>> live from San Francisco, celebrating 10 years of high tech coverage. It's the Cube covering Veum World 2019. Brought to you by IBM Wear and its ecosystem partners. >> Welcome back to the cubes Live coverage Of'em World 2019 in San Francisco, California We're here at Mosconi North Lobby. Two sets. Jumper of my Coast. David wanted Dave 10 years. Our 10th season of the cue coming up on our 10 year anniversary May of 2020. But this corner are 10 years of the Cube. Our next guest is Sanjay Putting Chief Operating Officer Of'em where who took the time out of his busy schedule to help us do a commemorative look back. Thanks for coming to our studio. Hello, John. That was great. Fans of yours was really regulations on the 10 year mark with the, um well, we really appreciate your partnership. We really appreciate one. Things we love doing is covering as we call that thing. David, I coined the term tech athletes, you know, kind of the whole joke of ESPN effect that we've been called and they're really tech athlete is just someone who's a strong in tech always fighting for that extra inch. Always putting in the hard work discipline, smart, competitive. You get all that above. Plus, you interviewed athletes today on state real athletes. Real athletes, Tech show. So I guess they would qualify as Tech athlete Steve Young. That's pretty funny. It was a >> great time. We've been trying to, you know, Veum World is now the first time was 2004. So it's 1/16 season here, and traditionally many of these tech conference is a really boring because it's just PowerPoint dead by power point lots of Tec Tec Tec Tec breakout sessions. And we're like, You know, last year we thought, Why don't we mix it up and have something that's inspirational education We had Malala was a huge hit. People are crying at the end of the session. Well, let's try something different this year, and we thought the combination of Steve Young and Lyndsey one would be great. Uh, you know, Listen, just like you guys prepped for these interviews, I did a lot of prep. I mean, I'm not I'm a skier, but I'm nowhere close to an avid skier that watch in the Olympics huge fan of Steve Young so that part was easy, but preparing for Lindsay was tough. There were many dynamics of that interview that I had to really think through. You want to get both of them to converse, you know, he's She's 34 he's 55. You want to get them to really feel like it's a good and I think it kind of played out well. >> You were watching videos. A great prep. Congratulations >> trying t o show. It's the culture of bringing the humanization aspect of your team about tech for good. Also, you believe in culture, too, and I don't get your thoughts on that. You recently promoted one of your person that she has a chief communications Johnstone Johnstone about stars you promote from within. This >> is the >> culture you believe it. Talk about the ethos. Jones is a rock star. We love her. She's just >> hardworking, credible, well respected. Inside VM where and when we had a opening in that area a few months ago, I remember going to the her team meeting and announcing, and the team erupted in cheers. I mean that to me tells me that somebody was well liked from within, respected within and pure level and you know the organization's support for a promotion of that kind of battlefield promotion. It's great big fan of hers, and this is obviously her first show at Vienna. Well, along with Robin, Matt, look. So we kind of both of them as the chief marketing officer, Robin and Jones >> and Robinson story. Low Crawl made her interim first, but they then she became Steve Made it Permanent way. >> Want them to both do well. They have different disciplines. Susan, uh, national does our alliances, you know, if you include my chief of staff for the six of my direct reports are women, and I'm a big believer in more women. And take why? Because I want my Sophia, who's 13 year old do not feel like the tech industry is something that is not welcome to women in tech. So, you know, we really want to see more of them. And I hope that the folks who are reporting to me in senior positions senior vice president is an example can be a role model to other women who are aspiring, say, one day I wanna be like a Jones Stone or Robin. Madam Local Susan Nash, >> John and I both have daughters, so we're passionate about this. Tech is everywhere, so virtually whatever industry they go into. But I've asked this question Sanjay of women before on the Cube. I've never asked him in. And because you have a track record of hiring women, how do you succeed in hiring women? Sometimes way have challenges because way go into our little network. Convenient. What? What's your approach? Gotta >> blow off that network and basically say First off, if that network is only male or sometimes unfortunately white male or just Indian male, which is sometimes the nature of tech I mean, if you're looking for a new position, tell the recruiters to find you something that's different. Find me, Ah woman. Find me on underrepresented minority like an African American Latino and those people exist. You just have a goal. Either build a network yourself. So you've got those people on your radar. We'll go look, and that's more work on us, says leaders. But we should be doing that work. We should be cultivating those people because the more you promote capable. First off, you have to be capable. This is not, you know, some kind of affirmative action away. We want capable people. Someone shouldn't get the job just because they're a woman just because the minority, that's not the way we work. We want capable people to do it. But if we have to go a little further to find them, we'll go do it. That's okay. They exist. So part of my desires to cultivate relationships with women and underrepresented minorities in the world that can actually in the world of tech and maintain those relationships because you never know you're not gonna hire them immediately. But at some point in time, you might need to have them on your radar. >> Sanjay, I wanna ask you a big picture question. I didn't get a chance to ask path this morning. I was at the bar last night just having a little dinner, and I was checking out Twitter. And he said that the time has never been. It's never been a greater time arm or important time to be a technologist. Now I saw that I went interesting. What does that mean? Economic impact, social impact? And I know we often say that, and I don't say this to disparage the comment. It's just to provide historical context and get a get it open discussion about what is actually achievable with tech in this era and what we actually believe. So I started to do some research and I started right down. First of all, I presume you believe that right on your >> trusty napkin at the >> bar. So there has never been a more important time