our Studios in the heart of Silicon Valley Palo Alto California this is a cute conversation hello everyone welcome to the special cube conversation with a remote guest Steve Herod managing director of general kennel s he's a venture capitalist former CTO of VMware cube alumni Steve welcome to this special cube conversation coming in remote from Palo Alto you're right across town but still we're gonna grab you big news happening and also get your thoughts on the Emerald 2019 welcome to our remote conversation yeah hey Jon yeah we're close and yet this makes it even more convenient go we'd love the new format of bring people into no matter where they are no matter what whatever it takes to get the stories we want to do that and and two important ones to having we we know vm world's coming next week but congratulations in order to you and your portfolio companies signal FX another cube alumni firm we've been covering since the beginning of their funding acquisition by Splunk today for over a billion dollars sixty percent in cash and forty percent in stop congratulations you've been on the board you've known these guys from VMware quite a team quite an exit it's a win-win for those guys congratulations yeah great group of guys several of which were at VMware has you as you mentioned and as you've had on your show that's great they were doing a really good job of monitoring and getting metrics about applications and how they're doing it and they're marrying it with spunks ability to ingest logs and really understand operational data and I think the combination will be very powerful it brings kind of what we've been monitoring cloud 2.0 essentially monitoring 2.0 is really observability as the world starts moving into the the kinds of services we're seeing with cloud and on-premises operations more than ever that game has changes much more dynamic and the security impact is significant and certainly as applications connect whether it's IOT or any IP device having that data at scale is really a critical part of that and I know signal FX was one of those companies where you invested early and I remember interview them a couple years ago and saying damn these guys might be too early I mean they're so smart they're so on it but this is an example of skating to where the as Wayne Gretzky would say these guys were just hitting their stride Steve can you can you share any color commentary on on the deal and or you know why this is so important well they've been at this for a long time and they're a great team I've been involved as an investor less time obviously but yeah it was the really original team out of Facebook monitoring really at scale applications and then trying to take that technology that Facebook could use and applied it to our world and you know as you discovered we're in a world of micro services and containers and that is definitely hitting its stride right now and so they were in the right place knowing how to monitor this very fast moving information and and make some sense out of it so yeah really good job on their part and it was a pleasure to be along for part of the ride with them it's great to meet great founders that have a vision and stay the course because you know it's always tricky when you're early to see the future especially around ok we're talking micro services and containers way back before it became the rage and now more relevant operationally for enterprises it's easy to get distracted and it's fashion well just jump on this trend or this wave they stayed the course they stayed the nose to the grindstone and now observability which to me is code word for monitoring 2.0 is probably one of the hottest segments you saw companies going public companies filing the pager Duty dynaTrace now the you guys with your acquisition with signal FX this is an important sector this would normally be viewed in the IT world as kind of lists of white space but it seems to be a much bigger landscape can you comment on your view on this and why it's so important why is observability so hot Steve well it's been this actually been a great market to be in for quite a while they've been a large number of companies continuing to be both built up and it's pretty simple the amount of e-commerce or the amount of customer interactions you're having over applications and over the web has gone up and so anything is not performing well or house downtime literally cost you a lot of money as a company and so as these applications get more complex and they're being relied on more for revenue and for customer interactions you know simply you have to have better tools and that's gonna be something that continues to evolve we have more complex apps and more commerce is going to go through them complexity is obviously something that people a lot of people are talking about I want to ask you something around today's marketplace but I want you to compare and contrast it similarly to what your experience was at VMware when you the CTO you know virtualization evolved very very quickly and ended up becoming a really critical component of the infrastructure and a lot of people were pooh-poohing that initially at first and then all the sudden became we got to kill VMware and you know so the resiliency of VMware was such that they continued to innovate on virtualization and so that's been you know part of the legacy of VMware and VM roads will cover next next week but when you look at what's happening now with cloud computing and now some of the hybrid cloud opportunities with micro services and other other cool things the the role of the application is being is important part of the equation it used to be the stand up infrastructure and that would enable the application to do things virtualization kind of changed that game now you don't need to stand up any infrastructure you can just deploy an application then the infrastructure can be code and be self formed so you can have unique requirements as infrastructure driven by the application the whole world seems to have flipped around do you see it that way is that accurate assessment and what's your thoughts on that I think you're right on a bunch of fronts people have been calling it different things but the beauty of VMware and you know this is a while ago now but the reason it was successful is that you didn't have to change any of your software to use it sort of slid in underneath and added value but at the same time applications evolved and so the path of looking like hardware was something that was great for not changing applications you have to think about a little differently when people are taking advantage of new application patterns or new services that are in the cloud and as you build up these as they're called cloud native applications it really is about the infrastructure you know it's job and life as to run applications and it's it sort of felt like the other way around it needs to be you wrote an application for what your infrastructure was it shouldn't be like that anymore it's about what what you need to do to get the job done and so we see