really is a unique piece of the VMware culture where the tech guys get together and they just geek out for a couple of days and you know to be to be awarded best the radio it's like oh man you're a god right I think culture is something that happens over time it is preserved over time and it's preserved through people it's not like anything you can write down right of course you can write it down but it won't be worth the paper it's written down unless it's practiced every day by the people about the future is about not only the applications and the the problems that technology can help solve but it's also about the nature of energy and the energy the grid makes the energy in the room is just phenomenal if people are they're really passionate about talking about their work and this people are they're wondering and you meet new people in fact for me in my role what I enjoy the most is of course getting to hear what you guys are doing but also helping them make connections [Music]

>> [Narrator] From San Francisco, it's theCUBE, covering Radio 2018. Brought to you by VMware. (upbeat techno music) >> Welcome back everyone. We're here with theCUBE in San Francisco for exclusive coverage for VMware's Radio 2018. I'm John Furrier, your host. This is the event where everyone comes together in the R&D and the organic engineering organization of VMware to flex their technical muscles, stretch their minds, compete for the papers, and also get to know each other. And the key person behind this is the chief research officer David Tennenhouse. Thanks for joining us today. >> Thank you John. Really glad to be here. >> So you're the chief research officer. You got to look at the company-wide agenda. But this event is more of a special event, organically. Talk about for the folks out there watching what's different about this event that goes outside the scope of kind of the top-down research. >> Yeah this is really, you know, for the developers by the developers. So when you said I'm in charge, I'm definitely not in charge. And you know, we have a program committee. There's a programming committee chair. It's much like the way an academic conference might be organized, where you know, there's kind of a group of academics that sort of watch over the content. In this case, we have many hundreds of folks that submit proposals into radio. They can't all get selected. It's very competitive because in addition, if you get accepted, you get a ticket to radio. You get to attend. So everybody really wants to do that. >> Talk about the organic nature. 'Cause this is one of the things that I've seen that's been part of a world-class organization. Like Amazon has their own process for it called the big idea. They have certain working documents that process to foster any idea across the organization. How important is that as part of Radio? I mean literally it's anyone right? >> Well it's not just Radio. It's important to the whole company. So I think of this as when you're working on innovation, you're gonna have sort of a breadth component. You want everybody doing a little. And some of that's gonna be incremental. One thing I learned in a prior role at a different company is you know if you add up a lot of two percenters, that's how you can double things and keep on Moore's law every year. So you're gonna get some of that. And you're gonna get some really disruptive ideas. So you know, from a top-down point of view, we try to drive some disruptions. Some disruptions show up organically from the troops. And a ton of that breadth stuff shows up. >> I'm honored to be here. It's the 14th year, and some T-shirts commemorating the key milestones from way back in the day. This is the first year press was allowed in. I noticed a handful of folks came in to kind of document this. A lot of the brightest minds in VMware here. Again, great to have us. We're super excited. But share with us. Like, what's happened over the years. Give some examples of where people were coming together, where there's a collision of ideas, and just that combustion that happens. Can you share some stories around key notable, or potentially as Raghu pointed out, there's been some misses too. (laughing) >> Yeah, you're gonna get some of that. I mean you've gotta take risks. Not everything's gonna work. You know and just to speak to misses. What I've learned in the innovation and research space is as much as anything, it's about timing. It's pretty rare that you completely technically miss. Usually engineers have an idea. They'll figure out a way to make it happen. Then the question is, is it the right time? Are the customers ready? Is the market ready to go in that direction? So, that's just to talk to that. >> Timing's everything. >> Timing is a big deal. >> Well there's never a miss too in R&D because if you, like Pat Yelson said, understand when it's gotta be re-casted. Know if it works or not. >> Yeah just understanding. So those are the ones actually you know I feel, what I really hate is if for some reason we have to end a project and we haven't actually gotten to the bottom of it. And so you don't know yes or no. And sometimes that can be the kind of time's run out, right. You've decided well, even if it works, it's too late. But you know, getting back to some of the examples, I'll focus on some more recent ones. We had some really interesting work come together on containers. And there were some folks that, and this is going back like four years ago. Containers aren't a new story, and certainly not for VMware. But around four years ago, there was a proposal at Radio that had to do with hey let's make containers a first class citizen on VMware's platform. Okay, so top level that makes great sense. Let's go do it. Containers are great for developers. The IT folks still want the isolation they get form VMs. Let's put these together really effectively. So that was top level. There was a next level, the idea that said gee at Radio, a couple years before, there'd been this idea of being able to do something called VM fork, or being able to clone a VM. And saying you know... And this came out of our end user computing group, the VDI folks. And if you think about it, if you've got a virtualized PC, you want to be able to clone that so you can start these up really fast. And the container folks said hey, we've got the same problem. Could we actually try to make use of that technology and use that as part of our bigger container push? So you know, those are examples of things that came together at Radio. And there are also examples of things where the market timing may not have quite been there. So we went out with the container work. That was actually post-Radio. It was funded. We incubated it. You've got vSphere Integrated Containers hit the market exactly the right time. >> Timing right there. >> Right, timing right there. But what we learned as we actually started doing trials with customers was that they didn't actually need the instant clone on the containers. What they needed is throughput. They wanted to know that they could do large numbers per second as opposed to you'll get that container really quickly. So as the team went along, they actually shifted away from that fork idea. We'll probably come back to it when the time's right for it. >> Well you have a nice little positioning there. I like the timing. 