to be a technologist. You know, it's your company at your league. You know, Pat, I presume you agree with it. Yeah, absolutely. I slipped it back to the 1900. Electricity, autos, airplanes, telephones. So you we, as an industry are up against some pretty major innovations. With that historical context, Do you feel as though we can have a similar greater economic and social impact? >> Let's start with economic first and social. Next time. Maybe we should do the opposite, but economic? Absolutely. All those inventions that you >> have are all being reinvented. The technology the airplanes all been joined by software telephones are all driving through, you know, five g, which is all software in the future. So tech is really reinventing every industry, including the mundane non tech industries like agriculture. If you look at what's happening. Agriculture, I ot devices are monitoring the amount of water that should go to particular plant in Brazil, or the way in which you're able to use big data to kind of figure out what's the right way to think about health care, which is becoming very much tech oriented financial service. Every industry is becoming a tech industry. People are putting tech executives on their boards because they need an advice on what is the digital transformations impact on them cybersecurity. Everyone started by this. Part of the reason we made these big moves and security, including the acquisition of carbon black, is because that's a fundamental topic. Now social, we have to really use this as a platform for good. So just the same way that you know a matchstick could help. You know, Warm house and could also tear down the house. Is fire good or bad? That's been the perennial debate since people first discovered fire technology. Is this the same way it can be used? Reboot. It could be bad in our job is leaders is to channel the good and use examples aware tech is making a bit force for good. And then listen. Some parts of it may not be tech, but just our influence in society. One thing that pains me about San Francisco's homelessness and all of the executives that a partner to help rid this wonderful city of homeless men. They have nothing to attack. It might be a lot of our philanthropy that helps solve that and those of us who have much. I mean, I grew up in a poor, uh, bringing from Bangla, India, but now I have much more than I have. Then I grew up my obligations to give back, and that may have nothing to do with Tech would have to do all with my philanthropy. Those are just principles by which I think when you live with your a happier man, happier woman, you build a happier >> society and I want to get your thoughts on common. And I asked a random set of college students, thanks to my son that the network is you said your daughter to look at the key to Pat's King Pat's commentary in The Cube here this morning that was talking about tech for good. And here's some of the comments, but I liked the part about tech for good and humanity. Tech with no purpose is meaningless tech back by purposes. More impactful is what path said then the final comments and Pat's point quality engineering backing quality purpose was great. So again, this is like this is Gen Z, not Millennials. But again, this is the purpose where it's not just window dressing on on industry. It's, you know, neutral fire. I like that argument. Fire. That's a good way Facebook weaponizing Facebook could be good or bad, right? Same thing. But the younger generation. You're new demographics that are coming into cloud. Native. Yeah, what do you think? >> No. And I think that's absolutely right. We have to build a purpose driven company that's purposes much more than just being the world's best softer infrastructure company or being the most profit. We have to obviously deliver results to our shareholders. But I think if you look at the Milton Friedman quote, you know, paper that was written that said, the sole purpose of a company is just making profits, and every business school student is made to read that I >> think even he >> would probably agree that listen today While that's important, the modern company has to also have a appropriate good that they are focused on, you know, with social good or not. And I don't think it's a trade off being able to have a purpose driven culture that makes an impact on society and being profitable. >> And a pointed out yesterday on our intro analysis, the old term was You guys go Oh, yeah, Michael Dell and PAD shareholder value. They point out that stakeholder value, because now the stakeholder Employees and society. So congratulations could keep keep keep it going on the millennial generation. >> Just like your son and our kids want a purpose driven company. They want to know that the company that working for is having an impact. Um, not just making an impression. You do that. It shows like, but having an impact. >> And fire is the most popular icon on instagram. Is that right? Yeah, I know that fire is good. Like your fire. Your hot I don't know. I guess. Whatever. Um fire. Come comment. There was good Sanjay now on business front. Okay, again, A lot of inflection points happen over 10 years. We look back at some of this era, the Abel's relationship would you know about. But they've also brought up a nuance which we talked about on the intro air Watch. You were part of that acquisition again. Pig part of it. So what Nasiriyah did for the networking STD see movement that shaped VM. Whereas it is today your acquisition that you were involved and also shaping the end user computing was also kind of come together with the cloud Natives. >> How is >> this coming to market? I mean, you could get with >> my comparison with carbon black there watch was out of the building. Carbon black is not considered. >> Let's talk about it openly. And we talked about it some of the earnings because we got that question. Listen, I was very fortunate. Bless to work on the revitalization of end user computing that was Turbo charged to the acquisition of a watch. At that time was the biggest acquisition we did on both Nice era and air watch put us into court new markets, networking and enterprise mobility of what we call not additional work space. And they've been so successful thanks to know not just me. It was a team of village that made those successful. There's a lot of parallels what we're doing. Carbon, black and security. As we looked at the security industry, we feel it's broken. I alluded to this, but if I could replay just 30 seconds of what I said on some very important for your viewers to know this if I went to my doctor, my mom's a doctor and I asked her how Doe I get well, and she proposed 5000 tablets to me. Okay, it would take me at 30 seconds of pop to eat a tablet a couple of weeks to eat 5000 tablets. That's not how you stay healthy. And the analogy is 5000 