's changed for you and VMware over the past year to make that happen? >> And it still is very early. Let's be clear, John, that we're very much in this early, nascent phase, right in the hype cycle curve, you know. We're way up, we're probably going to go through the valley of despair in this technology, but very quickly, there's a broad set of these third gen developers that are saying containers is a cool way for me to package, deliver, and manage app deployment over time. We're saying if that is how people want to be able to deliver apps, then we, the preferred infrastructure for delivering apps, we're going to embrace and enable that, as well. So very quickly, it came together, and we engaged with Docker and Google as partners, and they said absolutely, we want to partner with you in this space, so all of the pieces just snapped together overnight. We've been working with them, making meaningful contributions in the space. >> That's a DevOps ethos, right? That's basically a cloud, right? >> DevOps is a funny term. It's funny, I had a bunch of my guys at the DevOps conference here, you know who was there? It was all IT guys, not developers. It's really a progression of developers to DevOps into IT, and we really say that DevOps is where developers and IT come together. We really are trying to enable DevOps to satisfy the business guys. In fact, go back to my brave theme. You're seeing Shadow IT, and developer, and line-of-business go around IT, and IT is now being through announcements, like today, armed with the tools to go to developers and say, oh no, I'm your friend. >> Step out of the shadows. >> I'm going to enable you with the coolest, most efficient infrastructure, and I'm still going to have it secure and managed, as well. You don't need to be running in these environments that we can't scale, manage, and secure. Your apps, now, can operate in an enterprise-worthy way. >> That right once run anywhere concept is very powerful, is the premise, if I understand it correctly, that you'll bring that enterprise capability, the security, and other management capabilities to that concept? >> Yeah, the VM doesn't change. We're adding Docker on top of the VM, and enabling it with some cool, new technologies, like I mentioned, Project Fargo, that actually make that delivery of the container on the VM more efficient and lighter-weight, than a bare, metal, Linux implementation of Docker. That's really powerful, it's really cool that we can do that, and we have some cool technologies that we're showing off that enable that, and will be part of our next major vSphere release. >> So you touched that base, you touched the OpenStack, you got some action going on there, and sort of, embracing, OpenStack. More developers in OpenStack. VMware has a touch act to follow when you think about the whole where we've come from. It seems so simple now. Servers underutilized, you had a 10x disruptive factor. Now, you've got to do it again. I remember Moretz used to talk about this deeper business integration. He'd talk about it like this was grand vision, but you actually, now, have been executing on that. Is that where the next wave comes from? That deeper business integration? You talked about transforming infrastructure, so how do you do it again? Is it a cost reduction, is it a business integration, is it, as you say, transforming that infrastructure? What does that mean to the customer from an operational standpoint? >> If you're the IT guy, do you want to spend a lot of your time worrying about the infrastructure? Actually, what you want to do, is have this programmable, scalable, flexible infrastructure that enables you to go worry about the business problems, which are in the apps. Because you want the IT guy spending all of his time, and most people say, how can I do new application services? How can I enable new business models, et cetera. So he wants this flexible, programmable, secure, managed infrastructure, and he wants to worry less and less about it. E.g., it needs to become more automated, more efficient, more scalable. And we walk into that discussion, say, you know, we've earned the right, CIO, because we've demonstrated more value, more efficiency, more quality of software, and we now have 80 percent of the world's applications running on top of the software that we do enlist for you. We've earned the right to show that we can do that for the full data center. To be able to do that both on and off premise, in a reliable, scalable, managed, and secure fashion, so that we enable you, Mr. IT, to go deliver the environment for the developer. To deliver the environment on or off premise, to secure all those next generation devices and applications, as well. And that's what we're off to do for you, and we deserve a seat at your table to help you do that. >> The Federation helps you with that seat, although, you guys got a pretty big role in the Federation. >> Yeah, yeah, we do. >> I wanted to ask you about the financial analyst meeting, did you get a lot of questions about that? About the whole spin-out thing, and how was that addressed? >> Actually, surprisingly-- >> Didn't come up? >> Not a question. >> 'Cause it's already come up. >> We've talked about it before. Largely, EMC is addressing those things. We've been very proactive in our position. We think the Federation is the right model. It's working, it's delivering value, we're quite committed to it, and we're showing quite a number of cases where we're adding value, as a result of it this week. We announced EMC as one of our EVO:RAIL partners. We announced the ViPR-based object service for the vCloud Air service, that we announced this week. Announcing new solutions that we're doing with them, so lots of different areas that we're just demonstrating the value that comes from the Federation. >> Well, we know Joe a little bit, we know that's not going to happen anytime soon. So what kinds of things did come up? Were they nitty gritty things around enterprise license agreements, 2015 guidance, share with us what you guys-- >> Lots of questions around 2015. >> And you guys shared a little bit more, maybe, than in the last-- >> We gave them framework to go look at 2015, lots of questions about the strategies that we've laid out. How well this NSX thing play out? How rapidly is that going to grow? vSAN, how rapidly are you seeing that grow, as well? vCloud Air, how are you going to win in that business, and do it in a margined, effective way for VMware? And how does this vCloud Air network partnership work? Based on that, how should we look at your growth profile going forward, with your traditional business, as well as these new business areas, and what's that going to look like over 15 and beyond? So those are sort of the nature of the questions. >> The Air piece is interesting to John and me because we've been trying to parse through, on a long-term basis, you guys are software everything, you talked about that, at quite some length, and the business model's great. Marginal economics, go to zero. You see some of that happening with the public cloud. The traditional outsourcing is starting to fall, that software marginal economics line. My question relates specifically to how your, whatever it is, 4,000 partners, can you replicate that kind of marginal economics at volume, or is it more of a high touch belly-to-belly model? >> We definitely are viewing this as the potential for a very scalable model, working with service providers who invest substantial capital, who have data centers, who have networks, have unique, governed assets in their own countries that they participate in, as well. We're building the stack, being prescriptive in the hardware, building the software layer that we need to go with it, so that we can operationalize the seven by 24 service that scales, and do so with this hybrid model. Not be over here in the race to the bottom, with Amazon's and Google's, we're over here focused on enterprise customers to deliver value of how these things work across the boundary of on and off premise, the Hybrid Cloud, and enable which enterprise-class services on top of the platform. We're going to do so with what we do, we're going to leverage partnerships, like Savvis, CenturyLink, like the SoftBank partnership, and we're going to enable those 3,900 partners with additional service offerings, as well. It's a very effective business model. >> But you will build out your own data centers, or... >> No, we're not building our own concrete, air conditioning, and networks, we're doing Colo for the core vCloud Air offerings for those, but we're enabling our partners to do that, as well. Here are the recipes, you go build it, and operate it, as well. >> So that's a technology transfer, IP transfer? >> For that, we get a recurring revenue stream as they go run our software in their data centers and services. The combination of the two, we think, gives us a very effective business model for the future. >> Pat, last year, I asked you about the, you announced the Hybrid Cloud, all in. I made a comment, kind of off the cuff, that's a halfway house, got you agitated. Halfway house? (laughs) And you said no, it's the final destination. I took a lot of heat for that, I fall on my sword, I'll eat my own words there, but it turns out absolutely correct, right? That's absolutely the destination. That is the number one conversation, it's Hybrid Cloud, certainly on-prem, off-premise, new economics, value creation. I got to ask you, and the question from Twitter has come in, along the same lines, is ask Pat about moving up the Stack. And I also want to hear about the end-user piece, but inside the Hybrid