'Cause by the way, entrepreneurial timing is the same way. You go outside... >> I was a VC. (laughing) >> Okay, so you know okay. Timing's everything. How many times you seen that entrepreneur wicked early on it going... And they keep scratching that itch and finally they get it. The art of the timing. But also the art of knowing when to, what to keep in inventory. Pat mentioned vCloud Air as an interesting example. Recognizing abandonment there. Okay hey, let's just stop, take pause. Let's use what we have. >> Do something else. >> Do something else. >> Gotta do something else. And by the way along the way, in parallel with vCloud Air, we had built up these vCloud partners. And that's phenomenal right. So we have you know, people think in terms of a couple of very large public clouds. But we've got literally thousands of people running public clouds in either specialized markets, or particular countries, that are running on our platform. And you know that whole vCloud Air effort helped push that forward. >> So where were you a VC? Just curious. >> I was actually in a company that fits with sort of my role in research and innovation. I was in a specialized firm, boutique firm, new venture partners, that specialized in spin outs from large companies. This goes to the timing, right. I'd previously been at another large company. You know, and whenever you have a research portfolio, you're gonna have some projects that you started. They were technically successful. That's your first notch. Then you go look and say hey, can I find a business model for it. Some of these are both technically successful. You find a business model, but you had anticipated that the company strategically was gonna zig. The company zagged. Now this is a great opportunity that doesn't quite fit. So you know, we did those as spin outs. >> Well I love the perspective too of you said earlier, David, around not getting to the bottom of it. And that's the most frustrating part. Because you just gotta get some closure you know. Like okay, this thing, we took it to the end, completion, this is not gonna... Good try guys. >> And we know why. >> And you know why. Now let's take it to the next level. Now the market we're living in now I heard with Ray O'Farrell, I was talking with earlier. We talked about the confluence of these big markets coming together. Infrastructure market, which is kinda declining on paper. But cloud is filling the void. Big data's becoming AI, and blockchain over the top. These are four major markets. And at the center of them, intersecting all these nuances, security, data, IoT. >> Governance. >> Governance. So there's some sticky areas that are evolving based upon these moving markets. Opportunity recognition's another one. So this is what you're kind of doing now with the research. Talk about opportunity recognition. >> We definitely do that. And I do want to say on the infrastructure side, you know something to recall is that as people, you know they've got their private clouds. Those are individually getting actually bigger as they consolidate. But now with IoT, you're seeing edge computing pop up. Right, so the private infrastructure doesn't go away, it moves around. It's like a liquid. And you pour it from place to place in some sense. >> Moving computer around. Sound like what Ray O'Farrell was talking about in his keynote, early days of VMware. Again, Compute's the center of this. >> Right, Compute, but you know I'm a networking guy so you know, we've grown that. And I think that in fact, you know more and more as we make progress with software defined network, and network virtualization. And if you think about that, so you know let's look at that. So Compute's definitely at the center of what happens in the data center, in the cloud, right. You're gonna want to be able to string those piece together. So today we've got AirWatch. I think that's strategically really key. Because it gives us a little bit of presence on the edge devices that touch people. That's one of the ways information gets from the physical world to the virtual world is through people. >> It's an edge device. People are things too. >> IoT, right. So we're you know, working hard. And that's one of the projects that we incubated, and researched, and is now become a business at Vmware. It's to get that presence right at the edge of the gateways that bridge between the things that are connected to the physical world, and bringing it into the virtual world. Now if we can put our software defined network between all that, so you got it between the public cloud, the private cloud, the mobile devices in people's hands. >> And on premise, data center. >> Exactly, all of 'em. >> All right, so here's a question for you. This is one of those trick questions. Is the cell phone an edge device or an IoT device? >> Well I think it's in many ways both. And what I think of it is is more of a gateway. If you think about the IoT world, you have the things. >> IoT is a strict definition though in your mind, right. People refer to IoT as more of a sensor thing to a physical device. >> I tend to think of it as it's got some connection to some physical device. It's able to bring information in from the physical world. Okay, so now you look at your cell phone. It can bring information. It's got that microphone. It's got that camera, right. It can bring information in. >> [John] Connect it to a physical person. >> It can put information back out. Yeah, through a physical person. I've been in the space for a long time. Going back to my time at DARPA, we set out to create the IoT world. This wasn't an accident, right. We looked at this and said, okay the main way information gets between these two worlds today is through human beings. The way I used to explain this to the generals is you know, we can't keep putting human beings in the direct line of fire of information technology. So we've gotta get these devices, gotta get all these sensors. It's taken a long time. This is you know again, timing. But if you look at the research world. >> By the way, incredible work you've done by the way from there to here, it's been amazing. >> You know pull this along. But you know so when you look at that cell phone, it's got some of those sensors. It's got actually a whole pile of sensors in the phones today. It's got actuation, the ability to put the information back out. It's also a gateway. Because typically you know, particularly through its Bluetooth functionality, and as we get Bluetooth low power now. So it's also acting as a gateway to connect up other devices around your body, network etc. >> Personal networking, whatever comes on your physical presence. >> So you know, turn that around and it says in the IoT world, we've gotta manage gateways. We've gotta make sure gateways stay secure. Because they're really gonna be the sort of main perimeter, the line of defense. If you think about all these things that are gonna be out there, as an industry, we're gonna collectively try very hard to secure all those things. But let's be realistic. They're gonna be supplied from a wide variety of companies, and they're gonna last longer than people might think. >> How much of those devices are operationally, operation technology is non IP, versus not IP. Internet Protocol. >> Non Internet Protocol. Yeah, yeah. >> Internet Protocol now. >> [David] Non Internet, you had it right. >> Got the VC in the brain there. The VC, IP, I'm like get that IP right. So internet protocol devices, which has some challenges but that's getting fixed, versus OT just sensors proprietary. >> Yeah well either proprietary or let's say, you know it may be an industry standard, but an industrial standard. So today, a very large fraction, particularly you asked about how we focused at Vmware. Well one of our foci is we're about what are our enterprise customers gonna need. So when we think IoT, we're not really thinking that much about the consumer devices. We're thinking about those enterprise devices. So a lot of those will use... >> That's