metres and security all saying that they're important fact. They use similar words to the health care industry viruses. I mean, you know, you and what do you do instead, to stay healthy, you have a good diet. You eat your vegetables or fruit. Your proteins drink water. So part of a diet is making security intrinsic to the platform. So the more that we could make security intrinsic to the platform, we avoid the bloatware of agents, the number of different consuls, all of this pleasure of tools that led to this morass. And what happens at the end of that is you about these point vendors, Okay, Who get gobbled up by hardware companies that's happening spattered my hardware companies and sold to private equity companies. What happens? The talent they all leave, we look at the landscape is that's ripe for disruption, much the same way we saw things with their watch. And, you know, we had only companies focusing VD I and we revitalize and innovative that space. So what we're gonna do in securities make it intrinsic and take a modern cloud security company carbon black, and make that part of our endpoint Security and Security Analytics strategy? Yes, they're one of two companies that focus in the space. And when we did air watch, they were number three. Good was number one. Mobile line was number two and that which was number three and the embers hands. We got number one. The perception in this space is common. Lacks number two and crowdstrike number one. That's okay, you know, that might be placed with multiple vendors, but that's the state of it today, and we're not going point against Crowdstrike. Our competition's not just an endpoint security point to a were reshaping the entire security industry, and we believe with the integration that we have planned, like that product is really good. I would say just a cz good upper hand in some areas ahead of common black, not even counting the things we're gonna integrate with it. It's just that they didn't have the gold market muscle. I mean, the sales and marketing of that company was not as further ahead that >> we >> change Of'em where we've got an incredible distribution will bundle that also with the Dell distribution, and that can change. And it doesn't take long for that to take a lot of customers here. One copy black. So that's the way in which we were old. >> A lot of growth there. >> Yeah, plenty of >> opportunity to follow up on that because you've obviously looked at a lot of companies and crowdstrike. I mean, huge valuation compared to what you guys paid for carbon black. I mean, >> I'm a buyer. I mean, if I'm a buyer, I liked what we paid. >> Well, I had some color to it. Just when you line up the Was it really go to market. I mean some functions. Maybe not that there >> was a >> few product gaps, but it's not very nominal. But when you add what we announced in a road map app, defensive alderman management, the integration of works based one this category is gonna be reshaped very quickly. Nobody, I mean, the place. We're probably gonna compete more semantic and McAfee because most of those companies that kind of decaying assets, you know, they've gotten acquired by the companies and they're not innovating. So I'd say the bulk of the market will be eating up the leftover fossils of those sort of companies as as companies decided they want to invest in legacy. Technology is a more modern, but I think the differentiation from Crowdstrike very clear is we integrate these, these technology and the V's fear. Let me give an example. With that defense, we can make that that workload security agent list. Nobody can do that. Nobody, And that's apt defense with carbon black huge innovation. I described on stage workspace one plus carbon black is like peanut butter and jelly management. Security should go together. Nobody could do that as good as us. Okay, what we do inside NSX. So those four areas that I outlined in our plans with carbon black pending the close of the transaction into V sphere Agent Lis with workspace one unified with NSX integrated and into secure state, You know, in the cloud security area we take that and then send it through the V m. Where the devil and other ecosystem channels like you No idea. Security operative CDW You know, I think Dimension data, all the security savvy partners here. I think the distribution and the innovation of any of'em were takes over long term across strike may have a very legitimate place, but our strategy is very different. We're not going point tool against 0.0.2 wish reshaping the security industry. Yeah, What platform? >> You're not done building that platform. My obvious question is the other other assets inside of Arcee and secureworks that you'd like to get your hands on. >> I mean, listen, at this point in time, we are good. I mean, it's the same thing like asking me when we acquired air watching. Nice Here. Are you gonna do more networking and mobility? Yeah, but we're right now. We got enough to Digest in due course you. For five years later, we did acquire Arkin for network Analytics. We acquired fellow Cloud for SD when we're cloud recently, Avi. So the approach we take a hammer to innovations first. You know, if you're gonna have an anchor acquisition, make sure it's got critical mass. I mean, buying a small start up with only 35 people 10 people doesn't really work for us. So we got 1100 people would come back, we're gonna build on it. But let's build, build, build, build, partner and then acquire. So we will partner a lot with a lot of players. That compliment competition will build a lot around this. >> And years from now, we need >> add another tuck in acquisition. But we feel we get a lot in this acquisition from both endpoint security and Security Analytics. Okay, it's too early to say how much more we will need and when we will need that. But, you know, our goal would be Let's go plot away. I have a billion dollar business and then take it from there. >> One more security question, if I may say so. I'm not trying to pit you against your friends and AWS. But there are some cleared areas where your counter poise >> Stevens just runs on eight of us comin back. >> That part about a cloud that helps your class ass business. I like the acquisition. But Steven Schmidt, it reinforced the cloud security conference, said, You know, this narrative in the industry that security is broken is not the right one. Now, by the way, agree with this. Security's a do over pat kill singer. And we talked about that for five years ago. Um, but then in eight of you says the shared security model, when you talk to the practitioners like, yeah, they they cover, that's three and compute. But we have the the real work to d'oh! So help me square that circle. >> Yeah, I think if aws bills Security Service is that our intrinsic to their platform and they open up a prize, we should leverage it. But I don't think aws is gonna build workload security for azure compute or for Gogol compute. That's against the embers or into the sphere. Like after finishing third accordion. And they're like, That's not a goal. You go do it via more So from my perspective. Come back to hydrogen. 