Cloud destination, what is the VMware vision of moving up the Stack mean, and what does that mean to you? >> Anybody who lays out a strategy, to me, it's more important to answer what you're not doing, than what you are doing. For us, we're not doing hardware, making that clear, we're enabling hardware partners. We're not doing consumer, we're focused on the enterprise customer, and we're not doing apps. We are enabling more services, enterprise services, like DR-as-a-Service, Desktop-as-a-Service, but we're not going into the app space. That's the line that we're trying to draw. Everything that's an enterprise-class service, where people need enterprise capabilities, an identity, a DR, storage capabilities, things that really are common services for apps to utilize, that's what we're doing, but that's as far north, or far up the Stack that we'll go. >> I asked Steve Herod on our Crowd Chat pregame on Friday, what the hot opportunities are for startups, he said security, or mainly, not getting caught at this perimeter-base security. What's your view on that? >> The hard, crusty exterior, and the soft, gooey inside is how I described it this morning. My morning breakfast everyday, and with it, this whole idea of micro-segmentation, NSX, really redefines how you build networks, and that's going to allow us to re-factor every aspect of security, every aspect of routing, and load balancing, et cetera. We announced the five partnership. The Palo Alto Networks partnership is really enabling us to execute on the micro-segmentation use case. It's transformational about how services and networks are operated inside of data centers, and we have the poll position here with the NSX platform. >> One of the most common question we're getting from the crowd, is when are you going to get a Twitter handle? (groans) (laughs) >> I've never been a good social guy. (talking over each other) >> We'll show you the engagement container-- >> Thank you, you can help me out with that. That'll be good, thanks. I appreciate it. (laughs) >> On end-user computing, let's go to the part because Sanjay is onboard, the acquisition, give us the update, what's coming through that? >> What a team. Sanjay has been a great leader, we brought together a great leadership team, Sumit and John Marshall. Their passionate and aggressive in that space. The combination of the new assets, the AirWatch team, Revitalization of Horizon, DaaS as a service on the platform, we just announced Cloud Volumes. It's a very cool, dynamic app capability, so overall, really coming together. Momentum increasing in the marketplace, Sanjay's done a really fine job at driving us in that area. What a difference a year makes. >> Pat, I wish we had 34 minutes, which was your record on theCUBE-- >> We're just getting started, John. (laughter drowns out speaker) >> We appreciate your time, but I want to give you the final word, and we talked about this briefly earlier, everyone always wants to ask, is this a defensive move, what's the strategy? I've never seen you as a defensive player. In all the interviews we've done, knowing your history, you're an offensive player. You talked about, years ago, get out in front of that next wave, or you'll be driftwood. I don't see that defensive. What is the VMware offense? If you could describe the offense for VMware, as a company. And answer the question, offense, defense? Are you making defensive moves, or am I off-base by categorizing it offense? >> I think we're absolutely playing offense. If you think about it, we're transforming networking, we're transforming the entire data center operation, we're delivering the first, truly hybrid cloud, enabling secure, managed environments on those devices. Unquestionably, overall, we are playing offense. Now, some things I think we should've done sooner. We should've been in the public cloud space earlier, and we're having to catch up in that space. The moves that we've taken in OpenStack, I think they're pretty well-timed. The moves that we're taking in containers, I think we are way ahead of anybody else, in terms of delivering enterprise container environments, in that respect. >> M&A activity looking good right now? (laughs) >> I just announced one last week, I got more in the pipeline, we're never finished. Organic innovation, inorganic innovation, we're playing both, and we're absolutely playing offense 'cause here, we're playing to win because our customers want the very disruptive nature of the products that we deliver with the quality, the brand of VMware. That's what they want from us. >> And more open source is part of that playbook? >> Yeah, absolutely. >> Seeing that grow? >> Absolutely, we will use open source every place that we can to accelerate the offerings that we bring to our customers. We don't mind fundamentally changing our business model, but we can add open source components to it, and we will, and today's OpenStack announcement is a great demonstration of that. >> Pat, put the bumper sticker on this to end the segment. What's the bumper sticker say for this year's VMWorld? What's on the bumper right now? What's it say for VMWorld-- >> Enabling brave, new IT. >> Pat Gelsinger, CEO of VMware here, inside theCUBE. Always great to have him. Our fifth year, we love having him on. Great tech athlete. This is theCUBE, be right back after a short break. (dull dinging)

the cube at emc world 2014 is brought to you by emc redefine b.c.e innovating the world's first converged infrastructure solution for private cloud computing brocade say goodbye to the status quo and hello to rokade okay welcome back everyone here live in las vegas for emc world 20 at 2040 i was going to say vmworld because you're a new CEO of vm role here I'm John for a bounder still hanging with Dave vellante my co-host he would Pat Gelsinger cube alumni friend of the cube it's our fifth season we opened up at emc world 2010 in Boston Pat was on the cube then set a great time ever since pad welcome back to the cube just got off the plane from Istanbul how do you feel I feel a little bit yet like that's been a long long day okay we'll get a lot of information out of you did so first time I ask you about the D SSD acquisition I'll see you you known Andy for a while what does that all mean for the industry software at the center of the value proposition is is the hardware and compute going to be this abundant resource that no one ever sees what's your take on all this well i think you know first I think of Andy is like the Rembrandt of hardware design right you know he's just done all the amazing system design work in the industry for many years he's been a friend for many years and just great great respect for him individually obviously d SSD is doing some great work you know I think it's going to prove to be a critical technology in the entire converged infrastructure space and clearly this high-performance flash capacity there's going to be a game changer for what you're able to do in the rack and obviously with bills participation from sa p they see it as a very very critical capability for in-memory environments and some of the data analytics that they want to do so i think this is a a bold move by emc i was a fully supportive of it and i think it's going to yield very very powerful hardware for software to take advantage they bring you in on a deal like that and consult with you is it is it it's about hey Pat we need your advice I saw the board meetings I sit in the M&A meetings and I'm an Oni and so for decades okay yeah so it wasn't just a cursory glance a little bit more than it's been in the works for a while so we've been fine we'll get more information we'll be digging for home sources I'll talk about cloud I've seen last time we're at vmworld we talked about the cloud I said hey is hybrid cloud really going to be the destination you like what are you talking about it's going to be the destination it is the hybrid cloud is the way here at ian's emc world you hear joe tucci up there even using the words AWS disruption amazon is clearly on the radar public cloud is still it is out there as a viable alternative and the words like reinvent which is the conference name for amazon redefine is this conference it's ok to have amazon out there but hybrids cloud is still the deal with containers and what not I mean has a hybrid cloud narrative change for you amplified straight narrow foot pedal to the metal ya know we are absolutely convinced hybrid is the answer and maybe start with a few facts I mean it's always good to ground ourselves in a little bit of data and today on premise is ninety two percent of IT spent so eight percent is in the cloud whereas sales pass so you sort of say wow great and predictions would say by 2020 it's seventy-five percent on-premise the twenty-five percent in the public cloud so you look at that and say boy you know even just from the spin perspective it's going to be hybrid and then you look at facts like security privacy governance s la's liability cost performance all of those things will keep people on premise so it's clearly a hybrid world right where it is the on and off premise and we've clearly seen that as we've laid out this positioning of hybrid the industry is following us we're seeing amazon talk about we're seeing Microsoft talk about or seeing google talk about it all the other big cloud players are saying yo yo VMware got it right hybrid is the answer it seems they all the territory is being claimed now it's like we almost seen in almost not bubble bursts are you seeing box pull there s one obviously their economic of buying customers isn't working so I see that the pullback for they're you're seeing