>> Live from San Francisco, it's theCUBE covering DockerCon '18, brought to you by Docker and its ecosystem partners. >> Welcome back to theCUBE, we are live at DockerCon 2018 on a stunning day in San Francisco at Moscone West. I'm Lisa Martin with John Troyer and we're excited to welcome two new folks to theCUBE from Skytap. We've got Lucas Welch, the senior director of communications and Hamish Hill, technical product marketing manager. Hey, guys. >> Great to be here, thanks for having us. >> And thanks for adding a lot of color, Lucas, to our set. >> Well, I just wanted to bring enough flair that you could realize I might have something interesting to say. >> Awesome, so speaking of interesting things, tell us about Skytap, what do you guys do, who are you, where are you based? >> Great, so Skytap. Founded in 2006, so relatively old by start-up standards but it's allowed us to learn a lot about where clouded option has been going. And what we've seen is there really is an overlooked challenge that enterprises are facing today, right? So, cloud native development, growing rapidly, gonna continue to develop, but what do you do with all your old stuff, your existing applications? And so Skytap is a cloud purpose-built for modernizing those traditional applications and we do that through a process we call IPA, although we don't advocate that you drink on the job. It's Infrastructure, Process, and Architecture. And the idea is to really get yourself to true modernization and making the most of cloud, and containers, and all of the modern technologies we can see on the show floor behind us, you first need to modernize the infrastructure, get yourself out of the data center. From there, in eliminating that barrier, you're gonna be able to modernize the processes. How do you develop, how do you change your applications? And by getting better in that regard, adopting things like DevOps and agile methodologies, finally you can start to make changes to the application themselves. So, in short order, we are the cloud for modernizing traditional applications and we like to see ourselves as complementary to the folks at AWS behind us and others who are best for that cloud native web scale development of new applications. >> Great conversation this morning at the Key Note about modernizing applications. I think it's on everybody's mind because the world does not start fresh and new every day, right? We all are working with things that we've been carrying, for some cases, for years and decades. So Docker is talking about, in fact we modernized a .NET application, I think, this morning so they showed a little bit of a demo with that and kubernetes. Can you talk a little bit about how you work with Docker and, you know, some of the challenges that you work with in terms of modernizing applications? >> Yeah, Docker has a great framework with what they have with their MTA. Actually, our VP of Product, Dan Jones, presented yesterday on making modernization magical and really looking at how Skytap complements what Docker has with their MTA framework. And I think Skytap provides, with our IPA approach, a great platform for enterprises to execute the Docker MTA approach and beyond that, sort of what Skytap provides is the abilities, sort of, to move out of the data center and get away from the hardware side of things, and start to leverage some of the scale that you can get out of the cloud. >> What are some of the things that an enterprise, that a legacy application expects that it's not gonna have if you just lift and shift it. You know, why do we need Skytap? >> Yeah, I think what's important to remember is often, even just lifting and shifting it is very difficult because if you want a monolithic or traditional application that's very much wed to the infrastructure it was built on five, 10, 15 years ago, taking that and putting it in a hyper scale provider often means you gotta rewrite from scratch and that's a really arduous process, often one that creates a skills challenge in and of itself because not only do you need people to manage the existing application, you need a whole set of new skills to take a cloud-like approach to that development. So that can create a lot of challenges and so what we see here at DockerCon, really the reason we're here, is both Docker and Skytap see the next wave of cloud, the next wave of modern development, is gonna be, "How do we bring all these benefits we've seen "in Cloud Native development "to those existing applications?" and what we see ourselves doing is eliminating that infrastructure barrier so then you can really start using containers to their full benefit, whether it's in Skytap cloud, in another cloud, or both. >> So, just to follow up a little bit. So it's not just some services like, I don't know, you've gotta have authentication, and you've gotta have storage, and you've gotta have all the things that an old legacy application, sitting in a data center, expects. But it sounds like, also, there's operational services as well and being able to operate with that kind of cloud-level agility? >> Yeah, what we provide with Skytap is, you know, we have a concept of a Skytap environment and so within that environment, you can have your traditional X86, sort of, VMware-based workloads. We also support IBM power systems. So we're the only cloud that can run AIX workloads and Linux on power and so alongside that, what we get is sort of the combination of being able to bring in containers as well and so as organizations go through that modernization journey, being able to receive or see value in the hybrid applications, sort of, along the way. >> We saw a lot of stats, thanks Lucas, this morning I think one of the first ones that I saw was in the press release that Docker released which was, this morning, 85% of enterprise organizations are running a multi-cloud strategy, so that's pretty pervasive. We're also seeing stats like, up to 90%, we had Scott Johnston on earlier, their Chief Product Officer, up to 90% of enterprises are spending, sorry. Enterprises are spending up to 90% of their IT budgets just keeping the lights on for traditional applications. As you said, lift and shift isn't practical for a number of reasons. You also talked about, you know, skill-set changes there. So I'm curious, what are some of the, kind of, common challenges you're seeing in the customer environment where they might be trepidatious to go to the container journey and how specifically does Skytap and Docker knock those out of the park? >> Yeah, well those stats, I think, are really indicative of the challenge and then the new approaches that companies are trying to take to solve that challenge which is, you have so much invested in what's made your company successful, and if you're a long-standing enterprise doing well on your market, you've been doing this for 10, 15, 20, maybe more, years and you've done very well to get yourself to where you are. You've invested millions, if not billions in your infrastructure, your talent, and the people that build the systems that run your business so to burn that all to the ground and start from scratch doesn't make a lot of sense and so, I think, one challenge you run into is inertia, right. It's like "Hey, we did well to get here, "why do we need to suddenly change everything we're doing?" And Skytap's recommendation is you don't need to change everything, but you do need to prepare to be able to change much more rapidly as our economy continues to be more driven by digital technique. So you have inertia as a challenge. I think you also have that idea that if you're spending 90%, as you said, right, of what you just got with the lights on, where's the money and where's the time gonna come for net new and how can you bring those two together? And so that's really where I think Skytap would play a big role is bridging that gap from where you are today, allowing you to leverage the people that you have, the skills that they have, the technology that you have invested in. So you don't have to throw that all out overnight. And instead you can get more and more value out of it as you bring it into the cloud, gain incremental agility, and then, over time, make the modernization and evolutionary changes you want to make based on business needs, not having technology drive what your business does. >> How much of that is a cultural change that you guys can help companies understand is essential? Because culture, change in culture is obviously, especially with large enterprises, they can't pivot that quickly, but culture is essential for a company to successfully undergo digital transformation. I'm just wondering, what kind of conversations are you seeing with that inertia? How much of it is culture needs to change and mindsets to embrace, you know, moving forward? >> Yeah, I mean, we see a lot of this in the conversations we have with customers. We see a lot of it comes out of the market from what analysts sort of have to say as well and I think reasons out of an analyst article that was shared sort of publicly so it talks about, actually, enterprises who have adopted DivOps first are actually more successful in the move to containerization and that's what we see, sort of, with the customers that come to us. And what