80. If there's a workload security problem that's going to require security at the kernel of the hyper visor E C to azure compute containers. Google Compute. >> Who's gonna do >> that? Jammer? Hopefully, hopefully better than because we understand the so workloads. Okay, now go to the client site. There's Windows endpoints. There's Mac. There's Lennox. Who should do it? We've been doing that for a while on the client side and added with workspace one. So I think if you believe there is a Switzerland case for security, just like there was a Switzerland case for management endpoint management I described in Point management in Point Security going together like peanut butter and jelly, Whatever your favorite analogy is, if we do that well, we will prove to the market just like we did with their watch An endpoint management. There is a new way of doing endpoint security. Dan has been done ever before. Okay, none >> of these >> guys let me give an example. I've worked at Semantic 15 years ago. I know a lot about the space. None of these guys built a really strategic partnership with the laptop vendors. Okay, Del was not partnering strategically on their laptops with semantic micro. Why? Because if this wasn't a priority, then they were, you know, and a key part of what we're doing here is gonna be able to do end point management. And in point security and partner Adult, they announced unified workspace integrated into the silicon of Dell laptops. Okay, we can add endpoint security that capability next. Why not? I mean, if you could do management security. So, you know, we think that workspace one, we'll get standing toe work space security with the combination of workspace one and security moving and carbon black. >> Sanjay, we talked about this on our little preview and delivery. Done us. We don't need to go into it. The Amazon relationship cleared the way for the strategy in stock price since October 2016 up. But >> one of the >> things I remember from that announcement that I heard from the field sales folks that that were salespeople for VM wear as well as customers, was finally clarity around. What the hell? We're doing the cloud. So I bring up the go to market In the business side, the business results are still strong. Doing great. You guys doing a great job? >> How do you >> keep your field troops motivated? I know Michael Dell says these are all in a strategy line. So when we do these acquisitions, you >> had a lot >> of new stuff coming in. I mean, what's how do you keep him trained? Motivated constantly simplifying whenever >> you get complex because you add into your portfolio, you go back and simplify, simplify, simplify, make it Sesame Street simple. So we go back to that any cloud, any app, any device diagram, if you would, which had security on the side. And we say Now, let's tell you looking this diagram how the new moves that we've made, whether it's pivotal and what we're announcing with tanz ou in the container layer that's in that any Apple air carbon black on the security there. But the core strategy of the emer stays the same. So the any cloud strategy now with the relevance now what, what eight of us, Who's our first and preferred partner? But if you watched on stage, Freddie Mac was incredible. Story. Off moving 600 absent of the N word cloud made of us Fred and Tim Snyder talked about that very eloquently. The deputy CTO. They're ratty Murthy. CTO off Gap basically goes out and says, Listen, I got 800 APS. I'm gonna invest a lot on premise, and when I go to the cloud, I'm actually going to Azure. >> Thanks for joining you. Keep winning. Keep motivated through winning >> and you articulate a strategy that constantly tells people Listen. It's their choice of how they run in the data center in the cloud. It's their choice, and we basically on top of all of those in the any cloud AP world. That's how we play on the same with the device and the >> security. A lot of great things having Sanjay. Thanks >> for you know what a cricket fan I am. Congratulations. India won by 318 goals. Is that >> what they call girls run against the West Indies? I think you >> should stay on and be a 40 niner fan for when you get Tom baseball get Tom Brady's a keynote will know will be in good Wasn't Steve Young and today love so inspirational and we just love them? Thank you for coming on the Cube. 10 years. Congratulations. Any cute moments you can point out >> all of them. I mean, I think when I first came to, I was Who's the d? I said ASAP, like these guys, John and Dave, and I was like, Man, they're authentic people. What I like about you is your authentic real good questions. When I came first year, you groomed me a lot of their watch like, Hey, this could be a big hat. No cattle. What you gonna do? And you made me accountable. You grilled me on eight of us. You're grilling me right now on cloud native and modern, absent security, which is good. You keep us accountable. Hopefully, every you're that we come to you, we want to show as a team that we're making progress and then were credible back with you. That's the way we roll. >> Sanjay. Thanks for coming. Appreciate. Okay, we're live here. Stay with us for more of this short break from San Francisco v emerald 2019

>> Announcer: Live from Las Vegas, it's The CUBE, covering VMworld 2017, brought to you by VMware and its ecosystem partners. >> Hey welcome back everyone, we're live here in Las Vegas. Behind me is the VM Village, this is The CUBE on the ground live at VMworld, I'm John Furrier, with Dave Vellante. Excited to have Sanjay Poonen, Cube VIP new badge that's going out. Five or more times you get a special badge on the website Chief Operating Officer, Chief Customer Operations as well at VMware, Sanjay. >> I think I won one of your hoop madness what do you call those Cube >> John: Yeah, that's right. You did get one of those. >> One of them, so add that to the smallest. >> Came in second to the bot, next year you won. We're going to have to check the algorithm on it that's before we had machine learning, so... Sanjay, great to see you. >> Always a pleasure, John and Dave, thank you for having me here. >> So, you know, in fairness to the VMware management team I got to say, great content program. Usually you can see, kind of, maybe some things that are kind of a little futuristic on the spot big time, on the content. True private cloud, data that Wikibon reported on, you guys are right in line with that. Hybrid-cloud is where its going from multi-cloud. You talk multi-cloud, the Kubernetes orchestration vision for Cloud Native, and