some other companies get massive valuations that aren't publicly traded yeah there's really kind of know really market there and then other companies in the flash marker fusion-io by the memory kind of sub that wasted well below but the container technology so I got to ask you about some of the new stuff that you seeing one valuations and also the new containers we heard da cars pretty hot right now what do you make sense of the containers in particular well on the first of the valuations I mean clearly the Pease of these very high growth you know early stage not money-making companies were just out of control and I have comment on that before at the Wall Street Journal CIO event that they were just way out of range and it's good to see those coming into more reasonable ranges now and I think that will wash through the entire industry because there was this mini bubble of you know just crazy Pease you know and you know with respect to docker and some of the other container technologies that clearly is you know enthusiasm around some of the lightweight stateless mechanisms but what I'll point out is that there have been different container approaches over the last 30 years and the only one that has had sustained architectural influence and investment has been the vm and our effort is continuing to pound the overhead continue to add value security networking management you know all the things that we've been able to build around that's idea of the vm container and of course if people are really you know see lightweight containers is valuable but we'll stick a bunch of them in a vm i mean it's just another management model for a lightweight deployment of stateless apps so John I've been thinking about you know Joe's waves right and we think okay with this next wave that we're in what's different about this way you've laid out a 50 billion dollar tam you just talked about how much of that the public clouds going to get I wonder if we could make an observation to get your feedback on it the economics of cloud they start to look so you've got software economics ninety percent gross margins hardware you know the economics at volume the marginal economics are talking about you know aren't as attractive but they're still good and then services is negative you know but diseconomies of scale if you will it seems like in the cloud that online cloud services are now taking shape the same way software is so at volume you're getting software like economics so the question is how does VMware and VMware you know cloud vcloud hybrid service get to that scale and that volume so that you can participate in that so first of all is it is it a reasonable premise to note and can you get to that scale and how do you get to that scale yeah and you know you'll see a little bit of my keynote tomorrow I'll talk about this a little bit more one is you know we're investing we're growing very rapidly as we expand the number of presences in the u.s. you know second we're very aggressively partnering and we announced their first partnership with savvis you'll see us announce other partnerships like that that we're going to leverage their capital as well right and who invests the most in capital of any industry in the room service providers all right they blow away everybody else so partnering with them the other view of that would be with vGHS is is that we also have our bspp program where you know i'll give some of the stats in the keynote tomorrow but we have an overwhelming right Brett for those vs PP partners that already has us very much at scale as one of the largest clouds not just what we do but through this broad range of partnerships that we form so overall you know we have a very powerful strategy when you add up all of those and given our business model of software and services you know it's very unique and combine that with these statistics I was giving you up on and off-premise and the private cloud you have 40 million VMs 500,000 customers you know we bring a lot to the table once all about a AirWatch so big acquisition the Federation helped a little bit o financing that's absurd yet right so talk about the importance of air watch you know where it fits into the end-user computing strategy and and what gives you excitement about air watch well you know I think one is in the whole end-user computing space you know two years ago people viewed it like VMware had a hobby you know hey we're selling these fear and a you know growing some of this yeah yeah well and you know hiring Sanjay rebuilding the leadership team investing in our end user computing sales force and now the air watch acquisition everybody realizes this ain't a hobby anymore we are taking the space very very seriously and really redefining the industry quite rapidly with the breadth of what we've done with horizon six plus the inorganic move with air watch you know we are here to win in this space and taking share substantially from Citrix and others in the category yo secondly and as part of the whole secular shift not just the cloud but it's the mobile cloud era so it's to redefine and deliver that PC experience but it's also uniquely right to enable the secure managed experience for all the mobile devices as well that's where AirWatch is clearly you know tearing up the track and you know we believe it's separating from the rest of the industry of players as that leader and really gives us the unrivaled portfolio of assets now I talked about the obviously the compute trend is moving to the data center you're seeing the commoditization now the data centers want to do the same way you talk about that publicly so with the software at the software-defined enterprises joe tucci calls we've called the sava define data center how does that change from your standpoint from a focus standpoint because you mentioned you got AirWatch is no longer a hobby you're building a you know business got a tam expansion strategy aggressively investing you have an ecosystem that you've kind of had from your hobby days now you're kind of nurturing it and expanding it what is the focus and from a software-defined perspective what is that focus specifically and how do you keep your troops marching to the cadence of that focus yeah we laid out our three areas for VMware over a year ago we said we're going to do three things software-defined data center virtualized the whole data center second do the hybrid cloud this on and off-premise and then go from the data center to the device pcs and mobile devices you know with what we've done we have all the pieces in place now the acquisitions are all in place the execution and that consistency that we've laid out now for almost a year and a half you know has really resonated both internally to my teams you know to our sales teams through our customers and our partners as well and they get it and you know that consistency has really gotten us more and more momentum we're seeing all of those limits you know really firing on all cylinders at this point so I saw the news that Gould is no longer involved kind of he was kind of cuz he's now the CEO of e mc2 you're the free captain of VMware and the Federation of the ship what is that like for you now and what are you tapping into the Federation what is pure VMware can you kind of square that off in terms of Aussie VMware what are you tap to the Federation what do you have available to you sure sure and you know with the Federation perspective you know we got a lot of benefit from I will say you know the layer that emc provides you know I call up Joe we have a shareholders meeting right yoyo cage oh yeah I'm okay good done shareholders really finish I mean yo some of those things are just elegant definitely right you know we can get things done by John date and at the same time yeah we're accountable to the street for all the financial metrics all the things that you want to be accountable to public shareholders for you know we also get the benefit like you saw an air watch your the cash position we're better aligning ourselves and global accounts were both of us our prep presence so we get the leverage of both sales teams the capacity that we have you're seeing some of the solutions work that we're doing be pivotal assets recently right you know moving things around to you know best position things for the different players as customers or seeing that you know to line those assets between it between us and also very very clearly saying okay you know here are the areas and i'll hit on this in my keynote tomorrow right this is how the vmware assets work with the emc assets and we're going to leverage each other as we go forward but as we say you know the Federation motto is strategically aligned right you know while remain you know loosely coupled so continuing to be able to go partner right with others in the industry to facilitate that flexible ecosystem I want to ask you about Silicon Valley right so obviously you have a great campus VMware means one of the most beautiful campuses in Silicon Valley well done it's fits into the hillside there my favorite areas but as you guys go global Silicon Valley's also going global and there's also kind of like a let's say bubble ish environment out there right now evaluation we just talked about control Silicon Valley's changing what's your take of the currents data Silicon Valley in terms of the innovation I know you're going to be talking with Stanford University and Mark injuries and coming up on a panel has it changed over the past few years and it does it still have that innovation and visit is it bringing it back Alan's of cycles change which you're taken so that well we're going to have