where AirWatch might come in. So employees still have phones though. >> Employees still have phones. So that's why I said, so there's the human interface. We want to be there. And there's the other enterprise interfaces to all these sensors. That could be in a factory. It could be in a smart city, any number of places. So as we pull information in from those, we're gonna find that they come from a lot of different suppliers and they're gonna last a long time. You know, even if you buy a device that's got a three to four year lifetime, probably 10 to 20% of those still gonna be around 10 years later, right. You're smiling because you know that in your home you have some wifi connected devices that are a little older than they probably should be. >> And they have full processing capability threaded processes on it, which could be running malware as we speak. >> So as I said, as an industry, we'll try to secure those really edge things. But the reality is we're gonna have to draw the line at the gateway. >> It's a lot more security work. I totally hear you. I mean the light bulb could have a full thread on there. The surface area is so huge now. >> And there have been attacks on light bulbs. >> Yeah I know. So I gotta ask you a question. 'Cause you bring up this networking edge, which by the way I love anything that's network. 'Cause I think this is the future of work. How is the future of work impacting some of the R&D you're doing. Because you talked about AirWatch them having more mobility. The human impact, society, whether it's mission driven and or just human collaboration going digital. You're gonna need to have policies. You need to have a networked society. This is super relevant. But it brings back that future work. >> It does. And so couple different aspects. You know, one you know, which just relates to a point you raised is if you look at something like our Workspace ONE product, if you've had a chance to do that. It's kind of a win win, because you get one portal. So you know, an employee for an enterprise, they've got one portal. They get access, it doesn't matter whether they're getting to a web app, they're getting to a you know, a DVI supported application. They're getting to something that's on a server, something on a SAS player, right. They get through that portal. So for them it's convenient. I mean for me as a manager, I love this, right. Because whether I'm on my cell phone, I'm on a laptop, doesn't matter, I can get to the same expense app. I can approve things. >> You don't need to carry two phones. My work phone and my... >> And I can do all these approvals really easily, right. So I also don't worry. I don't see the difference between which device I'm on. At the same time that you're delivering that convenience to the user, you're delivering governance because the IT team can be deciding how that portal's populated, how things are connected, right, and how the wiring works. All the authorization, you've got a common identification system and all of that. So that's kind of very specific to you know, let's say near term changing the user interface. In terms of the broader future of work, clearly machine learning is the big story here, right. And I think that what we're gonna see is, particularly again in enterprise, more and more need for data analysts to be able to look at the big data. We're gonna see sort of more and more use of machine-learning technologies. It's gonna you know basically creep in everywhere. And we're getting this at just the right time. So if you want to think about future work in the big national and international scale, what you really sort of stop to look at is say, gee, okay, these machines are gonna do all this work. What about the people? And you know a lot of people therefore get concerned. Gee, the computers are gonna take away all the jobs. Right, you get these sound bytes. >> I think right now we're worried about fake news and real content. (laughing) >> Well let's come back to that one later. But there is a sense of gee, you know, the computers will take on all the jobs. And you know what I think people are not doing carefully is looking at the demographics. Because if you look at basically all the developed economies for practical purposes, we actually have a demographic problem. Our problem is actually not a surplus of workers. It's gonna be a shortage of workers. In fact, actually in the US right now, you're starting to feel this. Now that's at the peak of the economic cycle. So of course you feel it, you know, a bit. >> They need trained workers too. Also people who qualify. >> Right. So I think the thing we really need to look at is how do we do a much better job at matching, you know, sort of workers, both folks coming into the workplace, people with existing skills, to available opportunities. Because actually we're gonna have a shortage of workers. And it's not just sort of the US and Europe. I mean China, Japan. Well Japan for a long time. China, headed to a shortage of workers. I was out in Singapore not too long ago and was surprised to find out not just that they're concerned. But they went and looked at the Southeast Asian countries around them that are their markets. They're looking at a shortage of workers. So you know, if we didn't have something like machine-learning and AI coming along, we'd be sitting there saying, how are we gonna keep our economies growing? >> We need augmentation for sure. >> We need this augmentation. And it's coming at just, you know, you talked about timing. You know, it's coming at just the right time. Now, there definitely are gonna be some tough transitions along the way, right. So we definitely, you know, for example, as autonomous vehicles come along, we've gotta figure out, okay, all those people that are driving vehicles, what are they gonna do going forward? But let's not kid ourselves too, you know. If you've got trucks moving around with high-value cargoes, you're not gonna leave those unattended, right. We're gonna have to figure all this out. So there's gonna be a lot of interesting opportunities. >> What's your take on blockchain? Well first of all, GDPR, real quick. Train wreck, useful? >> I think it's you know, if you backed up and asked me four or five years ago, I'd have said train wreck. And largely because we still don't have the sort of kind of international consensus on what the rules should be. >> But you mentioned governance earlier. That certainly needs to be at the center of the action. >> Right, but you know, if we take a look now, it seems like it's showing up at just the right time, right. You know, in that sense. I think part of what's happened is over the intervening years, a lot of countries outside of Europe, because they realize these regulations would apply to them, they've worked with European regulators to help the regulators understand the technology, you know, help the companies understand. >> That's a good politically correct answer. I'll just say I think it's a shit-show personally. But you know. I mean it's gonna force people... It's like Y2K in money making, but Y2 never happened. It's forcing people to really, I think the value of GDPR is the big companies are gonna get hit hard on some suits. Just the trolling thing bothers me. Just the trolls that come out of the woodwork. But I think the positive that puts the center of the value proposition, making data, not a one off, like backup and recovery. It has to be core to technical operations. >> And making privacy something that's really in that first class category. You know, as I said. >> Great first step, but... There's a big but. >> There is more to be done. >> Hopefully they don't go after us little guys. All