even you were doing some interviewing on stage. >> Trying to be Anderson Cooper. >> So, tell us, what's your perspective because you got to balance here you got the reality of the Amazon relationship front and center, delivered big time there, shipping, western region, VMware on-prem, and on-cloud and this new cloud native vector of orchestration and simplicity. >> Yeah, I think, at least from our perspective as I describe in sort of that one chart where I try to put it in Sesame Street simple terms as I like to describe. VMware is one of the most fundamental companies that had a incredible impact in the data center, taking more costs and complexity. We are the defacto backbone of almost everybody's data center, but as the data center moves to the cloud you got to ask yourself, what's the relevance, and we've now shown, same way with the desktop going to mobile, and that's the end-user stuff that we've talked about the last few shows. But let's focus on that cloud part. We really felt as people extended to the public cloud we had to change our strategy to not seek to be a public cloud ourselves, and that's the reason we divested VCloud Air, and focused on significant things we could do with the leading public cloud vendors. As you know, Andy Jassy is a classmate of mine, Pat, Raghu, myself, began the discussions with Andy two years ago, and we announced the deal last year in October. This year having him on stage was, for me, personally a dream come true, and really nice to see that announcement, but we wanted to make sure we were also relevant to some of the other clouds. So earlier this year, in February, we announced Horizon Cloud, the VDI product manager. Today, we announced Kubernetes VMware, Pivotal and Google Form in Kubernetes, IBM Cloud. So all of the top four clouds, AWS, Azure, Google, and IBM have something going with VMware being with Pivotal. That's a big statement to our multi-cloud vision. >> And what a changeover from just two years ago when the ecosystem was, kind of, like a deer in the headlights, not knowing which way to zig or zag, do they cross the street. Where are we going with this? Now the clarity's very clear, cloud, and IoT, and edge with Amazon right there, a lot of the workloads there with multi-cloud. So the question I got to have you is that, as we just talked to the Google guys, is VMware turning into an arms dealer? Because that's a nice position to be at, because you're now driving VMware into multiple clouds. >> I think, you know, when I was on your show last time I described this continent called VMware, and then bridges into them. (John laughs) Let me try another and see if this works. That was good, but it had its 12-month shelf life. Think about the top four public clouds as sort of Mount Rushmore type figures. Each at different heights, AWS, Azure, Google, IBM Cloud, in market share they're the top four. If you want to build a house on top of Mount Rushmore, okay, it could work, but you're going to have to build it on top of one president's head. The moment you want to build it, you need some concrete infrastructure that fills in all the holes between them. That's VMware. It's the infrastructure platform that can sit on top of those varied disparate levels of Mount Rushmore, and make yourself relevant from on. So that's why we fell, whether you want to call that a quintessential platform, an arms provider, whatever it is, for the 4,400 cloud providers, plus the top four or five public cloud players today, VMware has to be relevant. We weren't two or three years ago. Now, for the top three, we're very relevant. >> I call it a binding agent. You're the binding agent across clouds, that's what you're really trying to become. But I wonder if, you know, you're talking about the clarity. I mean, VMware, things are good right now. Two years ago, was looking kind of hmmm, maybe not so good, with license growth down, and now it's up, stock prices double digits, >> Stock prices almost highest >> Okay, so I want to understand the factors behind that. You mentioned the clarity around vCloud Air and the AWS agreement, clearly. The second I want to attest is, the customer reality of cloud, that I can't just ship my business to the cloud, ship my data to the cloud. I got to bring the cloud model to the data. Did that in your conversation with customers, those two factors lead to customers being more comfortable, signing longer term agreements with you guys. Is that a bit part of the tailwind? I wonder if you could discuss that. >> Yeah, Dave I think that's absolutely right. One of the things I've learned in my 25 years of IT is, you want to keep being strategic to your customers. You never want to be in a place where you're in a cul-de-sac. And I started to sense, right, not definitively, but perhaps two years ago, there was a little it of that cul-de-sac perception as our license revenue was growing, particularly on this cloud strategy. Are you trying to be a public cloud, are you not, what's your stance versus AWS as one example, and with vCloud Air, there was a little bit of that hesitation. And if you asked our sales teams, the clarifying of our cloud strategy, which last year was okay but didn't have the substance or the punch. Now you've got an AWS coming on stage, and the other cloud providers where we have substance. I think that clarifying the cloud strategy game the ability for customers to say, even while they were waiting for AWS to be shipped, the last year, three or four quarters are spending of on-premise VMware stuff has gone up, 'cause they see us as strategic. The second aspect I think is our products are now a lot more mature than they were before outside of B sphere. VMware cloud foundation, which consists of storage, networking, VSAN, NSX, and you've talked to those people on your stage, workspace one, end user computing. These have really, really helped, and I think the third factor is, we've really focused on building a very strong team, from Pat, myself, to Raghu, Rajeev, Ray, Mauricio, Robin, I think it's a world-class infrastructure, so we just added Claire Dixon as our Chief Comms Officer on eBay. This is for us now, and everyone in the rest of the organization, we want to continue building a world-class sort of warrior-style strength in numbers. >> Quick follow-up if I may, just a little Jim Kramer moment. And the financial's looking good, you just raised four billion of cheap debt, right the operating cash flow, three billion dollars, and the nice thing about the clarity around vCloud Air is, the capital expenditure, it's just a very capital-efficient model that you guys have now, and I've been saying, you can't say it, but to me the stock's undervalued. When you do the ratios and the multiples on those factors, it looks like a cheap stock to me. >> John: I would love to see you buy it because we have to