a nice campus opening you know beautiful VMware a campus we're gonna have a little party yes I don't know this is the cube invited okay thanks i hope so yes so we're going to be the ribbon cutting ceremony ins and that's going to be great and mark is going to be there john hennessy my thesis advisor now the president of Stanford is going to be there Joe the board so we're gonna have a great event talking about that exact question right and really talking about the future of the valley unquestionably today it remains the hottest bed of innovation anywhere in the world but I think you always look at that and say you know where the recipe is still there as you look to the future and you know competition for labor is intense you know tax rates you know people move out of the valley because of justification and San Francisco big discussion yeah right you know toyota just moved to texas I mean there's always this you know you know do you still have that recipe right nowhere else has even close to the valley and that today race you that in your travels oh absolutely absolutely but every place in the world says I want to be like the valley right every place in the world is saying what do I need to do to create that same recipe you know whether that's bangalore or whether that's beijing or shenzhen right or whether that's a israel or you know many spots in the world well Silicon Valley export that knowledge and is that is that a good thing you know I don't think silicon but you know knowledge ideas right you know this is bubbling cauldron but there's something special about the valley that it's been able to maintain now for you know three decades and it doesn't look like it's coming to an end hey Chuck house is pretty excited about v san are you as excited oh very excited about these why what why you so excited what does it all mean well you know if you're a V admin right which you know is the heart of our customer base you say check find me local disk check provision local disk well I've just done storage right it's powerful it is you know amazingly simple and gives great performance and it redefines the hot edge right for you know via for virtual storage a new tier of storage so we're very excited about it certainly doesn't replace all of storage but it gives a new cheer a new capacity that for a virtual admin is just perfect is that new tier incremental I mean must replace some storage of sexually it's right you know I mean the good news is storage continues to grow right you know it's one of the right the areas of IT that just continues to grow as capacity grows an application demands take and I'm of course there's going to be some trade-offs to the some places and we do see lower capacity lower end of the market test dead some vb i use cases dr use cases where hey people might trade it off versus other all tournaments good news for you MC obviously they're mostly up market right is where their strength is but so we're very excited about be San and really see it as a critical new component of the vmware family and we stream i/o acquisition you made seems to be working out okay you happy about that yeah yeah nothing's been tons of time on extreme I oh these days but you made that that was all a lot of the acquisitions they did at the MC we're doing just fine hey you know and I cheer my team on back there when I meet it was like huh why did that would slip so that's not what the JC we were talking earlier the dream team is now kind of spread thin running their own little ships if you will in the Federation but back when 2010 we started doing the cube it was all kind of under one roof and we kind of said hey you got to get the meat on the bone we talked about in the queue hey the product portfolio is in transition you talk about some of the acquisitions looking back what are you most proud of for the team not just yourself but the group what you guys made some of those calls that might have been on the fence what was some of the highlights you look back and then where you are today well you think about some of the key decisions that we made and you know we did green pump that's now in the center of a pivotal now we did I salon that's performed extremely well we have done the data domain and clearly the whole back up space is performed very well we've also laid some of the seeds for the future right like extreme i/o like Viper were done when I was there so all these things you don't it's done well EMC gained significant share since I joined and they have the tools to really be positioned to help go through this next phase of the transition and obviously under David and his team's a leadership you know the industry remains in transition and that's still affecting EMC and they're having to you know carefully navigate that next phase and I think you've heard a lot from him today we love pulling the sound bites out I have a quote here 430 two days ago from you but I want to don't talk about that now but the quote we had on the cube you said is that if you don't get out from that next wave you'll be driftwood Joe Tucci said today if you don't take an offensive approach with this platform you're going to wither away so let's talk about that getting out in front that next wave in your mind share it the folks out there in your world words why at this point in time so important from an industry perspective you seen in movies before you've seen the massive inflection points you've seen Moore's Law at full tilt you know try to compare where we are today from irrelevance and making sense of the excitement and controversy opportunity yeah well we are as we would say as we're going that you know from client server to mobile cloud right this will be tectonic shifts and write the amount that's going to shift to cloud the amount that's going to shift away from PCs to mobile devices in the industry and all the vendors that have their value propositions tied to a hardware defined approach guess what yeah that's going to be a secular decline where people are going to be competing for a premise based the revenue that way into the mime ironmen that's going to be flat to down right and there's going to be no possibility of growth and you look at what's happened right you know consecutive quarters at IBM for instance boy you know they're feeling the pain right of this transition and the cloud transition it's barely underway right mobile is just scratching the surface yeah you know so these trends are just about to get started you know the analogy I'll give them my keynote tomorrow is 1989 and we're Digital Equipment Corporation and over the next seven years guess what right the entire business is going to shift that guessing always great to have you on the cube just any final parting words about what you're going to work on this week some things you're highlighting customer events us you keynote what do you expect to see here at emc world this week well you know I always see OEMC role is a great place and you know just feel incredibly embraced and our partners at emc and just happy that they give me the opportunity to address the audience here that's always a great joy and it is this period of extraordinary transition and everybody here right as the conference's has to redefine themselves on the other side of these tectonic shifts that are underway and EMC is you know doing that and there you know to all of their partners and customers saying here's what you need to do to go with us event in August right around the corner fat thank you inside of you when he finds one of my closest friends off we love talking with you and we'll see you at your event we're going to be actually attending the ribbon-cutting ceremony I was talking to the folks but getting the cube they're going back and forth but we'll get it done Pat Gessling you inside the cube the CEO VMware friend of the cube would love having you on be right back after this short break Pat glad to see you're like I could see it you

(upbeat music) >> Hey welcome back to VMWorld 2013. This is theCUBE, flagship program. We go out to the events to extract the signal from the noise. I'm John Furrier, the founder of SiliconANGLE. I'm joined with David Vilante, my co-host from Wikibon.org and we're kicking off today with an awesome interview. CEO of VMWare, Pat Gelsinger, CUBE Alumni. Been on the theCUBE with Dave and I multiple times. So many times. You are in like the leaderboards. So in terms of overall guest frequency, you've been up there, but also you're also the top dog at VMWare and great to see you again. How are you feeling? >> Thank you, thank you. Good morning, guys. >> Pleasure. >> Good to see you. >> So what's new? I mean obviously you're running the show here. You're running around. Last night you were at the NetApp event. You ran through CIO, R&D. You got to go out and touch all the bases out here. >> Yeah, yeah. >> What does that look like? What have you done and obviously, you did, the key note was awesome. What else is going on? >> You know, everything, you know, VMWorld is just, it's just overwhelming, right? I mean 23,000 people almost. I mean you know the amount of activities around that and it really has become the infrastructure event for the industry and you know, if you're anything related to infrastructure, right, what's going on, right in the enterprise side of IT, you got to be here, right? And there's parties everywhere. Every vendor has their events. Every you know, different particular technology area, a bunch of the things that we're doing, and of course to me, it's just delightful that I can go touch as many people and you know, they get excited to see the CEO. I have no idea why, but hey I get