right, final question, blockchain. We are super excited about blockchain. You have teams working on this. >> [David] I am super excited about blockchain. >> Talk about your view on blockchain. Why are you excited about it? Obviously we feel it's very efficient, makes inefficiencies efficient across all industries. Your thoughts. >> Okay so again, we look at things through this prism. What are enterprise customers gonna be looking at? What do they want? And you know, so we're not you know... I think you're in the same place. We're not looking at the crypto currencies, right. That's not the thing. And in fact, we're not even looking at cohabiting on the Bitcoin blockchain. Because do you really want to run your business in the same place that a whole bunch of other people are running illegal businesses and the whole thing. >> And by the way, there's some technical issues. (laughing) >> We'll get to that. We're gonna get there. But just even as a starting point. So we pretty quickly looking even you know, three, four years ago said, okay enterprise is not gonna want to go that way. But this idea of a federated ledger, right. So if you can make federated ledgers and we can have reusable technology, that means now, if I want to federate with other companies or other organizations, or you know, or you need companies federating with governments, or governments federating with each other. Anywhere you want to pull together essentially a club for the exchange of data, with a persistent record of what happened, you've now got a common way of doing it, right. Or we can drive towards that. You know there'll be a standardization process to get there. But so it's not to me, federated ledgers means lowering the barrier to federation. And I think that's pretty exciting. Whole bunch of places. You know, supply chain, clearly one. Financial technology, but... >> David, we gotta spend some time, have you come in the studio. I'd love to explore some of these great topics with you. But I gotta ask you one final question. You know, with your history going back to ARPA, D-ARPA days, and looking at really the beginning of the information super highway, IP, connecting some universities together, to today, the waves that have gone through. We've talked about standards. The OSI stack, you had all these grandiose standard plans. Not all of them have happened exactly as planned. But defacto standards play a really important role. It galvanizes community, gives people guiding principles, a north star, whatever metaphor you want to use. The key is the enabling disrupting technologies, a defacto standard. What's happening now in your mind that you see out there that's starting to emerge as defacto? 'Cause certainly there's a lot of standard things going, open sources for tier one citizen growing, rapidly, which is greatness. Cloud is booming, unlimited resources, Compute, fingertip compute... All this is good. >> Yeah. >> All these new standards, I got Kubernetes, I got this going on, what's emerging? >> Well again, they're defacto, right. Kubernetes is an interesting example of basically open source meets defacto. And that's pretty exciting right. I mean, we're excited about it. I think people are often surprised we're a fan of open source. And I guess really, I just like to sort of back up a notch. Because you know what you touched on is defacto standards, whether it's open source or not, have suddenly become a lot easier. When I say suddenly, over like a 10 year period. And I think what's going on there is this is part of the change to software. So you know, if you're talking about hardware, and you got screws, you know, and you got threads, these physical things have to match, and they have to match exactly, right. Say when you travel overseas, you need to carry converters, physical converters to convert from one thing to another. So if you want to interoperate, if you and I want to have stuff that interoperates, we needed to build like either, do the same thing, or have a physical adapter. There was a cost to not having a standard. If you think about in the software world, we can build software converters, right. So if I've got you know, say we've got two, or three, or four, or even 50 defacto standards in the software world. You know, blockchain. So there's 50 new things. Everybody launches their own. Pretty quickly, the market will drive that down to a small number. And then you can put software converters in place. So we no longer actually have to get to one. >> [John] That's the software economic model. >> It's a big change. >> And that is huge. So by the way, we had Dirk Hohndel on at CubeCon. Love his open source mission, just a shout out to you guys, doing a great job. You guys at VMware certainly that we know, love you over on the East Coast. Final prediction. Final question. Give us a prediction. >> Give you a prediction. >> 2018, second half of the year, what's gonna happen? What's gonna be a notable thing that you see out on the horizon that might happen in the marketplace that might be notable for people to stand up and pay attention to? >> I think we're gonna see some significant developments in the blockchain space. And it's gonna be in the category of people starting to announce real deployments. And you know, if you're sort of looking at that time frame, you know you've had a lot of different enterprises try things. We've had people kind of dabble at things. I think you're gonna start seeing some people really move significantly in that space. >> And do you think like, just to follow up on that, do you think like in the database world now, where by the way, it's okay to have a zillion databases now. 'Cause you talk about databases. >> But it consolidated down to a few players. >> You get some extraction layers. It's okay to have a few variety of blockchains. I mean, there's no one blockchain. >> Correct, so that's where I think as I said, you're gonna see actually a bunch of these deployments. They'll be using different technologies. And then the fun really starts right. As people consolidate, especially with open source, they swap ideas. We boil it down to what's the best of the best. We've got you know, stuff we're doing certainly to knock the throughput down, sorry throughput up, latency down. (John laughing) And you know, we think we've got a very scalable approach. And most important, you know something that's really... I don't know if you talked to people about our sustainability. You know, it's a key value for VMware. >> [John] Yeah, lot of great standards there, yeah. >> So you can imagine we looked at blockchain. We looked at proof of work. And we said that's proof of energy wasted. We're not going there. >> Gotta make it more efficient. >> I think you're gonna see more and more folks focusing on things like Byzantine fault tolerant. Ours is scalable. You know SBFT. >> Yeah performance is key. And the energy's a huge problem. >> But performance and at acceptable energy. You can't you know, just waste. It's immoral to just waste energy. And it really goes against what a lot of the whole IT industry's built up. You know, I think we've, over the decades, we've done a lot of things for the good of society. And we gotta stay the mission. >> I think as the more, I won't say mature, but big world-class organizations join in, I think that'll straighten itself out. And certainly, as any evolution would see, the web. I remember dial-up and AOL. It can't go as fast as this minicomputer. Well you don't get it, it's the web okay. David, thanks so much for coming on, appreciate it. Great conversation here at Radio 2018. I'm John Furrier, Cube coverage of VMware's annual 14th year conference, at Radio 2018. Thanks for watching. (upbeat techno music)