we're able to provide and what the customers see in Skytap is, actually, the simplicity of the UI that we provide is, actually, a good step from what they currently have without sort of needing to get into what can often be multiple UI's and screens in some of the hyper scale cloud providers. And then on top of that, sort of, the on-demand access to environment so you're taking away, sort of, what is typically a reactive approach from corporate IT when they need to reach out and go, "Hey, I need "another environment or I need another BM like this." And these organizations, it's often taking maybe six to eight weeks to get those environments turned around. We can provision a complex environment in less than, sort of, 30 seconds in Skytap. So it enables those teams to be a lot more productive in what they're doing. And there's sort of the first phase of deciding to sort of adopt the changing culture before sort of even getting into that move from, sort of, after linking in with legacy applications, you've gotta waterfall SDLC, and so actually moving from there into, sort of, more agile approaches and looking at how you can increase release cadence and what, sort of, comes into that from a people aspect, and a process change, and a methodology, and how Skytap, sort of, supports that along with integration with other third party's automation tools as well. >> Yeah, I think you nailed it on the culture point and I just wanted to not forget about people as being a big part of culture, right? And you have, fear is a very real thing, right? Fear of change, fear of net new. And so in our own adoption of Docker, and containers, and kubernetes internally. SO our cloud runs on a very large kubernetes cluster of containerized services so internally, over the last few years, we went through our own modernization journey. And I think that, paired with some research we've seen, we recently did a study with 451 Research looking at what enterprise tech leaders are experiencing. The fear of change, the reticence to change, and then just the lack of knowledge of, "Okay, what is required of me?" Like, "You're asking me to change overnight. "All of a sudden I have to take classes at night "while I do my day job." I think these are really, very realistic and human questions to ask and I think you need to take that into account when you're looking at digital transformation, modernization, so thinking about, "Hey, how do we communicate, "with transparency, what we expect and the time frame?" Let's be upfront about the challenges we expect to run into and where we're gonna have problems and how we'll deal with those together. And make sure the communication is crisp, and clear, and consistent, so that people at least know what's going on, even if they may not like it upfront. >> Well, Lucas, you brought up kubernetes and containers, right? We're here at DockerCon, so, obviously, containers on the tip of everybody's tongue. But you also work with legacy apps, which traditionally, I suppose at this point, traditional means a VM. So how does that go together? What are you looking at your customers? Are they able to transition to more containerized infrastructure? Are they sticking with VMs? I mean, how do modern containers fit into the Skytap platform here? >> Yeah, I think we're seeing a lot of adoption with our customers who are moving into Skytap with their traditional applications and we continue to, sort of, learn and observe what they're doing. For us, there's two types of customers that move to Skytap. The first of those are really looking to migrate their whole data center or evacuate the data centers going, "Where can I put these legacy applications?" You know, there's not many places they can sort of go and so they move them into Skytap, get them up and running in there, and sort of see some benefits in that. And then, almost organically, start to look at going, well how else can I make, or get my team to be sort of more cloud-native or cloud reading. It's sort of an evolution of the people component we were talking about before and sort of going, all right, well as I get my teams more ready for cloud native, they start to sort of move towards containers and cloud native services. For our, sort of, other organizations that come in are those who already know and probably have already experienced, you know, other cloud, sort of, modernizations and are looking at what have they been able to achieve and what do they learn from that. And seen the value in actually Skytap and actually come to us with the approach of going, "Right, we want to come in here. "We want to move to more agile sort of methods. "We want to, sort of, start to take our traditional "monolithic applications, break it down "into into microservices, and move it into containers." >> I'm curious. One of the things that Steve Singh, the CEO of Docker, said this morning during his keynote was, about half the room, there's about five to six thousand people here at DockerCon, their fifth conference, that only about half of them are already on this containerization journey. I'm curious, and I know there's no one-size-fits-all, but when you're talking to customers who are at the preface of going, "All right, we've gotta do this. "This is really an essential component "of our transformation." What's the time frame that they could look to see measurable business impact once they start working with Skytap and Docker on this container journey? >> Yeah, well, I think we've gotta move away collectively as an industry from the idea that there's a Big Bang or silver bullet approach to change, right? I spent the five previous years before joining Skytap last year at a company called Chef Software, competes with Puppet, who's here on the show floor. Automation software. And what I saw there in terms of both DevOps adoption, adoption of automation, and the transition to the cloud, is that if you think you can get everybody full sale on the same amount of change at the same time, to do that effectively in a relatively reasonable amount of time, you're going to not only fail, but by failing, you actually set yourself further back than had you taken a more iterative approach. So I think from a time perspective, I think the first answer is you'll never be done so presume that the journey will continue into perpetuity because continuing to gain agility, continuing to get better at delivering software, to deliver value to customers, I don't see an end to that in any sort of near-term in our economy so I think that's gonna go on for a long time. So digital transformation, modernization, whatever buzz word people may want to use, the idea of evolving and changing is an ongoing process. I think, then, business leaders will say, "Well, that's baloney, I need change now. "I want results." I think, start with a project that has a deadline associated with it, alright? We need to be able to deliver our customer banking app online, via mobile, by January. Okay, well, bite that off singularly and so that you focus on that first, you learn from how you do that process, and then you can take those learnings, communicate them, and pick another project and another project. So we recommend kind of an iterative, progressive approach that will put time and measurable goals around a specific project, meet those deadlines, hopefully, if you're successful, and then give you a lot to learn and operate off of the next time. >> That's great. I'm really kind of curious about looking forward and economic models. You know, everything is as a service at this point. You have a lot of traditional providers, the Dells and HPEs of the world who sell a lot of hardware still and sell a lot of things upfront and they, the analysts and everyone else scratching their heads about how they get to sell more services along with that. Skytap's already there. You're selling your cloud provider, you're selling a service, in some ways you're replacing some of the infrastructure or, you know, an adjunct to it. I'm just kind of curious, going forward, I mean, is this the future of cloud? As a service provider, how do you see the economic model of the DNA of Skytap partnering with people? We've ended up talking about process and people more than we've ended up talking about technology today. Which is kind of fascinating. But is that, project us into the future, what do you all see? >> Yeah, I think what we see today with cloud, and the microservices and container model is really the evolution of what was sort of the virtual data center and developing in sort of VMs. And so sort of going a step beyond that, we're seeing the container model grow and as you rightly pointed out, we talked a lot about people and process and I think that sort of was what's holding back a little of the enterprise adoption today and I think as organizations get into this sort of process and mindset, almost and sort of going, "Hey, things are gonna continue to evolve over time "and our organizations need to be "ready to adopt a lot of these." And this isn't just sort of your development level as well as looking at right, well how does your corporate IT teams, how do your security teams and other parts of the business realize this is gonna continue to evolve really quickly? And I think that's what we're gonna