the evolution of the clouds and their services that are there certainly the notion of containers and a lot the stuff that VMware is now doing has been focused on those new applications and making sure VMware adds value to them whatever type of application they are it's interesting one of the exciting things in this wave that we're on this year around multi cloud hybrid cloud and public cloud now that we've kind of crossed over to the reality that public cloud has been there done that succeeded I call that cloud 1.0 you saw the emergence of hybrid cloud even early on around 2012-2013 we were talking about that at VMworld you know certainly Pat Kelson here but now you're seeing hybrid cloud validated you got outpost you got Azure stack among other things the reality is if you are cloud native you might not need to have anything on premise like companies like ours with 50 plus people we don't have an IT department but most enterprises have stuff on premise so the the nuance these days is around you know what's the architecture of IT these days when you add security into it's complicated so there's debates can there be a sole cloud for a workload certainly that's been something that we've been covering with the Amazon Jedi contract where it's not necessarily a sole cloud for the entire department of defense it's a sole cloud for the workload the military application workload or app the military it's 10 billion dollar application and it's okay to have one cloud as we would say but yet they're gonna use Microsoft's cloud for other things so the DoD's having a multiple cloud approach multiple environments multiple vendors if you will but you don't have to split the cloud up or say this is kind of one of those conversations really evolving quickly because there's no real school of thought around this other than the old way which was have a multi-vendor environment split two things what's your thoughts on the the workload relationship to the cloud is it okay to have a workload have a single clap for that workload and coexist with other clouds it's funny I've been thinking about this more lately where if you went back earlier in time forgetting cloud there used to be a lot of different type of servers that you could run on whether it be a mainframe or a mini mainframe or UNIX system or a Linux system and to some extent people are choosing what would run where based on the demands of the application sometimes on price sometimes on certifications or even what's been ported to the right one so this is I'm beating myself but you know that's that's a while ago it's not too different to kind of think about the different kind of cloud services are out there whether you're running your own on your own data center or whether you're leveraging one from the other partners I really do think in the ideal world you get your choice of the best possible platform for the application across a variety of characteristics and it's kind of up to the vendors of management software and monitoring software at security software to give you more flexibility to choose where to run and so forgetting VMware exactly but think of a virtualization layer that that really tries to abstract out and let you more fluidly run things on different clouds I do think that's where a lot of the you know the core software is head of these days to really enable that to work better and so a million other use cases with with you know storage being moved around for disaster recovery or for whatever it else might be but that core of flexibility reminds me a lot of you know choosing what application would one run would run where within your own company and the kubernetes trend in container certainly really makes that so much more flexible because you can still run VMware's on the ends beams under the covers or put stuff on bare metal a lot of great opportunities so it's exciting and you slap an API in front of them and and micro-services sort of works in tandem with that so that you you could really have your application composed across multiple environments and I think the observable observability is so hot because it takes what network management was doing in the old way which is monitoring making sure things are operating effectively and combining with data and so when I heard about the acquisition of signal FX into Splunk I'm like there it is we're back to data so observability is really a data challenge and opportunity for using what would be a white space monitoring but it's more than monitoring because it's about the data and the efficacy of that data and how it's being used whether it's for security or whatever your thoughts so there's more data than ever for sure and so being able to stream that in being able to capture it at cost all that is a big part of our you know the environments we all work and the key thing is turning that into some actionable insight and whether you're using you know interesting calculations for that or different forms of machine learning like that's where this really has to go is with all this data coming in do I avoid false false positives how do i only alert people when needed and then that allows you to do what everyone has talked about for 30 years which is automatic remediation but for now let's talk about it is how do i process all of this rich data and give me the right information to take action see we want to thank you for coming on this promote cube conversation you've been with us at the cube since 2010 I think our first cube event was EMC world 2010 that show doesn't exist any longer because that folded into Dell technologies world so VM world next week is the last show standing that has been around since the cube cubes been around of course you guys had the VM worlds had their 10th anniversary I think was 2013 as a show but this is our 10th year I want to thank you for being part of our community and being a contributor with your commentary and your friendship and referral appreciate all that so I gotta ask you looking back over the 10 years since you've been with the cube VMworld what's the most exciting moments what are moments that you can say hey that was an amazing time that was a grind but we got through it funny moments your thoughts yeah boy that's a tough question I've enjoyed you know working with you John and the cube there have been so many really interesting things for me the some of the big acquisitions that we went through at VMware where I think the nsx acquisition when we get nasarah I think that really pushed us in an interesting spot but we had gone through IPOs and acquisition ourselves by EMC and we've gone through some pretty vicious competition from whether it be Citrix or Zin or Microsoft yeah that's just the joy of being at these companies it's lots of ups and downs along the way but they all kind of fit together to make an exciting life what were some moments for you I know you had left was a twenty fifteen or twenty six point eight vs world you go down there yeah about six years what do you miss about VMware the team is what everyone kind of cliche says but it's totally