>> [Narrator] From San Francisco, it's theCUBE. Covering Radio 2018, brought to you by VMware. >> Hey, welcome back everyone. This is theCUBE's exclusive coverage of Radio 2018. We are in San Francisco for their VMware's Radio 2018. It's their R&D fiesta, party. As Steve Harris said, former CTO, it's like a sales kickoff for engineers. It's a great time, but it's also serious. A lot of real serious discussion and of course people are flexing their technical muscle and stretching their minds. And I'm here with one of the chief operator, one of the main principals and legend in VMware, Raghu Raghuram. Chief Operating Officer, new title. Chief Operating Officer, Products and Cloud Services. >> That's right. >> Great to see you. >> Great to see you, John. >> What year did you join VMware? >> 2003 (chuckling) >> 15 years >> So, you've seen many of these radios. >> Yes, it's one of the highlights of the year for me. >> Yeah, super important architect of VMware, great part of the community, leader, architect of the AWS relationship. >> [Raghu] Sure >> Part of that movement with Andy Jassy, Sanjay Poonen. This is the 14th year of radio and VMware has changed a lot since you joined. It's now a world class organization. Getting check marks for one of the best places to work. Certainly for engineers it's like a great party environment. Take a minute to explain the radio culture, it's 14th year, there's t-shirts behind us, to commemorate the key milestones, where it's come from, where it's gone, your thoughts on the program and the community. >> Yeah, I mean this is in fact one of the unique characteristics of VMware. I have checked around with my peers in the industry and I don't think any other tech company of our size does this. Radio stands for R&D innovation offsite. Like you said, we started fourteen years ago just to take a bunch of engineers out from their daily grinds and say, "what could we be building fundamentally that's groundbreaking?" So, I would say it's a cross between a wild science fair and a research conference. In fact, both of these go hand in hand at this place. People publish papers and there is a selection committee just like in serious conferences. In fact, Ray had some amazing stats for this year's submissions and the selection is very very rigorous. At the same time, you'll go upstairs and you'll see the exhibition hall where there are all kinds of things that are displayed. Things that could be very well incremental things in the next release and things that are wild and wacky off the wall that we might never ever do. So, it's really the full gamut. Another interesting thing is we've gone bigger. We are getting people from pretty much all parts of the Emirate. I think there is representation from 25 companies. >> [John] How many engineering centers are there roughly? I mean, there's core centers and then you have engineers all over the world. How many engineers, ballpark? >> I would say, in terms of medium to big size centers, there are probably over a dozen across the globe and literally every continent. Clearly, in the US we have four big centers. In Europe, we have three at least. In Asia, we have another three or four. So, we definitely have over 10. >> I mean everyone who knows the VMware and also knows theCUBE, for nine years, well this is our ninth year covering VMworld, all you gotta do is look at VMworld and you can tell one thing right out of the gate. Very community oriented. All the decisions are made in the community. Also, people who know VMware know you're highly an engineering organization. >> [Raghu] Yep. >> This is not like a lot of marketing fluff. Although, you do have some good marketing here and there, but the point is it's an engineering culture with community. This is unique. I've seen companies that don't walk the talk on "community engineering". They have silos, there's a lot of infighting. How have you- How has VMware preserved a culture of innovation amongst their peers when it's competitive as hell inside VMware? One to be smart, achieve the success. But, also, VMware has always been in always a moving market. How do you guys do it? What's the secret sauce? >> I mean, there's not a single thing. Like you said, culture is something that happens over time and is preserved over time and is preserved through people. It's not like anything you can write down, right? Of course you can write it down. But, it won't be worth the paper it's written down on unless it's practiced everyday by other people. And so, I think that is the key thing here. Right from the get go, customer centric innovation has ruled the rules here. So, the question to ask always is great innovation, look at it from a customer end point of view. I think that matters a lot here. Secondly, there is a lot of emphasis on breaking the rules in terms of doing something disruptive, right? And, the engineers that come here tend to be the kind to respond to that, right? And then lots of venues. Like this is not the only thing that we do, right? We do these things called borathons, which is our internal version of hackathons. We do regional versions of these things. Each of the teams, like the business units, have their own little R&D innovation activities that go on. >> They have a playground. They can basically go outside the scope of their job. >> Exactly. >> Get an idea, a passion, an idea and go after it and not have to worry about anything. >> Yup, exactly. >> [John] With a path to commercialization, if it hits. >> Yeah, that's what I was gonna say. We have a fairly high success rate, I would say, of taking things that we see here and turning them into product and eventually into monetizable businesses. All the things that go into the product features. >> Give some examples of historically, successes, notables, and then also talk about some ones that aren't notable that have come out. I know a lot has come out of this, the numbers are clear. What are some highlights that have come out of the radio event that have been blockbuster successes? >> A lot of the things that you see in the networking today came out of radio. Things about doing security and networking from the hypervisor up, came from here. What you see today as vSAN, had its roots here. What you see today with the app defense and the security stuff, had its roots here. A lot of the features that are in vSphere today, especially the storage vMotion and so on and so forth, was first showcased here. This goes on and on and on. We also have a lot of things that have shown up here that we have not pursued. For example, almost like an eBay for VM capacity. We didn't pursue it. God knows, that could've been a huge idea. (laughing) >> It's the misses too. >> Yeah, there's the misses too. But, that's the whole point of this. >> Yeah. There's parts to creativity. How much creativity goes on at this event? I mean there's certainly a lot of barnstorming, brainstorming, or whatever you wanna call it. A lot of interaction, physical face to face. How much creativity is happening you think here? >> Yeah, so a few years back they introduced a couple of things. One is a instant birds of a feather. Where you can literally go to a whiteboard and say, "hey let's discuss this topic," and set up a time and then people show up. There's this other one they call Lightning Rounds, which literally happens over drinks I think tomorrow or something. Where people come in and it's lots of the mini gauntlet where nothing is scripted. All sorts of crazy ideas keep flowing. I would say those are two examples where there's a lot of on the spot creativity. As a company, the R&D teams have gotten more dispersed. This is the