continue to see, sort of up front and it's gonna drive a lot of the adoption of the cloud native services and containers but it's gonna take a bit of time for some organizations to get there. >> Yeah, I have a soapbox, I want to stand on it real quickly. I think cloud is the way forward, right? So no one wants to be in the infrastructure business long-term. So I think regardless of what your deployment model will be, most businesses, five, 10, 15, 20 years from now, I don't see them owning a lot of data center real estate, right? So make the infrastructure someone else's problem. Whether that's Skytap, whether that's AWS, whether that's Azure, or, frankly, whether that's all of us, to your multi-cloud statistic, right? We see the same thing. It's much like the data center was today and has been for a long time. Use the right tool for the right job. You've got a mix of technologies so you're not locked in to any single vendor and you're able to fit technology to your business needs so I think, one, we're going cloud and that's gonna be the way it is. I think, two, is open source, right? I mean, that's where containers gained all their momentum where Docker did a fantastic job of really giving a vibrant community of developers an opportunity to do their work much more easy, much easier and much faster. And so I think you'll continue to see open source play a much larger component in how, even very large, long-standing businesses, develop what they're doing. And then you bring those two together, right? You look at, how can the cloud ecosystem best support open source tools to deliver and develop software that's gonna add value at the end of the day. >> Guys, I wish we had more time. Thank you so much for stopping by and sharing with us what Skytap is doing and how you're enabling customers to not just evolve from a technology standpoint but, I think, as we've all talked about here, really, what might even be more important is evolve the people and the processes. So thanks Lucas, thanks Hamish. Thanks for your time. >> Thank you so much for having us. >> We wanna thank you for watching theCUBE. Again, I'm Lisa Martin with John Troyer from DockerCon 2018. Stick around, we'll be right back with our next guest. (upbeat music)

>> Announcer: Live from Las Vegas, it's theCUBE, covering The VMworld 2017, brought to you by VMware and its ecosystem partner. (techno music) >> Welcome back to theCUBE, we are live in Las Vegas, day three of VMworld 2017. We also have our voices, which is pretty good. I'm Lisa Martin, my co-host for this segment is Peter Burris. Peter and I are joined by a couple of guests. We have Geoff Waters, Vice President of Global Cloud Sales from VMware, first time on theCUBE? >> Yes, yes. >> Good to have you here. >> You know, I'm a big fan, first time here, I'm excited to be here, guys. Thanks for having me. >> Awesome. >> And we have Cube alumni, Roger Frey, VP of Alliances and Business Development from Skytap, welcome back. >> Thank you very much, great to be here. >> So day three, both of you still smiling, that's good, you know, we're kind of close to that happy hour time, almost. So, Geoff, you've been with VMworld 11 years. What is your takeaway from the announcements that VMworld made at the show this year, and what you're hearing from your partners and your customers. >> So, I mean clearly, there's a buzz, there's a buzz again, right? I saw some articles saying there was a lacking of a buzz, but it is here, it's strong. Clearly, Pat knocked it out of the park on the opening keynote, great to see all the logos, customers, and I think our overall cloud strategy. I think it's really come on, and I think it's resonating with customers and partners. >> So, tell us how VMware works with Skytap, Roger, I guess I'll throw that to you. What are you guys doing together, and what's the story there? >> So, Skytap, we're a public cloud provider, and we're focused on enterprise applications, and basically, what we do, is we enable customers to take their on-prem legacy applications, move them to the cloud, modernize them, do parallel processing, add value-added service to them in the cloud, and for us to do that, we rely on VMware technologies that underpin our solutions. >> And what are the key things, just really quickly, that you're hearing from your customers who are using VMware in terms of the value that they're getting from this collaboration? >> I think the biggest thing that we hear from customers is that they need to be more agile, they need to be faster, they need to get to market more quickly. With the framework of VMware and using VMware underneath us, people are comfortable with our solution, they understand how we're going to interact with their application stacks, and it provides for a better solution for our customers. >> Roger, the statement that we are a public cloud provider for traditional applications-- >> Roger: Yes. >> Is a huge statement, there's a lot of implications. Take us through a little bit, how does a customer think through this process, working with you, and then we'll get to the technology choices that make it easier or more difficult? >> Sure. >> So, how does this process work? >> That's a great question, so, when we talk to customers, we're really leading with a business discussion, talking about how are we going to make them more effective? How are we going to make them more agile? How are we going to help them drive revenue or reduce cost? And typically, what we'll see with a customer, is we'll do an inventory of their application environment, so with Skytap, basically, we'll look at your customer's entire application environment from the applications all the way down to the networking, and they'll say, you know what? "Based on our understanding, these are the applications we think that we can migrate to the Cloud, these other applications we think we have to keep on-prem. And we actually come in and say, you know what? These legacy applications that you have that may have been written five, 10, 15 years ago based on networking requirements or hardware requirements. We can actually take that, we can lift it, put it into the Skytap cloud, so we can bring a more complete vision to our customers on their cloud journey, so things that they thought were going to have to stay on-prem, they can actually now take to the cloud and enjoy those efficiencies. >> So identify, do some pattern recognition for us, so identify what are those attributes when you look at a couple of applications, or a set of workloads. What are some of the characteristics that determine whether it's ready for public cloud, or whether it should stay where it is? >> That's a great question, so most public clouds today, they're really geared for net new development, born in the cloud applications, mobile, things like that that we're all very familiar with. Again, if you're a bank, or an insurance company, or a hospital, you've written applications that maybe at one time were specifically dependent on physical MAC addresses, maybe you're putting multiple IP Addresses on physical NICs, maybe you're doing some interesting VPN or tunneling things that you had to develop five, 10, 15 years ago because that's what you had to do, then. A lot of our customers have applications that they don't want to touch, they're running, they're mission critical, and they're absolutely scared to break it, so with Skytap, basically, we can draw a circle around their complete application stack, down to the level two networking layer, take that, put it into a public cloud, and enable those developers to self-service, to make clones, to self-provision, to do whatever work that they need, and then, if they want, integrate that back into their on-prem production environment, or take it to a cloud-based production environment, as well. >> So it sounds as though, and correct me if I'm wrong, but it sounds as though, in many respects, the first thing you're looking at is, okay, you've got these workloads working really well, but you've done things at various hardware levels that could benefit from virtualization. >> Absolutely. >> So in many respects, the first thing you're doing is identifying what about these workloads can be virtualized, and that's part of the lift, which is where VMware comes in, have I got that right? >> Exactly, and that's why VMware is such a great partner of ours, because again, most enterprises today, virtually all enterprises today use VMware, so they're very comfortable with the solution, they understand how we're leveraging the technology, and we can focus on the business discussion, versus spending a lot of time in the technical discussions, trying to see if this is going to work or not. And that's really where we want to focus our energies. >> From a VMware perspective, there's hundreds of thousands of customers out there that have invested in, and everything from vSphere, NSX, vSAN, giving them the opportunity for another incredible cloud partner, you know, it was fantastic for us. We're seeing things like burstability, I mean, our hearts and thoughts are in Houston, with the big storm, but things like that will have a big impact on companies, on insurance companies, for instance, there's going to be a huge burst. So things like that, data center