to show up. It's good. >> You've been in the industry for a long time. Obviously you've seen all the movies before and we've talked about the seas of change in the EMC world when you were there, but we had two guests on yesterday that were notable. Steve Herrod who's now a venture capitalist at Generalcatalyst and Jerry Chen who's a VC at Graylock, and we have a 10-year run here at VMWare which is esteemed by convention, but the first five years were a lot different than the last five years, and certainly, the last year you were at the helm. So what's changed in the past 24 months? A lot of stuff has certainly evolved, right? So the Nicira acquisition certainly changed up, changed everything, right? You saw software-defined data center now come into focus this year, but really, just about less than 24 months, a massive kind of change. What, how do you view all that? How do you talk to your employees and the customers about that change? >> Well you know, as we think about the software-defined data center vision, right, it is a broad comprehensive powerful vision for rearchitecting how the data center is operated, how customers take advantage of it. You know and the results and the agility and efficiency that comes from that. And obviously the Nicira acquisition is sort of the shot heard 'round the world as the really, "Okay, these guys are really serious "about making that happen." And it changes every aspect of the data center in that regard. You know and this year's VMWorld is really, I'll say, putting the beef on the bones, right? We talked about the vision, we talked about each of the four legs of it: compute, networking, storage and management of automation. So this year it's really putting the beef on the bones and the NSX announcement, putting substance behind it. The vSAN announcement, putting substance behind it. The continuing progress of management and automation. And I think everything that we've seen here in the customer conversations, the ecosystem of partner conversations are SDDC is real. Now get started. >> Can you, I think you've had some fundamental assumptions in that scenario, particularly around x86 in the service business. Essentially if I understand it, you've said that x86 will dominate that space. You're expecting status quo in the sense that it will continue to go in the cadence of you know, cores and Moore's Law curve even though we know that's changing. But that essentially will stay as is and it's the other parts, the networking and the storage piece that you're really, where you define conventions. Is that right? >> Yeah certainly we expect a continuing momentum by the x86 by Intel in that space, but as you go think about software-defined everything in the data center really is taking the power of that same core engine and applying it to these other areas because when we say software-defined networking, right, you need a very high packet flow capability and that's running a software on x86. We need to talk about data services running in software, right? You need high performance. It's snapshots, file systems, etc. running on software, no longer bound to you know physical array. So it really is taking that same power, that same formula right, and applying it to the rest of the elements of the data center and yeah, we're betting big right, that that engine will continue and that we'll be successful in being able to deliver that value in this software layer running on that core powerful Silicon engine. >> So Pat, so obviously when you came on board, the first thing you did was say, "Hey, the pricing. "I want to change some things." Hyper-Visor's always been kind of this debate. Everyone always debates about what to do with Hyper-Visor. But still, virtualization's still the enabling technology so you know, you kind of had this point where the ball's moving down the field and all of a sudden, in 2012, it changed significantly, and that was a lot in part with your vision with infrastructure. As infrastructure gets commoditized, what is going to change in the IT infrastructure and for service providers, and the value chains that's going to be disrupted? Obviously economics are changing. What specifically is virtualization going to do next with software defined that's going to be enabling that technology? >> Yeah, you know and I, you know, we're not out to commoditize. We're out to enable innovation. We're out to enable agility, right, and then the course of that, it changes what you expect and what the underlying hardware does. But you know, it's enabling that ecosystem of innovation is what we're about and customers to get value from that and as you go look at these new areas, "Hey, you know, we're changing how you do networking." Right, all of a sudden, we're going to create a virtual network overlay that has all of these services associated with it that are proficient just like VMs in seconds. We're creating a new layer of how storage is going to be enabled. You know, this policy-driven capability. Taking those capabilities that before were tightly bound to hardware, delivering it through the software layer, enabling this new magnificent level of automation and yesterday's demo with Carl. I mean Carl does a great CTO impersonation, doesn't he? And he's getting some celebrity action. He's like, "I got the bottle." >> Oh yeah. >> Steve Herrod gave him a thumbs up too. >> Yes, yeah Steve gave him a good job. But you know, so all of those pieces coming together, right, is you know, really, and you know, just the customer and the ecosystem response here at the show has been, "Oh, you know, right, "SDDC, it's not some crazy thing out there in the future. "This is something I can start realizing value for now." >> Well it's coming into focus. It's not 100% clear for a lot of the customers because they're still getting into the cloud and the hybrid cloud, I call it the halfway house to kind of a fully evolved IT environment, but you know. How do you define? >> No it is the endgame. Hyper cloud is not a halfway house. What are you talking about? What are you talking about? >> To to full all-utility computing. That is ultimately what we're saying. >> Halfway house? >> I don't mean it that way. (group laughs) >> Help me. >> Okay next question. >> (chuckles) When you're in a hole, stop digging, buddy. >> So how do you define the total adjusted mark at 50 billion that Carl talked about? >> Yeah you know, as we looked at that, we said across the three things, right that we said, software-defined data center, 28 billion dollars; hyper cloud, 14 billion; eight billion for the end-user computing; that's just 50 billion opportunity. But even there, I think that dramatically understates the market opportunity. IT overall is $1.7 trillion, right? The communications, the services, outsourcing, etc. And actually the piece that we're talking about is really the underpinnings for a much larger set of impact in the part of what applications are going to be developed, how services are delivered, how consumers and businesses are able to take advantage of IT. So yes, that's the $50 billion. We'll give you the math, we'll show you all the details of Gartner's and IDC's to support it. But to us, the vision and the impact that we're out for is far more dramatic than that would even imply. >> Well that's good news because we said to Carl, "It's good that your market cap is bigger than--" (Pat laughs) >> Oh yeah your TAM is bigger than your market cap. Well okay now we-- >> Yeah, that's nice, yeah. Yeah, we're out to fix the market cap. >> Yeah he said, "Now we got to get the 50 billion. So I'm glad to hear there's upside to the TAM. But I wanted to ask you about the ecosystem conversation. When you talk about getting things like you know, software defined network and software defined source, what's the discourse like in ecosystem? For guys like, let's take the storage side. EMC, NetApp last night, they say, "Hey you know, software defined storage. "We really like that, but we want to be in that business." so what, talk about that discussion. >> Yeah, clearly every piece of software defined, whether it's software defined storage, software defined data services, software defined security services or networking, every piece of that has ecosystem implications along the way. But if you go talk to a NetApp or a EMC, they'd say, "You're an appliance vendor." And they would quickly respond and say, "No, our value's in software, "and we happen to deliver it as an appliance." And we'd say, "Great, let's start delivering "the software value as a software appliance "through virtualization and through the software delivery "mechanisms that we're talking about for this new platform." Now each one of them has to adjust their product strategies, their, you know, business strategies to enable those software components, right, independent of their hardware elements for full execution and embodiment into the software-defined data center feature. But for the most part, every one of them is saying, "Yes, now how do we figure out how to get there, "and how do we decompose our value, embody it it in new ways "and how can we enable that in "this new software-defined data center vision?" >> And they've always done that with software companies. I mean certainly Microsoft and Oracle have always grabbed a piece of the storage stack and put it into their own, but it's been very narrow, within their own spaces, and of course, VMWare is running any application anywhere. So it's more of a general purpose platform. >> Absolutely. >> Is it a tricker fit for the ecosystem to figure out where that white space is? >> Absolutely. Every one of them has to figure out their strategy. If