opportunity for people to get together even within the same business unit or across business units and say let's go solve this problem. You and I have been talking about this on email, let's talk about it face to face. Hey, let's bring somebody else in that's relevant to this conversation as well. So, those are the kind of things that go on here that spark the creativity. And then of course, the exhibits. When people start thinking about these exhibits and talking to people that are showing there, other ideas get spawned off as well. >> Raghu, talk about just from your experience, you got a great track record, and certainly it was in VMware, it goes back to the early 2000s. What is your observation on the innovation formula? What's been the consistent constant of innovation? As the waves have changed- I mean, I've been in Palo Alto for 19 years now, in my 20th year. Even Palo Alto's changed. So, the world's changed, modern. And we'll get to the Amazon deal in a second. Certainly cloud's here. What have you seen as the constant innovation variable? >> What I would say is this. Fundamentally the people that we tend to recruit into VMware are by large what we call, or at least I call, platform thinkers. So, they think of building a fundamental piece of technology that can be possibly be used in 10 different ways, and they build it for one particular use case. And then, the questions goes back to, now we've done this, what else can we do with this foundational technology? If you look at vSphere, does the same thing. If you look at networking, same thing. Storage is the same thing. So, I would say that is the constant. That's one constant here. Which is, how do you build fundamentally a platform that could be used in very different ways. >> Some will also say systems thinking. >> Exactly, so that's a compliment. >> The cloud is a system. >> (mumbles) I think Paul Maritz is a 2010 picture. Although, some of the calls didn't come out. He kind of generally had the architecture. >> Yeah, yeah >> He nailed it (laughs) >> There are a few people like Paul in the world and absolutely he nailed it. >> Dave and I would give him a lot of credit for that. Okay, let's talk about Amazon Web Services. Certainly Radio's now 14th year. At what point did the cloud start clicking in? You said there's some misses, the eBay for VMs. Certainly cloud is on the radar. >> Yeah >> And vCloud, we know what happened there. Pat talked about how you guys really took that opportunity, which is, you made lemonade out of some lemons there with that product. That's my words, not his. When did cloud first appear on the horizon in Radio and how do you see that happening now as we talk multi-cloud? >> You missed the alumni session today. One of the early engineers said when he was interviewed by Mendel, which was in 1999, Mendel is of course the founder and first chief scientist here. He said he foresaw the event. When the engineer asked him, "how are we gonna make money on this?" He thought there would be a day when people just rent computer capacity from a data center instead of going out and buying gear. In some ways- >> He predicted >> He predicted >> Cloud operations >> Back in the company's starting days. But really I think we saw this in 2005, 2006, 2007. At the same time actually as Amazon saw this. But, the big difference was we were growing 100% a year on core business and we had our hands full that way. We felt like as a software company the way to play it was by delivering technology to other people to build it. So, that's when it really made it's way here, in Radio and in the products. >> And by the way, it wasn't obvious to many people in the industry at that time, to Amazon. I've had many conversations with Andy Chassy and he now uses the term being misunderstood. They were completely misunderstood unless you were an entrepreneur who was using EC-2 just to avoid seed money. 'Cause it was a dream for entrepreneur's at that time. I remember that clearly. That was not obvious. It really wasn't obvious until about 2010, nine, 10. So you guys were growing. Missed that. Radio is not about missing it. It's about identifying. >> Exactly. >> So, how does it translate today for Amazon? >> The Amazon relationship, if you think about the technical underpinnings of it, clearly we did a vCloud error. We learned a lot on that. Within some of our engineers, the question that was asked was, "what if we could run a cloud on top of other peoples clouds?" And we did experiments with nested virtualization. We did experiments with bare metal. And then we chose the start of our model. So, that's one of the technical early indicators of what we could do on other people's clouds. So, that's a big thing. The rest of the things we're doing with respect to elastically growing capacity and all those things, came from experiments that were shown up here. So, that was the connection back to Radio. In terms of the Amazon partnership itself, a lot of it was driven from the customer end. As we were thinking about VCN not working the way we wanted it to work, we went back to the customers and said, "what is wrong with this picture?" And, the answer that came back was very clear. They said, we like the hybrid idea, but we want the hybrid to be VMware on prem and Amazon in the cloud because 70% of our customers turned out to be AWS customers. And at the same time AWS was hearing the same thing. Why don't you guys team up instead of being either or? That's what led to the partnership. >> Your team at VMware came as the cloud native piece? >> Yeah >> Aspect of it. So Kubernetes is on the horizon. Not on the horizon, in your face. And you've got service mesh over the top. >> Yep, yep >> That's up the stack. It's networking. >> Yep, exactly. >> Still needs to do networking. >> Yeah, exactly. >> It's like, you guys must be like, hey we love what's going on up there. Come down to the store. >> Yeah. So, the boundary between what is application platform and infrastructure platform is constantly changing. Kubernetes, when it started out people said oh it's an application platform. Now it turns out its actually infrastructure. Same thing in networking. So what we see is, things were the lower level of the infrastructure constructs, the same idea is applied at the next level up. That's why we love Kubernetes. We love Service Mesh. We love similar concepts that are coming about in storage and security it's one- >> A unified stack is coming. >> Yep, exactly. >> Just someone fix networking and then the holy grail, programmable networks. >> Yep >> When are they coming? >> At the application level. >> Let's go >> Yeah >> Holy grail is finally here. It's not where you thought it was gonna be. >> It is at both places, right. I mean, it's tying back to the conventional layer, two layer, three stuff because that's also important still. >> Raghu, I love having a chat with you. It's great to chat. >> Good to see you again John. >> Super impressive with the work you've been doing. Love the cloud deal with Amazon, you know that. Love what's going on at Kubernetes and containerization. Love what's going on with Service Mesh, unified stack. Love cryptocurrency, which I didn't get to ask you. >> Yep >> Thumbs up? >> Crazy things going on there too >> Thumbs up, okay, thumbs up. >> We're watching the cryptocurrency. >> Watching, token economics coming right behind it. It's theCUBE bringing you all the action here at Radio. We're the signal. 2018, Radio 2018. I'm theCUBE with Raghu. I'll be right back with more coverage after this short break. (upbeat music)