extensibility, consolidation, DR, these are the sort of things that they want to be able to tap into their VMware invest. >> Or emergency services is getting a whole bunch of work right now. One of the nice things is it sounds as though a lot of that infrastructure hasn't gone down despite the flooding and I've got to believe there's a whole bunch of IT guys that are doing a lot of God's work right now, to try to make sure that people stay alive. >> Yep. >> Yeah, absolutely. >> So talk to us about the innovation in terms of how VMware and Skytap are sort of working together. Did you see customers bringing you guys together, wanting more flexibility, wanting more advice and guidance on what should we move, what should we virtualize, what should we keep, or what should we move. How have your customers facilitated the innovations that you're achieving together? >> Yeah, maybe, I'll take a first shot at it, and then give it to Roger. So first of all, Skytap's a premier partner of ours in the VMware Cloud Provider Program. So, we're really excited about that, we just announced that today. >> Congratulations. >> Thank you. >> And on-- >> Like getting a scholarship on a football team. (laughing) >> Oh, I thought we said we weren't going to talk sports. >> Peter: Oh, that's right. >> No sports, right. >> No sports. >> Go Patriots. Anyway, you know what this does it allows us from a field level, it allows us to collaborate deeper from a partnership with our core sales team working with Skytap's. The second thing is around joint go-to-market, and messaging, it allows us to do a lot more in the market together. And then thirdly, around innovation, it's not just about the VMware install base, but it's also working with them on different cloud tools, leveraging that, integrated it in all the different technologies across the board. So, that's sort of a three-prong approach when you are one of our top premier partners. >> That's exactly right, it's a technology, it's a marketing, and it's a go-to-market and sales partnership that we have, so we're very happy with it. We're excited about being a premier partner. We've really boned up on our own technical capabilities within Skytap, to be more expert in VMware technologies, and now we want to be able to roll that out into the field with our joint customers. And getting back to your question, from a joint sales perspective, a joint go-to-market perspective, VMware is doing a great job of motivating its own sales force to become more cloud-ready and cloud-friendly, and it's a great fit for what we do. Their sales reps get compensated on Skytap, so it makes for a very good and smooth motion out in the field, which is where we're really all, it's where it matters. >> So Roger, I'm going to admit that I'm a little bit on edge about the word innovation. I've always believed that there's a difference between inventing something, which is an engineering act, and innovating, which is a social act, getting people to do things differently. And partnerships have always been a crucial feature of the computing industry in that innovation front, how you go to market, and especially, how you get businesses to adopt new things faster, more completely, so that they can be more successful. And as we go through this significant transformation, partners have to play another role, and that is they have to feed back to some core technology companies what they're hearing, what is working, what isn't working. How is that part of the relationship working? You as an advocate for customers as VMware evolves its platforms? >> That's a great question. Again, our customers, when we talk to them, they're really looking to get more agile, to be more innovative, to get to revenue sooner. And the things they they're asking from us as a public Cloud provider is self-service, is the ability to set up resources of their own without having to wait for central IT. They're looking to enable their team members across the globe. With Skytap and using VMware technology, we can clone images of our customers' environments, we can ship them globally. So, you may have a team in San Francisco, you may have a team in Seattle, you may have a team in Tokyo. With Skytap, you can send these images or these clones all over. They can be shared, they can be put back together, and a lot of that capability was feedback directly, that we see from our own customers. So, that's how we keep that feedback loop going, and that's the feedback that we give back to VMware. >> Yeah. If I could add to that, VMware is an incredible enterprise software company, we all know that. The last few years, we've been pivoting to develop a products and services for service providers. Part of being in our premier program as a VMware Cloud provider is you're getting access into some of those feedbacks and loops, and giving direct feedback and things, whether it's DR, us productizing products just for these guys for DR, or replication, like VCD. There's other multi-tenant, self-service portals that we're working in collaboration with our top partners. So, those are some of the other sorts of innovation that we're trying to also, beyond just the enterprise, in a service way where they can service the enterprise in the commercial space. >> Excellent, well guys, thank you so much for coming on theCUBE today, and talking with Peter and me about what's going on with VMware and Skytap together. We wish you continued success in your partnership. >> Great, thanks for being here, Lisa. >> Thank you so much. >> Appreciate it, thank you. >> Alright, for Geoff, and Roger, and my co-host Peter Burris, I am Lisa Martin, you've been watching theCUBE, we are again live at Vmworld 2017, continuing coverage day three. Stick around, we'll be right back. (techno music)

(futuristic music) >> Hello and welcome to theCUBE Studios here in Palo Alto, CA I'm John Furrier, co-host of theCUBE and co-founder of Silicon Angle Media, Inc. I'm joined here with Tom Joyce, Cube alumni. Some big news, new role as the CEO of Pensa. Welcome back to the Cube. You've been freelancing out there as an entrepreneur in residence, CEO in residence, you've been on theCUBE commentating. Great to see you. >> Good to see you, too. Thanks for having me back. You know, fully employed. >> Congratulations. You know, finding where you land is really critical. I've talked to a lot of friends, and they want to get a good fit in a gig, they want to have a good team to work with it's a cultural issue, but also you want to sink your teeth into something good, so you found Pensa. You're the CEO now of the company and you've got some news which we'll get to in a minute, but what's going on? Why the change, why these guys? >> You know, last time we talked, last time I was in here, I was running a consulting business, and I did that for almost a year so that I could look at a lot of options and you know, kind of reset my understanding of where the industry is and where the problems are. And it was good to do that. These were some of the best people that I met, and I got interested in what they were doing. They're smart, technical people, I wanted to work with them It was a good fit in terms of skills because when I joined Pensa just a couple of months ago now they were all technical people, and they'd been heads-down developing core technology and some early product stuff for almost three years. So they needed somebody like me to come in and help them get to the next level and it was a really good fit. And the other thing is, frankly, in my last job I was running an IT shop and I also had a thousand people out there selling, and about 300 pre-sales people, and when I saw this, I saw a product that I could've used in both of those areas. So sometimes when you resonate with something like that you start to think well geeze, this is something that I could, that a lot of people are going to need. And so there are many aspects of the technology that are interesting, but ultimately, I saw that this is a useful thing that I could go make a big business out of. So that's why I did it. >> You've had a great career, you know we know each other going way back, EMC days, and certainly at HP, even during the corporate developments work that Meg Whitman was doing at HP but involved in a lot of M&A activities, so you seen the landscape, you are talking about all the VCs, and all the conversations we've talked about in the past on other interviews you can check it out on YouTube, Tom Joyce, if you're interested in checking those conversations out. Worth looking at. So you landed at Pensa. What do they do? What was the itch for you? What was the, why are they relavant? What do they doing? >> Well, the first thing is, the company was founded about three years ago by people that had hardcore experience in big networking and virtualization environments. And they've been tackling some of the hardest problems in virtual infrastructure as you move from the hardware to everything being virtualized on multiple clouds. These guys were tackling the scale problem. And they'd also drilled down into how to make this work in the largest network environments in the world. So they had gotten business out of one of the largest service providers in the world as their first customer. So you look at that, and you