disclose it, the big position in VMware. >> No, no, no. >> We don't have any stock >> I wish we did. >> We just want to keep growing and the market will fairly value us over time. >> Yeah, it will. >> Well you guys had a good team at VMware, so let's just go back and unpack that. So there was a transformation. Peter Burrows was talking about IBM over the years, had a massive transformation, so really kind of a critical moment for VMware as you're pointing out. We had this great discipline, great technology, great community folks, still there now, as you mentioned, but that transition from saying, we got to post a position, are we in cloud or not, let's make a decision and move on, and as Dave said, it's good economics behind not having a cloud, but I saw a slide that said VMware Cloud, you can still have a cloud strategy using Amazon. Okay, I get that. So the question for you is this. This is the debate that we've been having. Just like in the cryptocurrency market, you're seeing native tokens in cryptography, and then secondary tokens, just one went crazy today. With cloud, we see native cloud, and then new clouds that are going to be specialty clouds. You're seeing a huge increase the long-tail power law of cloud providers that are sitting on other clouds. We think this is a trend. How does VMware help those potential ascensior clouds, the Deloitte clouds, the farming drone cloud that's going to have unique applications? So if applications become clouds, how does VMware help that? >> That's a really good question. So first off, we have 4,400 cloud providers that built their stacks on VMware. And it could be some of these sourced. Probably the best example are companies like Rackspace, OVH, T-Systems. And we're going to continue to empower them, and I think many of them that are in country-specific areas, France, Germany, China, Asia, have laws that require data to be there, and I think they quite frankly have a long existence, and some of them like Rackspace have adapted their model to be partnering with AWS, so we're going to continue to help them, and that's our VMware cloud provider program, that's going to be great. The other phenomenon we see happening is these mini data centers starting to form at what's called the edge. So edge computing is really almost like this mobile device becoming bigger and bigger, it becomes like a refrigerator, it becomes like a mini data center, and it's not sitting in the cloud, it's actually sitting in a branch someplace or somewhere external. VMware Stack could actually become the software that powers that whole thing. So if you believe that basically cloud providers are going to be three or four or five big public clouds, a bunch of cloud providers are country-specific, or vertical-specific, again in these edge computings, VMware becomes quintessentially important to all of those, and we become, whether you call it a platform, a glue, or whatever have you, and our goal is to make sure we're pervasive in all of those. I think it's going to, world is go, going to go from mobile cloud to cloud edge, I mean the whole word of cloud and edge computing is the future. >> So you believe that there potentially could be another second coming of more CSPs exploding big time. >> Especially with edge computing, and country-specific rules. There's some countries that just won't do business with a US public cloud because of whatever reason. >> Well, many of those 4,400 would say, hey, we have to have a niche so we can compete with AWS, so we don't get AWS-ized. So what's your message to those guys now that you're sort of partnered up with AWS? >> Listen, OVH is a good example. Virtuastream's another, I'll give you two good examples. OVH, we sold vCloud Air to them. We are helping those customers be successful. I go to some of those calls jointly with them, they are based in France expending some of their presence to the US, and have got some very specific IP that makes their data centers efficient. We want to help then be successful. Some of the technology that we've built in vCloud Air, we're now licensing to them so we can them be successful. Virtustream, you know Rodney Rogers being on your show. Mission-critical apps is tough for some of the public clouds to get right. They've perfected the art, and I've known them from my SAP days. So there's going to be some of these other clouds that are going to be enormously successful in their niche, and their niche are going to get bigger and bigger. We want to make sure every one of them are successful. And I think there's a big opportunity for multiple vendors to be successful. It won't be just the top three or four public clouds. There will be some boutique usage by country or some horizontal or vertical use case. >> Good for an arms dealer. Well this is my whole point, this is what we've been getting at. We're kind of riffing in real time, little competitive strategy, we got the Harvard MBA and I'm the Babson guy, we'll arm wrestle it out here, maybe do some car karaoke together. But this brings up the question, and I've been saying for a long time on The Cube, and Dave and I have been talking about, we see a long tail, torso neck expanding, where right now it's a knife-edge, long tail, top native clouds and then nobody else. So I think we're going to see this expand out where specialty clouds are going to come out for your reasons. So that is going to open up the door, and those guys they're not going to want their own cloud. >> Sanjay: I agree. >> And that's a channel, an app, who knows? >> You look at an example, one, two other examples of specialty clouds, these are SAS vendors. If you look at two vertical companies, Viva and Guidewire. These are SAS companies that are in the life sciences and insurance space. They've been enormously successful in a space that you're probably maybe a Zapier Salesforce would have done, but they have been focused in a vertical market, insurance and life sciences. And I think there's going to be many providers the same way at the IS level or the PAS level, to also be successful and we welcome, this is going to be a large multi-cloud world. >> Edge cloud. You guys talking about the edge before. Pat had the slide of the pendulum swinging. >> Sanjay: Exactly. >> What is that edge cloud do to the existing business? Is it disruptive or is it evolutionary in your opinion? >> It's disruptive in the sense that, if you've taken a hardware-centric view of that, I think you're going to be disrupted. You take things like software-defined WAN, software-defined networking. So I think the beauty of software is that we're not depending on the size of the hardware that sits underneath it, whether it's a big data center or small edge of the cloud. We're building this to be an all-form factors, and I agree with Marc Andreessen in the sense the software's eating up the world. So given