you're F5, you know, I was with John McAdam this morning. "Okay, how do I take my value?" And you would very quickly say, "Hey, our value's in software. "We deliver it as mostly as appliances, "but how do we shift, you know, your checkpoint?" Okay, you know, they're already, right, you know, our largest software value or Riverbed, you know, the various software vendors and security as well. Each one of them are having to rethink their strategies and the context of software define. Our customers are saying, "Wow, this is powerful. "The agility and the benefits that I get from it, "they're driving them to go there." >> So what's the key to giving them confidence? Is it transparency? You're sharing roadmaps during integration? >> Yes, yes, yes. >> Anything else? Am I missing anything there? >> You know, also how we work with them and go to market as well. You know, they're expecting from us that, okay, "you know, if this is one of our accounts, "come in and work with us on those accounts as well." So we do have to be transparent. We have to the APIs and enable them to do integration. We have to work with them in terms of enabling their innovation and the context of this platform that we're building. But as we work along the way, we're getting good responses to that. >> Pat, how do you look at the application market? Now with end-user computing, you guys are picking that up. You got Sanjay Poonen coming in and obviously mobile and cloud, we talked about this before on theCUBE, but core IT has always been enabling kind of the infrastructure and then you get what you get from what you have in IT. Now the shift is, application is coming from outside IT. Business units and outside from partners, whether they're resellers. How do you view that tsunami of apps coming in that need infrastructure on demand or horizontally scalable at will? >> Yeah so first point is, yes, right, we do see that, you know, as infrastructure becomes more agile and more self provisioned, right, more aligned to the requirements of applications, we do see that it becomes a tsunami of new applications. We're also working very hard to enable IT to be the friend of the line of business. No longer seen as a barrier, but really seen as a friend, partner enabler of what they're trying to do because many of the, you know, line of businesses have been finding way. You know, how do I get around the slow-moving IT? Well we want to make IT fast-moving and enabling to meet their security, governance, SLA requirements while they're also enabling these powerful new applications to emerge and that to us is what infrastructure is all about for the future is enabling, you know, businesses to move at the speed of business and not have infrastructure being a limiter and as we're doing things, you know, like the big data announcements that we did, enabling infrastructure that's more agility, you see us do more things in the AppDev area over time, and enabling the management tools to integrate more effectively to those environments. Self-service portals that are enabling that and obviously with guys like Sanjay in our mobile initiative, yeah that's a big step up. Don't you like Sanjay? He's a great addition to the team. >> Yeah Sanjay's awesome. He's been great and he has done a lot on the mobile side. Obviously that is something that the end users want. >> That's an interesting way that I put him into that business group first. (group chuckles) >> Well on the Flash side, so under the hood, right? So we look under the hood. You got big data on the dashboard. Everyone's driving this car to the new future of IT. Under the hood, you got Flash. That's changing storage a bit and certainly reconfiguring what a DaaS is and NaaS and SaaS and obviously you talked about vSAN in your key note. What is happening, in your vision, with compute? I mean obviously as you have more and more apps hitting IT, coming in outside core IT but having to be managed by core IT, does that change the computing paradigm? Does it make it more distributed, more software? I mean how do you look at that 'cause that's changing the configuration of say the compute architecture. >> Sure and I mean a couple of things, if you think about the show here that we've done, two of them in particular in this space, one is vSAN, right? A vSAN is creating converged infrastructure that includes storage. Why do you do that? Well now you have storage, you know, apps are about data, right? Apps need data to operate on so now we've created an integrated storage tier that essentially presents an integrated application environment in converged infrastructure. That changes the game. We talked about the Hadoop extension. It changes how you think about these big data applications. Also the Cloud Foundry announcement. Right on/off premise of PaaS layer to uniquely enable applications and as they've done that on the PaaS layer, boy, you don't have to think about the infrastructure requirements to deploy that on or off premise or increasingly as I forecast for the future, hybrid applications, born in the hybrid, not born in the cloud, but born in the hybrid cloud applications that truly put the stuff that belongs on premise on premise, puts the stuff that belongs on the cloud in the cloud, right and enables them to fundamentally work together in a secure operational manner. >> So the apps are dictating through the infrastructure basically on demand resources, and essentially combine all that. >> Absolutely. Right. The infrastructure says, "Here's the services "that I have already, right, in catalogs "that you can immediately take advantage of, "and if this, you fit inside "of these catalogs, you're done." It's self-provisions from that point on and we've automated the operations and everything to go against that. >> So that concept of "born in the hybrid" is a good one. So obviously that's your sweet spot. You're going from a position. >> Yeah and this stupid halfway house hybrid comment. I mean I've never heard something so idiotic before. >> One person, yeah. (group chuckles) >> I don't know, it was probably an Andreessen comment or something, I don't know. (group chuckles) >> He's done good for himself, Marc Andreessen. >> Google and Amazon are obviously going to have a harder time with that, you know, born in the hybrid. What about Microsoft? They got a good shot at born in the hybrid, don't they? >> Yeah, you know and I think I've said the four companies that I think have a real shot to be you know, very large significant players for public cloud infrastructure services. You know, clearly Amazon, you know Google, they have a large, substantive very creative company. Yeah Microsoft, they have a large position. Azure, what they've done with Hyper-V and ourselves, and I think that those, you know the two that sort of have the natural assets to participate in the hybrid space are us and Microsoft at that level, and obviously you know we think we have lots of advantages versus Microsoft. We think we're miles ahead of them and SDDC, right, we think the seamlessness and the compatibility that we're building with one software stack, not two. It's not Azure and Hyper-V. It is SDDC in the cloud and on premise that that gives us significant advantages and then we're going to build these value rate of services on top of it, you know, as we announced with Desktop as a Service, Cloud Foundry as a Service, DR as a service. We're going to quickly build that stack of capabilities. That just gives substantial value to enterprise customers. >> So I got to ask you, talk about hybrid since you brought it up again. So software defined data center software. So what happens to the data center, the actual physical data center? You mentioned about the museum. I mean what is it going to look like? I mean right now there's still power and cooling. You're going to have utility competing with cloud resources on demand. People are still going to run data centers. >> You're talking about the facility? >> Yeah, the actual facility. I'm still going to have servers. This will be an on premise. Do you see that, how do you see that phasing out to hybrid? What does that look like physically for someone to manage? Just to get power, facility management, all that stuff. >> Yeah and in many ways, I think here, the you know, the cloud guys, Googles and Amazons and Yahoos and Facebooks have actually led the way in doing some pretty creative work. These things become you know, highly standardized, highly modularized, highly scalable, you know, very few number of admins per server ratio. As we go forward, these become very automated factories, right, of cloud execution. Some of those will be on premise. Some of those will be off premise. But for the most part, they'll look the same, right, in how they operate and our vision for software defined data center is that software layer is taking away the complexity, right, of what operates underneath it. You know, they'll be standardized, they'll be modularized. You plug in power, you plug in cooling, you plug in network, right, and these things will operate. >> Basically efficient down to the bone. >> Yeah. >> Fully operated software. >> Yeah and you know, people will decide what they put in their private cloud, you know, based on business requirements. SLAs, you know, privacy requirements, data governance requirements, right? I mean in Europe, got to be on premise in these locations and then they'll say, "Put stuff in the public cloud "that allows me to burst effectively. "Maybe a DR because I don't do that real well. Or these applications that belongs in the cloud, right because it's distributive in nature, but keep the data on premise. You know, and