say, alright these are smart people. And they're focusing on hard problems and there's a lot of, a lot of longevity in the technology that they're going out and building. And basically, what they're trying to do is help customers go to the next level with all software-based or software-defined, if you will, infrastructure, so that you can take technology from a whole bunch of different sources. It's going to be VMware, OpenStack, DevOps, the DevOps Stack as well as the whole constellation of people in the security industry. How do you make all those software parts work together at scale, with the people that you have? Rather than going out an hiring a whole new IT staff to plug all this stuff together and hope it works, these guys wanted to solve that. So it's without a lot of expertise, this product can go design, validate that it works, build and deploy complete software-defined environments, and it can do it faster than you could do it any other way that I'm aware of, and I've been around this industry for a long time. So that's what I saw when I said, geeze, I could have used this before, I could have used it in my own IT where our exposures were things like we had all this old software that we needed to update and we're scared to touch any of it, right? You look at things like Equifax. I was exposed in the Equifax breach, and that was exactly that scenario. >> Yeah, and they had four months in there playing around. Who knows what they got? >> To be honest with you, in my business we were doing the same thing because we weren't comfortable with upgrading our software cause we couldn't validate that it worked. How do you move from the old stuff to VMware six-dot-five and make sure nothing else breaks? We're kind of in the era of needing machine learning, intelligent technologies, autonomous kinds of ways to deploy this stuff, cause you can't hire enough smart people to go do it. And that's what I saw. >> Well, we'll do a breakdown or a tear-down, however you want to look at it, of the company in a second, but you guys have some news. Let's get to the news. What's the big news that you're sharing today? >> Okay, great. Well, there's a couple of key parts of it. First, we're formally launching the company. We've been heads down in development and I've been there for a few months, but the company hasn't been launched. So we're doing that, we're introducing Pensa to the world and the new website is Pensa.ai. The second thing is we've completed our Series A financing so we've got the financing under our belt. Third thing is we've been hiring a team. We've brought in certainly me, I've brought in a fella named Jim Chapel as the VP of marketing, long-time industry guy in both large and small software companies. And we're rolling out the first product. So the technology is called-- >> In terms of shipping? >> Yeah, it's going to be shipping as a SaaS offering and it's available now. It's built on our technology which is called Maestro, which is this smart machine, and the first offering is called Pensa Lab. And I can describe to you what it's used for, but it's for helping people go figure out how do I design, build, run, try new scenarios, and roll out stuff that's actually going to work and do it a lot faster than people can do with traditional technologies. >> Congratulations for launching the company, congratulations on the new role, great job. I'm looking forward to seeing you, But let's get into company, Pensa. >> Alright. >> So let's just go in market you guys are targeting. Take a minute to go into the market. What's the market, what's going on in the market, what trends, what's the bet in the market for you guys? >> With a early company like this, there's always a lot of things you can do and the battle is figuring out what is the first thing we're going to do? So I think over time we're going to be relevant to a lot of people, the first customers we're going to be focusing on are people in IT that are trying to manage complex virtualized networks. So a lot of them are people using VMware today. >> So the category is virtualization cloud? What's the category? >> It's a SaaS product for design, build, run. So it's really designing autonomous IT systems that are built on software-defined environments. So it's VMware, OpenStack, DevOps stack, and being able to kind of bring all those parts together in a way that from an operational standpoint you can deploy quickly. In the first version of the product is going to be designed for test in depth. And next year, we intend to bring out production versions of it, but virtually every one of these folks has environments for test today to figure out alright, I want to go do my update, my upgrade, my change I want to try a different security policy, cause I've got a hack happening and I want to do that fast, we're going to go after that. The other side of it is folks in the vendor community. Almost anybody that's selling a solution, again, like me and the job that I used to have, has people out there doing proofs of concept, demos, building systems for customers. And what we can do is give you the ability to spin up complete working environments and do it (snaps finger) basically like that. If you got a call this afternoon to go show VMware NSX running with some customer application with some other technology from a third we can make that work for you, and then you can tear it down and do the next one at four o'clock in the afternoon. >> So that a VMware customer-based you're targeting, I mean, it sounds like, and clarify if I don't get this right, you don't really care if it's private cloud, or hybrid cloud, or public cloud. >> We don't care. No, we don't. And there's a lot of folks-- >> And VMware, is that a target market, VMware buyers? >> Absolutely. Yup. And frankly, we've had people inside of VMware working with us as a number of the beta testers on this and demonstrating that they can spin up their own environments faster, so that kind of proof point is what we're after. Then there's a lot of folks in DevOps, right? DevOps is one of the hot targets for our business and a lot of businesses and what we see is folks that are focusing on the app development side of DevOps and then they get to the point where they got to call IT and say alright, give me a platform to run my new application on and they get the old answers. So a lot of these folks are looking for the ability to spin up environments very very quickly, with a lot of flexibility where they don't need to be and expert in alright, how's the storage going to work and how do I build a network, right? >> So are you targeting IT and DevOps hybrid, or is it one of the other DevOps developers? >> It's both. >> Okay and you don't care which cloud so you're going to draft off the success that VMware's seeing right now with their cloud strategy with AWS >> Absolutely. I mean look, there's a lot of ways >> Software design is booming. >> We can help those customers figure out how do I do VSAN faster? How do I do NSX faster? How do I set up applications that I can move to AWS faster? It's kind of bringing-- >> So software-defined clouds, software-defined data center, all this is in your wheelhouse. >> Yes, that's exactly right. >> This is what you're targeting. >> And that's the opportunity and the challenge. Again when you're doing a small company, the world is your oyster but you have to kind of focus on the first thing first. So we're going to go in and try to help people that have, are dealing with alright, I need to kind of update my software so that I don't have an Equifax, or I need to fix my security policies, I need an environment like, today that I can use to test that. Or, I want to go from the old VMware to to the new VMware, I got to make sure it works. That's good for the customer, that's good for VMware, it's good for us. >> And the outcome is digital productivity for the developer. >> Absolutely. >> OK, so let's talk about the business, and the business model. So you guys raised some money, can you talk about the amount, or is that confidential? >> It's confidential at this point and we have some additional-- >> Is it bigger than 10 million? Less than 10 million? >> It's been less than 10 million. We're going to go lean and mean, but we're set up to make the run we need to run. >> OK, good I got that out of the way. Employees, how many people do you guys have? What's the strategy? >> Just over 20 now, and we have a few more folks that we're going to be adding. We're going to go fairly lean from here. >> Okay, in terms of business model, you said SaaS Can you just explain a little bit more about thee business model, and then some of the competition that you have? >> Yeah, this product was designed from day one to be a SaaS product, so we're not going to go on-premise software or old models, we're going with a SaaS model for everything we're doing now and everything we intend to do in the future, so the product sits in the cloud, and you can access it basically on demand. We're going to make it very easy for people to get in and give this a try. It's going to be simple pricing, starting at about 15 hundred dollars a month. >> So a little bit of low-cost entry, not freemium, so it's going to some cost to get in, right? Try before you buy, POC, however