the fact that VMware >> And the edge. >> Yeah, our premise is if there's more computing that's moving to the edge, more software define happening at the edge, we should benefit from that. The hardware vendors will have to adapt, and that's good. But software becomes quintessential. Now I think the edge is showing a little bit of, like, you know, Peter Levine had a story about how cloud computing might be extinct if edge computing takes off. Because what's happening is this machine starts to get bigger and bigger and sits in a branch or in some local place, and it's away from the cloud. So I think it actually is a beautiful world where if you're willing to adapt quickly, which software lets you do, adapt quickly, I think there's a bright future as world moves cloud, mobile, and edge. >> Great stuff, Sanjay, and I was referencing car karaoke, you have on your Twitter >> Oh the carpool karaoke. >> The carpool karaoke. >> It was a fun little thing. Maybe we could do it together, three of us some time. (John laughs) >> I don't do karaoke. Final... >> Just sing, man Just be out there doing your thing. >> I embarrass myself on The Cube enough, I don't need karaoke to help there. >> David: I'm in. (laughs) >> All right, I'll do it. All right, final question for you. >> That's a deal. Let's do it. >> Final question, Michael Dell and we're talking, the world's upside down right now, the computer industry has been thrown up in the air, it's going to be upside down, reconfiguration. You've been in the business for a long time, you've seen many waves. Actually the waves now are pretty clear. What's the fallout going to be from this for customers, for the vendors, for how people buy and build relationships in this new world? >> I think there's a couple of fundamental principles. I talked about one, software, let's not repeat that. I think ecosystems rule. It's really important that you don't look at yourself as having to own the full stack, you know VMware's chosen to be hardware-dependent. Yes, we're owned by Dell, but you've seen us announce a HP partnership here, right? You've seen us do deals with Fujitsu. We had AWS Cloud and Google Cloud. So when you view the world, I love this line by Isaac Newton, he said, "I see clearly because I stand on the shoulders of giants." And to me, that's a very informed strategy to actually guide our ecosystem strategy. Who are the giants in our space? It's the companies that are relevant, with the biggest market caps. Apple, Google, Microsoft, you know, AWS is part of Amazon, and then you know, HP, EMC, Dell, so and so, we list them, by my SAP. If we're relevant to all of them, I'd love to see the momentum of VMworld and the momentum to reinvent start coalescing. Collectively there's probably a hundred thousand people who come to all of our VMware vForums. Andy Jassy told me he expects 40,000 at re:Invent, and maybe across all of his AWS summits, he has a hundred thousand. I was sharing with him an idea. Why don't we have these two amoebas of growing conferences start to coalesce where we mingle, maybe 20% goes to both conferences, but we'll come to your show and be the best software vendor, that hijacks your show, so to speak, (John laughs) I didn't use that word. But we become the best vendor, and we'll roll out the red carpet to you. Now we've got a collection of 200,000, we couldn't have done that on our own. That's an example of AWS and VMware partnering. Now it doesn't have to be exclusively AWS, we could do it with another partner too. Microsoft doesn't show up at the AWS re:Invent conference, we do. Similarly we could maybe do something very specific with Azure and VDI at the Microsoft event, or Kubernetes and Google. So for VMware, our strategy needs to be highly relevant to the power players in the ecosystem, and the guiding our software-defined strategy to make that work, and I think if we do that, you know, you could see this be a 10 billion and bigger company. >> Well it says it's not a zero sum game, >> Sanjay: No, everybody wins. >> And if you can stay in the game, everybody wins, right. >> And I think in the software-defined infrastructure space, we like our odds. We feel we could be the leading player in that software-defined area. >> And it changes and reimagines that relationship between how people consume or procure technology, because the cloud's a mosaic, as Sam Ramji was telling me earlier. >> Oh you had Sam on your show? Wonderful. >> I had him on earlier, and he sees the cloud as a mosaic. >> He's a fantastic thought leader in open source, we were deeply grateful to have him at our event today. >> Andy Jassy, your classmate and friend, collaborator, he was onstage, great performance that he gave. Really talking to your crowd, saying, "We got your back," basically. Not a barney deals, not a optical deal, we are in on it, we're investing, and we got your back. That's interesting. >> We want to be with all of the key leaders that are driving significant parts of the ecosystem, we want to be friends, our tent is large. If everybody. Provided there's, like you said, not a barney announcement, so provided there's value to the customer. If there is, our tent is large, right? We will have point competitors, you know, here and there, and you know me, I'm very competitive. >> John: (laughs) No! >> I've not named competitors too much in this show. >> Really, really. >> But, if anything now, my mind's a lot more focused on the ecosystem, and I want to make this tent large for as many, many players to come here and have a big presence at VMworld. >> And the ecosystem is reforming around this new cloud reality, and the edge is going to change that shape even further. >> Competing on value, competing in a new ecosystem requires a new way to think about relationships. >> If I could give you one other example, then. In the world of mobile, who would have thought that the most important company to mobile security and enterprise to Apple is VMware now, thanks to AirWatch, or to Samsung, whatever it might be, right. This is the world we live in, and we have to constantly adapt ourselves. So maybe next year we'll be talking about IoT or something different, and their ecosystem. >> Sanjay Poonen, COO of VMware, good friend inside The Cube, always candid. Thanks for sharing your commentary and color on the industry, VMware and your personal perspective. I'm John Furrier, Cube coverage live in Las Vegas, here on the ground floor in the VM Village. We'll be right back with more live coverage after this short break.