true the chance to kind of work with all those people at the executive staff all the way down to like these awesome engineers with Co ideas so I definitely missed that miss shipping products you don't get to do that as much as a venture capitalist but but on the flip side this is a great world to be and I get to see enthusiastic you know very optimistic founders all day long pushing the envelope and while that was existing at the EM where it's it's what I see every single day here you've been on the cube ten times at vmworld that's the all time spot you're tied but first congratulations on the leaderboard well it's been a great ten years going forward we've seen more so go looking back I would say that you know Palmer it's taking over from Diane Greene really set the table he actually laid out essentially what I think now as a clearly a cloud SAS architecture I think he got that pretty much right again or maybe early in certain spots of what he proposed at that time though some things that didn't materialize as fast but ultimately from a core perspective you guys got that right and then went in try to do the cloud but then and this year it comes in for a software-defined you know line with Amazon and since that time the stock has been really kind of up to the right so you know some key moments there for VMware from small somalia more stuff it's fun to see pivotal now possibly coming back into after after getting started there but I think you know there's there's a hugely talented team of executives there Pat Yeltsin jurors come in and done a great job I think Raghu and all these folks that are in there are good thinkers and so I think you'll consider to continue to see it evolve quite a bit and probably some cool announcements next week talk about the role Raghu and the team played because he doesn't really get a lot of the spotlight he avoids it I know he'd I've talked to him privately he won't come on the qoi let the other guys go on other guys and gals so he's been instrumental he was really critical in multiple deals could you share some insight into his role at VMware VMware and why it's been so important well I'll push them to get on especially now that you have remote you can probably grab him no he and Rajiv and andraia Ferrell just all the guys are I think he and regime basically split up half and half of the products but I know Raghu is very very similar in the whole cloud strategy that has clearly been working well he's good friend in a very smart guy well I want you to give me a personal word that you're gonna give him in a headlock and tell him to come on the cube this year we want him on he's a great great great guest he's certainly knowledgeable going forward Steve 10 years out we still got 10 more years of great change coming if you look at the wave that's coming you're out investing in companies again you had one big exit today with the billion dollar acquisition that was happening by Splunk and signal affects a lot more action you've been investing in security what's your outlook as you look at the next ten years there's a lot more action to happen we seem to be early days in this new modern era historic time in the computer industry has applications of now dictating infrastructure capabilities is still a lot more to do what are you excited about there's there's a million things I get to see everyday which are clearly where the world is headed but I think at the end of the day there's there's infrastructure which the job and life of infrastructure is to run applications and so then you look at applications how are they changing and and what is the underlying fabric gonna need to do to support them and if you look at the future of applications it's clearly some amazing things around artificial intelligence and machine learning to actually make them smarter it's all different factors form factors that they're running on and being displayed on I think we clearly have a world where with the next generation of networking you can do even more at the edge and communicate in a very different way with the backend so I kind of look at all these application patterns and really try to think about what is the change to the underlying clouds and fabrics and compute that's going to be needed to run them I think we have plenty of headroom of interesting ideas ahead stew Dave and I were talks to Dave Stuben they want this too many man died we're talking about you know as infrastructure and cloud get automated as automation comes in new waves are gonna be formed from it what new waves do you see is it's like RPAs a I I mean because as those things get sucked in and they ships in to new waves what are the some of the key ways people should pay attention to I'm not saying the inverse tress is going away but as it becomes automated and as the shift happens the value still is there where is those new waves well I think today it looks like most applications are going to be composed of a lot of services and I think they're gonna be able they're gonna need to be displaying on everything from big screens to small screens to purely as headless api friends and so again I think at the end of the day this this infrastructure is gonna have to have a lot of computation capability have to crunch through tons of data but also have to stitch together these connections between components and provide really good experiences and ability in the network and all those are very hard problems that we've been working on for a while I think we're gonna keep working on them and new forms for the next ten years at least awesome see thanks for being a friend with us in the cube what's your funny favorite moment of the Q can you share any observations about the cube and your experiences your observations over the 10 years we've come a long way you've come a long way actually I've enjoyed it I mean it's a microcosm of all the other stuff going on but I saw your first little box that you built and used for the cube like that was that was really cool but now the fact that I'm on my laptop you know doing this over the network and it's showing up is pretty awesome so I think you're following the same patterns of the other of the other applications moving to the cloud and having good user experience because cube native here software if the male native Steve thank you so much for staying the time commenting on the acquisition I know it's fresh on the press a lot more analysis and cut to come next week it's certainly I'll be co-hosting ATS plunks Kampf later in the year so I'm looking forward to connecting with the team there and again thanks for all your contribution into the cube community we really appreciate it one thank you for your time thanks John you guys are awesome thanks for chatting okay Steve Herod managing director at General Counsel top tier VC from here in Silicon Valley and they have offices around the world I'm Jean ferré breaking down the news as well as a VM real preview with the former CTO of VMware Steve hare now a big-time venture capitalist I'm John Ferrier thanks for watching [Music] you [Music]