really treat it as a menu of options to optimize the business requirements between capex to opex, regulatory requirements, scale requirements, expertise, mission critical and all of those things then are delivered by a sustainable position. Not some stupid hybrid halfway house. A sustainable position that optimizes against the business requirements that they have. >> Let me take one of those points, SLA. Everybody likes to attack Amazon and its SLAs, but in many regards. >> Yeah, I'm glad I got your attention. >> Yeah, that's good, we're going to come back to that John. (group chuckles) >> In my head right now. >> I don't think we're done with that talk track. (laughs) So it's easy to attack Amazon and SLAs, but in essence, the SLA is, to the degree of risk that you're willing to take and put on paper at scale. So how transparent will you be with your SLAs with the hybrid cloud and you know, will they exceed what Amazon and Google have been willing and HP for that matter have been willing to promise at scale? >> Oh yeah, absolutely. I mean we're going to be transparent. The SLAs will have real teeth associated with them, you know, real business consequences for lack of execution against them. You know, they will be highly transparent. You know, we're going to have true, we're going to measure these things and you know, provide uptime commitments, etc. against them. That's what an enterprise service is expected, right? At the end of the day, that's what enterprises demand, right? When you pick up the phone and need support, you get it, right. And in our, the VMWare support is legendary. I'm just delighted by the support services that we offer and the customer response to those is, "Hey you fixed my problem even when "it wasn't your problem and make it work." And that's what enterprise customers want because that's what they have to turn around and commit back to their businesses against all of the other things as well. You know, regulatory requirements, audit requirements, all of those types of things. That's what being an enterprise provider is all about. >> John wants to get that. Talk about public cloud. (Pat laughs) >> I want to talk about OpenStack because you guys are big behind OpenStack. You talk about it as a market expansion. Internally what are some of the development conversations and sales conversations with customers around OpenStack instead of status, what's it doing, how you guys are looking at that and getting involved? >> Yeah, you know, we've clearly said you know, that you have to think about OpenStack in the proper way. OpenStack is a framework for building clouds, and you know, for people who are wanting to build their own cloud as opposed to get the free package cloud, right, you know, this is our strategy to enable those APIs, to give our components to those customers to help them go build it, right and those customers, largely are service providers, internet providers who have unique scale, integration and other requirements and we're finding that it's a good market expansion opportunity for us to put our components in those areas, contribute to the open source projects where we truly have IP and can differentiate for it like at the Hyper-Visor level, like at the right networking layer and it's actually going pretty well. You know, in our Q2 earnings call, you might recall, you know, I talked about that our business with the public OpenStack customers was growing faster than the rest of our business. That's pretty significant, right, to say, "Wow, if it's growing faster, "that says the strategy is working." Right, and we are seeing a good response there and clearly we want to communicate. We're going to continue that strategy going forward. >> And the installed base of virtualization is obviously impressive and the question I want to ask you is how do you see the evolution of the IT worker? I mean they have the old model, DBA, system admins, and then now you have data science on the big data side so with software defined data center, the virtualization team seems to be the center point for that. What roles do you see changing with hybrid cloud and software defined data center and user computing? >> Well I think sort of the theme of our conference is defy convention. Right and why do we do that? Because we really see that the, you know, the virtual admin and the virtual infrastructure that they have really become the center of IT. Now we need the competence of networking, the security guys, the database guys, but that now has to happen in the context, right, of a virtualized environment. DBA doesn't get to control his unique infrastructure. The Hadoop guy doesn't get his own unique infrastructure. They're all just workloads that run on this virtualized infrastructure that is increasingly adept and adaptable, right, to these different workload areas and that's what we see going forward as we reach into these new areas and the virtual admin, he has to go make best buddies with the networking guy and say, "Let me talk to you about virtual networking "and how we're going to cross between the virtual overlay "domain and the physical domain and how these things "are going to stitch together for making your job better "right, and delivering a better solution "for our line of business and for our customers." >> One thing you did to defy convention is get on stage with Marc Andreessen. So I want to talk about that a little bit. You guys had I would call it, you know, slight disagreements and, into the future. >> Just a little. >> But I thought you were kind to him. And he said, you know, "No startup that I work with "is going to buy any servers." And I thought you were going to add, no never mind. I won't even go there. (group laughs) I won't even go there, I want to be friends. No so talk about that a little bit, that discussion that you had. Your view of the world and Marc's. How do you respond to that statement? Do they grow up into VMWare customers? Is that the obvious answer? >> I mean I have a lot of regard. You know, Marc and I have known each other for probably close to two decades now and you know, we partnered and sparred together for a long time and he's a smart, successful guy and I appreciate his opinions. You know, but he takes a very narrow view, right, of a venture seed fund, right, who is optimizing cashflow, and why would they spend capital on cashflow when they can go get it as a service? That's exactly the right thing for a very early stage startup company to do in most cases, right? Marc driving his customers to do that makes a lot of sense, but at the end of the day, right, if you want to reach into enterprise customers, you got to deliver enterprise services, right? You got to be able to scale these things. You got to be cost-effective at these things and then all the other aspects of governance, SLAs, etc. that we already talked about. So in that view, I think Marc's view is very perspective. >> Also Zynga and those guys, when they grew up on Amazon, they went right to bare metals as soon as they started scale. >> They had to bring it back in right 'cause they needed the SLAs, they needed the cost structures. They wanted to have the controls of some of those applications. >> And rental is more expensive at the end of the day. >> There you go. Somebody's got to pay the margins, right, you know, on top of that, to the providers so you know, I appreciate the perspective, but to me it is very narrow and periconchal to that point of view and I think the industry is much broader and things like policy and regulation are going to take decades, right? Not years, you know, multiple decades for these things to change and roll out to enable us a mostly public cloud world ever, right, and that's why I say I think the hybrid is not a waystation, right? It is the right balance point that gives customers flexibility to meet their business demands across the range of things and Marc and I obviously, we're quite in disagreement over that particular point. >> And John once again, Nick Carr missed the mark. We made a lot of money. >> I think Marc Andreessen wants to put a lot of money into that book. Everyone could be the next Facebook where you you know, you build your own and I think that's not a reality in enterprise. They kind of want to be like Facebook-like applications, but I wanted to ask you about automation. So we talked to a lot of customers here in theCUBE and we all asked them a question. Automation orchestration's at the top of the stack. They all want it, but they all say they have different processes and you really can't have a general purpose software approach. So Dave and I were commenting last night when we got back after the NetApp event was you know, you and Paul Murray were talking in 2010 around this hardened top when you introduced that stack and with infrastructure as a service, is there a hardened top where functionality is more important than which hardware you buy so you can enable some of those service catalogs, some of those agility features in automation because every customer will have a different process to be automated. >> Yeah. >> And how do you do that without human intervention? So where is that hardened top now? I mean is it platform as a service or is it still at the infrastructure as a service model? >> Yeah, I think clearly the line between infrastructure as a service and platform as a service will blur, right, and you know, it's not really clear where you can quite draw that line. Also as we make infrastructure more application aware, right, and have more application development services associated with it, that line will blur even more. So I think it's going to be hard to