that goes, right? >> Yeah, it's see a demo, do a trial, give it a shot. I'll give you an example, right. When I was at my last job, I had 300 pre-sales people >> Where's this? >> This was at Dell Software. >> Dell Software, okay, got it. >> Now it's called Quest. They would go out and they'd use cloud-based resources to spin up their demo environment. Well, I'm going to give them, and I'm calling them, by the way, the ability to buy it for a very short amount of money and you're not committed to it forever, you can use it as much as you want. And get the ability to say alright, let's spin up VMware, let's spin up OpenStack, let's spin up F5 Palo Alto Networks whatever security I want, get my app running on that without being an expert in all those parts. >> You can stand up stuff pretty quickly, it's a DevOps ethos but it's about the app and the developer productivity. >> Right. And from a business model standpoint, it's how do I make this really, really easy? Because the more of those folks that use it in this phase, next year, when we get to say alright, let's punch that thing you built into production on your cloud, we'll be ready to go. Our goal is to grab space quickly. >> Talk about competition. >> I think the competition for this part of it this kind of dev test lab spin up scenario, the Pensa lab that I just described, the biggest competition is going to be people that build their own. So in the corner you've got your test environment running on your old hardware, right? So that doesn't come with this automated software capability. The other ones are going to be people like Skytap, as an example, that a lot of people use, and I've used in the past, that gives you a platform to run on, but again, a lot more cost and not the automated software capabilities. So there are a lot of scenarios like that that we can go after, and it's almost universal. Everybody's got a need to have some sort of a test or dev environment, right? And we are going to prove to them that the software is better. >> So not a lot of competition. It's not like there's a zillion players out there. >> No, it's a big target, but there's not a lot of players. And for the most part, you're going to go into scenarios where customers have something they've cobbled together that isn't working as well as they'd like. >> And Pensa AI hints a little bit of a automation piece which is really all our people know in the enterprise. Let's talk about the technology. What's under the hood, is there AI involved, also you've got the domain name .ai, which I love those domain names, by the way, but what's the tech? What's driving the innovation and story differentiation? >> To be honest with you, inside that's something you debate because that's what it is. If AI is a way to use technology, to do things as well or better than people used to do before, that's what it is. And if you take all the hype, and nonsense out of the conversation, you say it's not about SkyNet and computers taking over the world, it's really about doing stuff better than we can do and making people more effective, that's what we have. Now, under AI there's a bunch of different techniques and we're going to be focused on primarily modeling and the core IP of this is how we build the model for all of those components and how they interact and how they behave, and then machine learning. How do we apply techniques to actually-- >> So you're writing software that's innovating on technology and configuration, tying that together and then using that instrumentation to make changes and/or adaptive-like capabilities-- >> Exactly, but rather than go spend a month building the template that you're going to go deploy the system will build that for you. And that's where the smarts are. And we'll use machine learning techniques over time to make that model better. So that's kind of where we're digging, and frankly it's a big problem for people. >> So software you're main technology. >> It's 100% a software platform. >> Okay, well, Wikibon Research was going viral at VMworld and I'll make a note cause I think this is important cause automation is our and it's a key point of your thing is that Wikibon showed that about 1.5 billion dollars are going to be taken out of the market as automation takes non-differentiated labor out of the equation, which essentially is stacking servers and racking, stacking and racking. That plays right into your trend. >> That's exactly what we're doing. And what we want to do is-- >> By the way that value shifts, too, all the parts. >> Yeah, and I think we're trying to focus-- automation isn't new. It's not new in IT. Certainly there's been a lot of focus on it the last 10 years. The question is how do you make the automation smarter? So you don't have to do the design and say push play. Cause the problem with automation in these really complicated microservices, multi-- the problem is, if you automate it, if you build that template wrong, you can make the same mistake a thousand times in a row. And I've had products in the past where they've worked great as long as that template was correct. Well what if the template changes? What if I need to put new security policies in there, changes? Maestro is going to build it for you. That's what the story is all about. >> That's your product, that's your product name. >> Yep. >> Well, that's what DevOps is all about. Programming the infrastructure, and that's always going to change. So that's really the DevOps ethos. >> Yeah, and that's why if you expand out from the first play run, this test dev scenario, well, frankly, we'll learn a lot. We'll learn a ton about different patterns that we see, we'll learn a lot about the Interop environment that customers want, I want you to add this or add that, the system is going to get smarter to the point where when we punch it into production, it's going to know a lot more than it does today. >> Well congratulations on the launch. My final question for you is really the most important one which is, if I'm a customer, why do I care? What's in it for me? What's the value? Why should I pay attention to Pensa.ai? What's going on, what's the value to me, why should I care, why should I call you? Gimme that bottom line. >> It's about risk reduction. It's about making sure that the things you need to change you can actually do it without it blowing up in your face. And it's also, frankly, the other side of the AI-- >> What, the infrastructure blowing up in my face? Or just apps? >> If you make changes to your environment and you're not sure if they're going to work, but you know, again, take the Equifax thing. If they had made those changes and put them into their environment, it wouldn't be on the front page of every newspaper in the world. Frankly, my information wouldn't have been hacked. >> What would you guys have done if I was Equifax and I knew that potentially I had to move fast? How could you guys solve that problem? >> If you have a problem, upgrade the software today. And what we would've done is give them the ability-- >> Do you think they knew they had a problem? >> Uh... I don't know if they did or not, but you can see this scenario over and over and over again in other companies, where they say, we know we need to do an update, but we're not doing it. We're going to wait for the six months-- >> Cause it breaks stuff. >> Cause we're scared. >> Scared, or that it breaks stuff, or both? >> It breaks stuff and we need to test it, right? So we're going to bring test velocity into that, we're going to bring intelligence to make sure the design is right, right? So that you can do it more quickly. In many different scenarios. >> It's interesting in the old days, it was like, patch management was a big thing, that was the on-premise software, but with DevOps, you need, essentially, test and dev all the time on? >> You do. If you're developing these applications with DevOps in the front end, and you're dropping new versions of 'em in hours, rather than quarters, the infrastructure in the back end has to kind of speed up to DevOps speed. And that's where we're going to focus our attention. >> Alright, here's the hard question for you and we'll end the segment, is when does a customer, your potential customer, know they need you? What's the environment look like? What's the pain points? What are the signals that they need to be calling Pensa.ai? What's the deal there? >> Yeah, I think we're going to talk to the DevOps people that are looking to get their applications out and get them built and deployed-- >> So, need for application pushing, that's one. >> That's one. The other ones are going to be folks inside any IT organization that need better velocity, need to be able to test one and take money, cost out of it, cause we're going to do it for a lot less than what it costs you to do now. And the third one is the vendor community. Folks out there selling software. VARs, pre-solicit people. >> So I guess the question is more specific. What is the signs inside the customer that make them want to call you? Stuff's breaking, upgrades not happening fast enough, I'm trying to get to the heart of it. If I'm a customer-- >> On the IT customer side, it's all about velocity. We need to push our apps faster, we need infrastructure faster, we need to test security policies faster, we're not going fast enough-- >> So basically if you're going slow, not getting the job done, they call you. >> Pretty much, that's our guys. >> Tom, congratulations on the launch, congratulations on the new CEO job, we'll be tracking you guys. Series A funding, congratulations, who's the VC involved? >> We have The Fabric, which was the seed funding source, and then March Capital has been very helpful to us in this A round. >> Great, well they got a great pro in you as CEO. We'll keep in touch. Cube alumni, good friend Tom Joyce here inside theCUBE Studios on the conversation around the launch of the company, Series A funding, new team members, and Pensa.ai. This is theCUBED. Cubed.net is our URL, check it out. Siliconangle.com and wikibon.com is where you can go check out our stuff. I'm John Furrier, thanks for watching. (futuristic music)