>> Be a relationship. It's not like you guys are johnny-come-lately on Amazon Web Services. Can you just quickly give some color on the relationship with AWS and what it means with respect to HANA Enterprise Cloud. >> Absolutely, and I think that you are spot on here. I think the relationship between SAP and Amazon Web Services dates quite some years back, all the way to Amazon Web Services being a participant, especially with their teams, their architects, sitting side by side with SAP in Walldorf to conduct a lot of these validations, to conduct a lot of these certifications, that took place, so I think that level of collaboration is basically almost coming to (mumble). When you look at some of these offerings that come out there. I think also the way that you see (mumbles) otherwise that has been built specifically for those kind of HANA workloads. That clearly will happen only if these two companies are working extremely closely together but not just from a go-to-market perspective, but more importantly, from an engineering and from development perspective. >> Yeah. >> Sanjay: Having that voice within the HANA development organization ensures that we are actually representing the wants of the customer around consumption patterns that we know for a fact are going to take place on the (mumbles) as well. >> Congratulations on that Amazon relationship. It's always good to know it's not a-- Just to clarify, I want to see if you can just verify as a source, since I have you on the phone here, and you're senior vice president. Is it true, I've heard, I just want to confirm with you. I've heard that the Amazon relationship has always been there for four years, but a lot of the stuff that has come out of the announcement that you announced this week was already going on independently with customers and third parties. You guys are now formalizing that with official teams and joint development. Is that correct? >> Sanjay: So I think, like I mentioned, the engineering relationship between SAP and Amazon (mumbles) for quite some time now. I think we would not have made decisions. In fact, even before, the HANA Enterprise Cloud managed services (mumbles) universally offered, based on these certified workloads, based on these certified (mumbles), there was an option for customers to go and deploy some of their SAP systems, not just test and development but also product assistants directly in the Amazon Web Services Cloud. What the HAC, also in our managed (mumbles) offers, is it's now SAP putting some of these workloads directly in the AWS environment and helping the customers manage all of this from an end-to-end perspective. >> So that's the key, the difference, if I get this right, is before it wasn't fully end to end because you didn't have your piece there, but you were there anyway with the engineers, so is that, and am I getting that right? It seems like you've always been there with engineering, but now there's so much more formal relationships, and that should ease things up, is that correct? >> Sanjay: Yes, so I think the difference in the past, John, was it was pretty much up to the customer to manage the entire transition, whether it was around provisioning, whether it was around administration, whether it was around patching, whether it was around upgrades. All of that stuff was pretty much entirely done in the domain of the customer, and the customer was responsible for doing that themselves. With this offering, what SAP is doing is SAP is telling the customers, we are going to stand up these environments for you in AWS, and we are going to manage it end to end for you, and that includes the entire suite of managed services that goes around managing a HANA-based system, and obviously SAP as the native vendor of these products, have a very specific point of view on what constitutes or what makes a best-run HANA application. >> And just to close the loop on that, what you just said is what you call managed public cloud model. >> Sanjay: Correct. >> That's the offering. Okay, great, well thanks for clarifying that. I wanted to make sure I got that on the record. I think that's kind of what... I thought you said it the best. I'll just plagiarize what you just said and put that in my writeup on that. I'll source you on that, of course. >> Sanjay: Perfect. >> Final question. What's the vibe of the show? Every year I come out of Sapphire. This is our first year we haven't been there in seven years. Usually a theme pops up. You mentioned convergence. Is that the top level theme? And the second part of the question is, Hasso always a great motivating relevant speech, but he also kind of connects the dots, or puts the dots out there to be connected. He kind of teases next year in his vision. He always has his point of view, which a lot of people watch in the industry as kind of a bellwether for next year. >> Sanjay: Correct. >> So what's the theme this year, and what's the bellwether vibe that Hasso is telegraphing. >> Sanjay: I think there are at least a couple of things that stood out for me, and I think, by the way, it was one of the most brilliant or most inspiring keynotes that I heard personally from Hasso. I think the one thing that stood out for me is the amount of time or the amount of effort and the way that we actually build user interfaces. I think there is absolutely a radically different approach that I think we need to take. We need to be spending far far more time building out those user interfaces and making it a lot more intuitive and absolutely Sesame Street simple. I think that's where we need to focus on, number one. The other key item that he did touch upon was the topic of integration. I think the new reality is the one of multi-cloud solution, the hybrid reality. I think for all these things to come together in a sensible fashion, integration becomes more and more key. I think he even quoted something to the extent, saying almost 40% of our development folks are now working directly on some of these integration topics, which is, I think, a guesstimate due to the scale and the value that integration is going to play, especially when he talks about both SAP and non-SAP applications going forward. So I think these are kind of one or two items that stood out for me, and of course, the big announcement, specifically around SAP Leonardo and the tool set. Obviously the story around the Big Data and analytics. I think these were the key stand-outs, especially for me, as far as the keynote. >> Sanjay, thank you for spending the time this morning here on the West Coast but also early morning for you guys, or late morning for you guys in Orlando. Thanks for sharing the insight from on the ground in Orlando at SAP, Sapphire Now. Sanjay Kulkarni who is the global head of architecture and advisory for SAP HANA Enterprise Cloud. Congratulations on the Amazon announcement. That adds to your portfolio of Cloud, and congratulations on the CenturyLink-Cisco alliance as well, we covered that as well. Thanks so much for spending the time. This is TheCUBE coverage of Sapphire Now, day three, from Palo Alto and Orlando. We'll be back with more coverage after this short break. Stay with us. (tech music)