call, you know, "Here's that simple line associated with it." We'd also argue that in this world that customers, they have heterogeneous tools that they need to work with. Some will have bought in a big way into some of the legacy tools and as much as we're going to try help them move past some of those brittle environments, well that takes a long time as well. I'd also say that you know, it's the age of APIS, not UIs, and for us it's very much to expose our value through programmatic interfaces so customers truly can have the flexibility to integrate those and give them more choice even as we're trying to build a more deeply integrated and automated stack that meets a general set of needs for customers. >> So that begs the question, at the top of the stack where end user computing's going to sit and you're going to advance that piece, what's, what's the to do item for you? What needs to happen there? Is it, on a scale of one to 10, 10 being fully baked out, where is it, what are the white spaces that need to be tweaked either by partners or by VMWare? >> Yeah and I think we're pretty quickly finishing the stack with regard to the traditional PC environments and I think the amount of work to do for the mobile environment is still quite enormous as we go forward and in that, you know, we're excited about Horizon getting some good uptake, a number of partner announcements this week, but there's a lot to be done in that space because people want to be able to secure apps, provision apps, deprovision apps, have secure work spaces, social experiences, a rich range of integrations to the authentication devices associated with it to be able to have applications that are developed in that environment that access this hybrid infrastructure effectively over time, be able to self-compose those applications, put them into enterprise, right, stores and operations, be able to access this big data infrastructure. There's a whole lot of work to be done in that space and I think that'll keep us busy for quite a number of years. >> This is great. We're here with Pat Gelsinger inside theCUBE. We could keep rolling until we get to the hook, but a couple more final questions is the analogy of cloud has always been like the grid, electricity. You kind of hinted to this earlier. I mean is that a fair comparison? The electricity's kind of clean and stable. We have an actual national grid. It doesn't have bad data and hackers coming through it so is that a fair view of cloud to kind of look, talk about plugging electricity in the wall for IT. >> I think that is so trite, right? It came up in the panel we had with Andreessen, Bechtolsheim, Graeme, and myself because you know, it's so standardized. 120 volts AC right and hey you know, maybe it gets distributed as four, 440, three phase, but you know, it is so standardized. It hasn't moved. Sockets standards, right, you're done. Think how fast this cloud world is evolving. Right the line between IA as in PaaS as we just touched upon, the services that are being offered on top of it. >> Security, security. >> Yeah, yeah, all these different things. To me, it is such a trite, simple analogy that has become so used and abused in the process that I think it leads people to such wrong conclusions right, about what we're doing and the innovation that's going on here and the potential that we're going to offer. So I hope that every one of our competitors takes that and says, "That's the right model." Because I think it leads them to exactly the wrong conclusion. >> I couldn't agree more. The big switch is a big myth. I wanted to get tactical for a minute. I listened to your conference calls. I can't wait to read the transcript. I just go, I got to listen to the calls, but just observing those and the conversations around here, I just wanted to ask you. I always ask CEOs, "What keeps you up at night?" They always say execution so let's focus on execution in the next 12 to 18 months. I came up with the following. "To maintain dominance in vSphere, "get revenue beyond vSphere, "broaden end user license agreements, "increase end user computing adoption "and proof points around hybrid cloud." Are those the big ones? Did I miss anything? >> That's a good list. >> Yeah? >> That's a good list. >> So those are the things an observer should watch in let's say 12 to 18 months of indicators of success and of what you're doing and what you're driving. >> Yeah and you know, clearly inside of that, with SDDC, obviously we think this environment for networking, right, and what we've really, I'll say delivered that. That would be one in particular inside of that category that we would call out you know, with regard to our hybrid cloud strategy. It's clearly globalizing that platform. Right, we announced Savvis here, but we need to make this available on a global basis. You go to an enterprise customer and they're going to say, "I need services in Japan, I need services in Singapore. "I need to be able to operate in a global basis." So clearly having a platform, building out the services on top of it is another key aspect of building those hybrid user cases and more of the value on top of it and then in the EUC space, we touched a bit on the mobile thing already. >> So we'll have Martin on later, but his PowerPoint demonstration. >> What a rockstar, what a rockstar. >> He is a rockstar and we've had him on before. He's fantastic, but his PowerPoint demonstration is very simple, made it seem so simple. It's not going to be that easy to virtualize the network. Can you talk about the headwinds there and the challenges that you have and the things that you have to do to actually make progress there and really move the needle? >> Yeah it really sort of boils down in two aspects. One is we are suggesting that there will be a software layer for networking that is far more scalable, agile and robust than you can do in a physical networking layer. That's a pretty tall order, right? I need to be able to scale to tens, hundreds, millions of VMs, right? I need to be able to scale to terabytes of cross-sectional packet flow through this. I need to be able to deliver services on top of this, right, that truly allow firewalls, load balancers, right, IDSes, all of those things to be agile, scale. Yeah, it is ambitious. >> Ambitious. >> This is, right, the most radical, architectural statements in networking in the last 20 or 30 years and that's what gets Martin passionate. So there's a lot of technical scale and we really feel good about what we've done, right, but being able to prove that with robust scalability, right, for which like the Hyper-Visor, it is more reliable than hardware today, in being able to make that same statement about NSX that just like ESX, it is better than hardware, right, in terms of its reliability, its resilience. That's an important thing for us to accomplish technically in that space, but then the other pieces, showing customer value, right? Getting those early customers and what a powerful picture. GE, Citigroup and eBay, right? It's like wow, right? These are massive customers, right, and being able to prove the value and the use cases in the customer settings, right, and if we do those two things, you know, we think that truly we all have accomplished something very very special in the networking domain. >> Pat, talk about the innovation strategy. You've been now a year under your belt at VMWare and you were obviously with EMC and Intel and we mentioned on theCUBE many times, cadence of Moore's Law was kind of the culture of Intel. Why don't you tell us about the innovation strategy of VMWare going forward, your vision, but also talk about the culture and talk about the one thing that VMWare has from a culture that makes it unique and what is that unique feature of the VMWare culture? >> We spent time as a team talking about what is it that drives our innovation, that drives our passion, and clearly as we've talked about our values as a team, it is very much about this passion for technology and passion for customers and how those two coming together, right, with fundamental disruptive "wow" kind of technologies where people just say, like they did when they first used ESX and they say, "Wow, I just didn't ever envision "that you could possibly do that." And that's the experience that we want to deliver over and over again, right, so you know, hugely disruptive powerful software driven virtualization technologies for these domains, but doing it in a way that customers just fall in love with our technologies and you know as, I got a note from Sanjay and I just asked him, "You know, what do you think of VMWorld?" And he said, right, "It is like a cult geek fest." Right, because there's just this deep passion around what people do with our technology, right, and they're not even at that point, they're not customers, they're not partners. They are deeply aligned passionate zealots around what we are doing to make their lives so much more powerful, so much more enabled, right, and ultimately, a lot more fun. >> People say it's like being a car buff. You know, you got to know the engine, you want to know the speeds and feeds. It is a tech culture. >> Yeah, it is absolutely great. >> Pat, thanks for coming on theCUBE. We scan spend a lot of time with you. I know we went a little over. I appreciate your time. Always great to see you. >> Great to see you too. >> Looking good. >> Thank you for that. >> Tech Athlete Pat Gelsinger touching all the bases here. We saw him last night at AT&T Park. Great event here, VMWare World 2013. This is theCUBE. We'll be right back with our next guest after this short break. Pat Gelsinger, CEO on theCUBE.