>> Announcer: Live from Las Vegas. It's theCUBE covering VMworld 2017, brought to you by VMware and its ecosystem partners. >> Okay, welcome back, everyone. Live here at VMworld 2017 day three wrap-up. We're going to wrap up the whole show. I'm John Furrier with Dave Vellante, Stu Miniman, Keith Townsend. Cube, set, two sets of coverage. Guys, great job, we have Justin Warren as well, John Troyer, Lisa Martin. Great team, guys, amazing. Three days, a lot of content, wall-to-wall coverage. Double barrel shotgun of Cube content. Amazing. What's left in the tank? Let's get this done. Dave, your thoughts as VMworld comes down to a close. >> Well, so I missed VMworld last year as you know, 'cause I was doing another show. Pat was giving me a lot of grief for that. But if I go back two years ago, two years ago VMware was shrinking. Its license revenue was in decline. Its cloud strategy was in continued disarray. Customers were kind of, you know, losing a lot of faith. >> John: Ecosystem was in turmoil. >> And the world thought that Amazon was going to completely destroy this company. Fast forward two years later, license growth, you know, 12-13%, the company's growing. It's nearly eight billion dollars, three billion dollars of operating cash, big stock buybacks, clarity on the cloud and, I think, and I'd love for Keith's opinion on this, a recognition of the customers that "I can't just throw everything in the cloud." Okay, that's one thing, but what I can do is try to bring the cloud model to my data, and AW, I mean Amazon, sorry, VMware is going to be a partner in doing that. And I think those have all been tailwinds along with some product cycles and some >> John: And Dell Technologies buying out from the federation which was taking on water. Let's not forget. Let's not forget about the federation EMC owned VMware and that was bought by Dell. >> People talk about the Dell discount. I'm not seeing the Dell discount right now. >> What is a Dell discount? What does that mean? >> The Dell discount is because Dell owns VMware, just like when EMC owned VMware, it somehow shackles them and depresses the value. Michael obviously doesn't agree. >> So product focus as well has been not diminished at all. The products are front and center. They still got the sessions. Guys, on the product side, what's your view? >> Strong product offering. I really love the message they want. A lot of the response from the community was like, "Pat is feeling energized." He has this shadow of what is going to happen post-acquisition. Is there going to be a Dell discount? You know what? VMware, you know, famously, five years ago, Pat was onstage. He said he's going to double down on virtualization. He jettisoned Pivotal, and we were all wondering, "What is he doing?" Proved over the long run he was right. Last year, this year, he's doubled down, not on just virtualization, but on this concept of SDDC. And it's finally starting to pay off. We're seeing consistently this concept of VCF. VMware cloud foundation on premises, off prem, and even in AWS, ironically. You know, three or four years ago, we were like, well, is OpenStack going to eat VMware's lunch? VMware has turned the tables and become that OpenStack layer, that consistent cloud layer, at least for that legacy type of way to do IT. Taking your internal data center processes and moving them to the cloud consistently across their vCAN network in the AWS. >> So if I get this right, you're basically saying that VMware essentially went from a position where they're twisting in the wind at all levels, turmoil in every department, every, house is on fire, to pulling one major bold bet, grab it out of the hat, kicking ass, taking names, Pat Gelsinger and team made good calls. >> You know what, I'm not a fan of calling what VMware's SDDC thing a private cloud. I don't think it's true private cloud. It is valuable to the infrastructure, but it's not private cloud, but customers love the message. Take what I'm doing now, check an easy box, move it into AWS or vCAN and it's resonating. >> Well certainly, Stu just gave you the eye dagger, 'cause Stu, the true private cloud report from Wikibon, which has been going viral at the show, been the talk of the show, everyone has been talking about it, Wikibon's true private cloud report. People love that, too, because the message is simple, take care of business at home, called the on prem. Yeah, change the operating model, that's going to take some time. >> So, my thought on this is, for years, we were talking about the stack wars. Lately, we've been talking about the cloud wars, and for the last few years, when I talked to the partner ecosystem, they were shrinking their booths. They were looking for alternatives. Remember Cisco? Aw geez, flaying anything but VMware. Let's see if we can do this. You know, IBM who was a big VMware partner. Well, they got rid of X86. Where are they going to part with VMware? On and on, HPE going closer with Microsoft. Even Dell, pre-acquisition, how much deeper they going to go with Microsoft? Now, you know, John, we've been talking on theCUBE for a while. You know, there's Microsoft. Their stack, their partnerships, their application, where they're putting it. Amazon, huge elephant in the room, when they made the deal it was like, oh well, you know, Pat's on his way out the door, and he's kind of, you know, pulling one over on Dell before he leaves. Now, I think we understand a little bit better where this fits in that portfolio of the Dell family. Open source, still something we beat on Pat and EMC before that. They're not really open source. They've got a proprietary software alternative that their partners seem excited about. They've really fumbled around with their cloud strategy for a year. They've got one that seems to be going well. We'll see, 4,500 service provider partners, the Amazon thing. We will still see where revenue comes. >> Stu, that's a good point. Pat Gelsinger was kicking ass as a CEO now, but his channels on his job many times, so props to Pat. He made some good calls, stayed on course, held the line on the direction, did not cave at all, him and his team, they did it. There's been some turnover as we know in VMware. I'll see the results. I'll clear the scoreboard. They're winning. Question I'll put to you guys right now. Impact of Andy Jassy from AWS here on day one. How much of an impact was that? He made some statements. And the question I want to ask you, in addition to the impact, is he said, "This is not an optical deal." Most companies make optical illusional deals, make it look like they're all in, and they don't really deliver. So one, impact of Jassy being here and two, who was he talking about? >> Dave: Well >> Where's the Barney deal? >> Well, so okay, first thing is I saw, I've always seen that AWS deal from Andy Jassy's perspective as TAM expansion. Big part of a CEO's job is, I've got to expand my TAM, especially when you see the growth of AWS, and it's slowing down a little bit, even though it's still impressive. He's got to expand his TAM. Well, how does AWS do that? Look to 500,000 VMware customers. So that's number one. Barney deal? There are a lot of Barney deals out there. I mean, most... >> What are you referring to, 'cause Google came on the stage the next day. I was getting tweets saying "Azure?" Stu, guys, who's the deal? Who was Andy Jassy talking about when he was looking at the VMware customers saying, essentially, this is not, implying others are? >> I'm not sure that he was necessarily throwing shade at anyone specifically. What there was is there was 18 months from when this deal went through, a lot of work. This was a lot of engineering work. Talk to the cloud foundation team, talk to the VSAN team. The amount of work to actually integrate, because we know Amazon actually has an extensive engineering team. They hyper-optimize what they're doing, so this is not some white box that I just slapped VMware on and said the BIOS, you know, it works and everything where I still am a little concerned if I'm, you know, a VMware employee as customers, I talked to some customers that really excited about this, the Lighthouse customers. They say it's going to get my team that loves their vCenter. They love everything, it's going to help them move faster. Then, you're talking to, "Oh there's these services they're going to be able to use." I'm like well, how