>> [Voiceover] From San Francisco, it's theCUBE, covering Radio 2018, brought to you by VMware. (upbeat techno music) >> Okay welcome back everyone. This is theCUBE's exclusive coverage, and John Furrier, Here in San Fransisco for VMware's Radio 2018 14th year where all the top engineers and R&D folks get together and show their best stuff, ideas, discussions, and have a great time. Our next guest is Nicola Acutt who's the vice president of stability strategy office of the CTO VMware part of the group that puts this event together, really a celebration, but also competitive. Welcome to theCUBE, thanks for showing up. >> Thanks, it's great to be here, thank you. >> So, talk about what your role is, because sustainability, we were just talking off camera about blockchain and the energy. Is sustainability an energy thing, is it a society thing, what is your focus? >> John we think about sustainability at VMware in a holistic way, and it's some total of how we run our business, so from an operations perspective, how we do that in a responsible and an environmentally responsible way, but it also includes our people and culture. Sustainability is a lot about culture change, and then most importantly, it's also about what we do, and the impact of our product. And so at VMware, we focus on sustainability and what's unique about our approach is that it's in the business, that we have placed the sustainability function in the office of the CTO, because we believe that the biggest impact that we can have is actually through our technology. >> You guys do a great job, I have to say. And the building, by the way, in Palo Alto, your headquarters, which is voted one of the most best places to work, is very sustainable. I know they got a couple of pens from the trees, and you guys use all the wood, all the stories involving the building. So the culture's there, so I gotta ask you here at Radio, what are some of the sustainability ideas, what are some of the conversations, what are some of the papers, what are some of the core tech off-road map that's exciting you and the team at VMWare on sustainability? >> Right, it's really exciting, and Radio is such a magical event for all those reasons. And the sustainability piece of this is really exciting, and there's a couple of dimensions that we have. We have an expo up in the science fair part of the event where some of our engineers who participated in our recent Borathon, which is like a Hackathon, and the theme was sustainability, and so they're presenting their hacks, some of their crazy cool ideas. On one end there was a project around using block chain technology for microgrids, there was a broken build predictor, there was a project around monitoring real time energy for our service. So fascinating, sort of skunkwork projects in the office of the CTO, and then we also are going to be doing a paper cosponsored with two of our principle engineers looking at, and asking a really big question. And that is around code sustainability, and how we think about sustainability and energy as a metric of success just like we consider performance, quality, and security. So I'm excited about that, because that ultimately is about culture, and it's about thinking about hard problems. And that's what innovation is about, right? It's creativity solving hard problems, and implementing something as a result. >> And the big debate about, oh servers aren't gonna be made 'cause the clouds eating server market, well someone's gotta buy servers, someone's gotta run data, so that's always been the challenge of how do I get more power? And now intermitting things, the IOT devices, are needing power. So you've got solar, not a lot of challenges at the network layer but also our layer. Because it's not connected to the network, it has to transmit, it needs power. How do you guys see that evolving on the R&D front? >> You know, I think that's one of the big horizon issues for our industry, frankly. VMWare celebrating our 20th year anniversary, and recently we had an event where some of our alumni and founders and they were asked the question, "what are the things that "keep you up at night about our industry?" And there were two answers to that, one is security and the other is energy. So we really have to fundamentally think about this question, and that is something that we are taking to heart at VMWare and considering what does that future look like? For some companies sustainability is about innovating around things like, can we make products from plastic pollution in the ocean? And for us, we're asking the question what does the future of energy look like for our customers and for our industry? And that future is going to be a distributed energy future. So what does that mean for computing? I don't have the answers right now, but that's part of, and events like this where we bring our smart people together to start to ask those questions, and that's where innovation begins. >> And you don't know where the spark is gonna come from, that's what's great about these tech events, is that there's no bad ideas, 'cause you can kick it around. There's enough people around you, and then now you go back to the company, digitally connected. So you have the Hackathons and the tech talks, you have cool vibe environment, the question I wanna ask you with that is that, is that distributed energy challenge the number one item on the agenda? What are some of the key things that are shaping the agenda for you guys with sustainability? 'Cause I think that's what folks might wanna know about, "okay, what should I think about, is it energy, "what are some of the things I should "start thinking about in the shower, "thinking about as I'm at work or at play?" >> Right, great question. And you know, sustainability is a complex issue that challenges us as a society. For us at VMware, like I said, we're taking a holistic perspective on sustainability, so that includes environmental, social and governance matters. But to answer your question from a technology perspective, we are focused on energy, that's not the only thing, but it is a priority. So we're looking at that from several dimensions. One is our own processes, so that's where the sustainability code initiative code comes in, so how we make our code and our product. And then the products and features that get built into our products and services to our customers, and then layered on top of that is then the energy mix, and doing our part as a progressive company to drive through renewable energy's markets. So we've made a commitment to 100% renewable energy, to carbon neutrality, to do our fair share, but also to help shift the market. Because the future is about not only the applications and the problems that technology can help solve, but it's also about the nature of energy, and the grid mix, so that's a combination. >> And the empowerment to society is also a big one. Huge focus this year, not this year, but this decade on mission driven initiatives. Sustainability clearly falls in that. We were talking about before we came on camera about block chain, and one of the things I've observed in my reporting is that a lot of energy ideas in block chain. You mentioned one of them, where token economics could be an issue. I know block chain has it's own challenges with energy, but that's a hard problem that could be solved that needs to be solved. So folks watching, solve the energy problem, and the speed problem too on block chain. But these are the new ideas that are growing in India, in Africa, these new areas of the world where the middle class is exploding in growths. More access people to computing, more mobile devices. So you start to see new geographies around the world challenge. >> Absolutely, and I fundamentally share the optimism around technology. I think as technologists, we