much are they going to realize oh hey, this is great, and the VMware sales reps are just going to get eaten by the lion while the customer goes off. >> And so the impact's big then, you're saying, but you won't answer the question of who he's referring to. You don't think he's referring to anyone. Keith, what do you think? >> Let's look at, I like the comment about how difficult the integration was. Last year when I read, it said something like, wait, hold on what, the AWS, who is notorious about controlling their message, what I thought was funny is that Andy didn't use the term private cloud, he didn't use the term VMware cloud, he, VMware infrastructure and AWS, which is a massive engineering effort. So from that, I question whether or not they could execute upon that, but Andy Jassy being onstage on Monday showed the commitment that we're going to make these other services work, the total addressable market of 500,000 additional customers. You don't do this for bare metal servers. >> John: VMware has 500,000 customers? >> Yeah. That's the total addressable market, but that's not where AWS is going to grow by halting physical servers, by selling more Lambda, selling more CDN, selling more PAS, is the key, and where VMware and AWS relationship his weak is in that true integration between the two hybrid IT environments. So when you say, "Where's the barney deals?" the barney deals are, I think it's across the industry. Unless you're getting fully in bed and committed to make that level of investment >> No but engineering resources, this comes back down to what, the new kind of engagement between biz dev deals look like. You need to have that kind of level. >> I have no problem pointing to the Nutanix Google deal, anything that people are doing with Azure, no one's partnered at this level. >> Okay, Azure is a good one too, because I've heard from startups that have been enticed by the dollars, 'cause Microsoft's been sprinkling some cash on, who have left to go back to AWS, because of technical reasons, reverse proxies, basically software clued just to basically make stuff work. >> Well, so, where do we, how much do we know about the IBM VMware relationship? Because I mean IBM's >> Pat brought it up today. >> Soft layer hosting, right? They've got a lot more experience with VMware, IBM has said, I think they're shipping, they've been shipping for quite some time. So there's an example of engineering that had already largely been done, that's actually delivering value for customers. Pat probably brought it up because it's a great distribution channel for him. And I think Keith's right on. AWS doesn't speak in terms of VMs. They talk in terms of cloud services, like Lambda, database services, middleware, PAS layers, that's really where they're going to hook people in this community into their platform. >> Okay, so here's a question to end the segment as we wrap up the show, because this is kind of where it's all going. To me, my big epiphany was the following. Andy Jassy, statesman, Harvard MBA, now CEO of AWS, ticking names, ticking this, huge accomplishments, he's done great in his career, he's only getting better. And then Sam Ramji, great developer chops, knows software ecosystems, not Andy Jassy in terms of the title, but in terms of status, still a solid guy. Two contrasting positions, running the biggest cloud today, to Google brainpower, okay? So you're looking at that and you're saying, "Hmm, where is this going to go?" So the question on the table is, what does it take for someone to be successful in today's IT environment? Does IT need to be smarter in business or does need to be more smarter in IT, or both, and does Google have enough IQ in IT to actually make the products fast enough or are they at risk? >> Well I'll take the customer point of view, and you know, we always talk about people, process, technology. The technology is maturing, and it's maturing pretty quickly, but maybe still not quite to the point where the true private cloud vision is where we need it to be, but what's going to slow that down is the people and process side is going to take a lot longer. Stu, you made a comment yesterday, VMware's moving at the pace of the CIO. >> It's Keith's line, he's been using all week. >> Okay, great line and Robin Matlock heard that today, course marketing CMO said, "And the CIO needs to move faster." (men laugh) Well guess what? They can't. I thought that was just a perfect testament >> But that is exactly the dilemma isn't it? >> It really is, and this stuff is hard. And cloud doesn't necessarily make it any easier, (laughs) if anything, it makes it more complex, 'cause it's a completely new business model. >> But remember the old term, forklift upgrade? Okay, you don't have forklift upgrades anymore, you have rip and replace, whatever word you want to use. >> Stu: Now we have lift and shift. >> Lift and shift, rip and replace, lift and shift. Is Google, and this is my challenge to Sam, I didn't have time to ask him this question, I'll certainly do one on one next time I see him. Is Google smart enough with IQ in IT, certainly we know they're smart enough, but do they have enough IQ in IT to really make the transformation, or are they betting on a rip and replace version of a cloud? >> So John, no doubt Google's smart, and they built amazing things that, the ripple that Google has through the industry is phenomenal. They spin off whole industries based on what they're doing. Google played a very different game than Amazon is, you know, when you talk to customers and how they're first getting onto Google, you know, data's really important, analytics of course. Couple of years ago Google was saying, "Oh, we're just going to be that data analytics cloud," now of course they're trying to be a big player. Amazon, the company, remember, Amazon isn't just AWS. Andy Jassy fits into Jeff Bazer's great plans. You know, I'd love to hear, when we go to reinvent, what's happening in Whole Foods that's impacted by AWS. They are everywhere, they are, you know, Walmart did. >> How about TAM expansion, my wife's checking Amazon even more. >> But this is really interesting right, because Walmart's now using its muscle to say, "Hey, you going to do business "with AWS" >> Absolutely >> "And Whole Foods? "You're not doing business with us." So the point being that digital business is allowing companies to traverse industries and now you're seeing it in really interesting competitive lashbacks. >> So Capital One was onstage, I say something that over the past couple of years been controversial, no one believes me, but I believe this is what needs to happen. Capital One claimed that it's a technology company, they're not a bank. Well I want to bank with a bank, that' a whole 'nother conversation. But technology is just a tool to get your job done, and just like we had bookkeepers that knew Excel and then eventually Excel just became a part of your toolkit. AI, I talked to Chuck Hollis of Oracle about this on the podcast the other day. AI is just going to be a business toolkit that a business user uses. To the question, business users will become smarter at using technology. The cloud providers that enables the business user to have the least amount of friction to use that technology, to solve business challenges will win. The question is, is that Google or Andy Jassy, who has done it with Amazon, or some other cloud provider that's eating their own dog food. >> Okay guys, let's wrap this up. Let's go around the table, one word, two words, how do you wrap up VMware's position vis a vis as they go forward? >> VMware's on fire, I think the data center's on fire, the ecosystem is reforming around the cloud. And there's a lot of momentum right now, I mean I'm wondering, okay, what's going to happen to derail this, but right now the fundamentals look very good. >> Relevant, John. >> Yeah. >> Cool and relevant again. It's right, you know, cool, we can all argue, you know, look, I like what I heard with Amazon, it was better than I was expecting coming in. You know, getting in there, they talked about serverless, they talked about edge computing, something I actually had a couple really good conversations ticking to, partners doing IoT, and customers looking at that. If they can be relevant, not just in the data center, but in the cloud, and even at the edge, VMware's going to have a good life going forward. >> Yeah, and I'll wrap it up, you stole my word relevant, so I'll say, I'll a little bit further than relevant, VMware is still the leader in enterprise infrastructure software. They're not letting that lead go. >> But just on that, the last thing, they're an infrastructure software company. I think they showed how they can be more than that in the future. >> And my take is, smart strategy playing out, now people are starting to realize the long game that Pat's been playing. It's showing up in the financial results, and there's clarity, and you can see the game playing out, you're starting to see there where they're going to position, so good job, guys, that's a wrap. Want to thank our sponsors. Without sponsors theCUBE would not be able to come for the three days of wall-to-wall coverage provided to the community. 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