need to be thoughtful about the impact of technology, and I think that is another topic of the day we could have a separate conversation on that, but when you look at the challenges of the world, and the United Nations has put out the sustainable development framework that really names those big gnarly problems of the world that we need to solve, and at the heart of all of those, I believe, technology plays a role. To me, I think that's where companies like Vmware can have a bigger impact, is to think about where is that sweet spot around which we can help bridge those divides, and enable a better future more globally. >> I know you gotta go, real quick, describe what's going on here at Radio, San Francisco to the folks that are watching could make it, what's the vibe, what's it like, share some color commentary. >> You can just feel the energy. It's like a big science fair, but at the end of the day-- >> [John] It's social, too. >> It's very social, and this event is about technology, but it's actually about community. So we talk a lot about all the cool things and things in our future, off-road maps, but at the end of the day, software is all about people, and you see that here, you feel it, it is a community event, and it is about people connecting, and that's the best part about it. >> It's the social collaborative construct. We love coming here, thanks for inviting us. The engineering's action's happening, it's happening here at Radio in San Francisco for VMware, this is theCUBE coverage, I'm John Furrier, we'll be back with more coverage after this short break. (upbeat techno music)

>> [Announcer] From San Francisco, it's theCUBE. Covering Radio 2018, brought to you by VMware. (upbeat music) >> Hello everyone welcome back, this is theCUBE's exclusive coverage here at VMware's Radio 2018, this is their seminal, big-tent event for their top engineers, smartest people come together present their reports, their projects, and come together as a community and share great content and agenda. As Steve Herrod former CTO says, this is like a sales kickoff for engineers, it's motivated and they flex their muscles, technically, stretch their minds. I'm here with Pat Gelsinger, the CEO VMware, great to see you, welcome back to theCUBE. >> Hey thank you very much, it's fun to be here at Radio. >> So this is nerd central, this is >> Absolutely, this is like geek city baby. >> Dave and I always complement you on your business acumen obviously doing great as a CEO, the numbers, business performance, world class organization, check, best place to work, one of the best places to work for, check. But you're kind of a geek at heart, you like to get down and dirty, technical, this is your event. You gettin' down with the folks? >> Yeah it's fun, I was just at our sales, we have a top sales people, our sales club, so we did it in Abu Dhabi this year, so I was just over there a couple of week ago for that so hobnobbing with the sales guys which is super important, right? Their motivation, their creme de la creme of the year, but to me this one is better, right? Just 'cause now the tech guys comin' together 'cause most companies don't do anything like this, right? So it really is a unique piece of the VMware culture where the tech guys get together and they just geek out for a couple of days and to be awarded best of Radio, it's like, oh man you're a god inside of VMware. >> It's like the Sundance Film Festival, Cannes Film Festival, the Oscars, it's a huge accomplishment and knowing people internally. >> Yeah and some of Ray's numbers this morning as he showed in the keynote, I mean it's competitive to get your paper shown here is competitive, right? So there's a set of judges that are picking the papers that are here out of this we already have over 200 invention disclosures that have come out of just the preparation for the conference and we haven't even gotten started yet, and now the keynotes this morning and poster sessions all week long, and letting the engineers just really vibrate off of each others' ideas and challenge them and all of our PEs and fellows roaming around here they're sort of like the big guys on campus, but hey the young Turks are coming up and they're challenging them on ideas it really is a delightful few days. >> I love your perspective, I wanna get your reaction 'cause one, not only do you have a storied history working at Intel, really a great innovative founders of Silicon Valley with HPs of the world, and now you're the chief of VMware a modern era's here, you talk about this all the time publicly about the business context and at the events, but it's different Google had pioneered this notion of 20% of your time you could work on side project, more of an academic culture Google has, I mean I love that it's cool, but VMware has a unique culture and I want you to talk about that dynamic because you have to be versatile now, agile more than ever, you have to be faster time to market, and it's always been hard for companies to crack the code on knocking down the big ideas, solving the hardest problems but yet making it practical at the same time. What's your reaction to how you guys are doing it, >> what's different? Share some color. >> In some ways and I think some of the panel, we had a panel session this morning, Steve did one session, but we had of the original engineers in the company, the five of the original engineers, right were here and they were saying it was sort of like we're doing research in a business who had business objectives, right? Solving problems that had never been solved before, Sort of the VMware culture is if it's not a hard problem, it's not worth it, right? And our objective isn't to be 2x or 10% better, but to be 10x better, right? And when you're doin' those kind of things you can't always put that on a schedule, right? The problem is solved when it's solved, right? And I was just meeting with one of my teams last night and this is, well alright that looked pretty good but I don't think you've met the minimum viable product yet so let's put it in an open beta for six months before we actually call it GA 'cause I don't think you're done >> solving the hard problem yet, right? >> So you're squinting through and looking at the projects from that? >> Yeah right, is it ready? And have we really delivered something that customers can say, "Yeah here's the value proposition you promised, here's what you're delivering me, it is a quality product," right? Which is something that's deep in that history of VMware right in many cases, and I love one of the statistics this morning, they said the early core dumps of ESX, right they found that over 2/3 of them were a result of memory parody errors, not of ESX failures of any sense, so meaning that the hardware was less reliable than the software was, that's all we sort of this magic that we say, we're out to produce world class infrastructure software that's better than the hardware ever could have been and for a hardware guy that's sort >> So that was your problem, originally I think it was on your watch actually the first core dump. Throwback Thursday would they do core dumps from like 10 years ago look at a simpler core, >> look at x say "Hey look at the core dump, Hey look at cool that is." (laughing) >> If I see the Biaz prompt oh my gosh where did that come from? >> Let's get some vinyl records and look at some core dumps from 1992. >> So Pat, now this is important because I think this is a killer point, when you look at innovation VMware has to meet the challenge of being on that next wave and you've said on theCUBE many times, if you're not on that next wave you're driftwood. A lot of companies who try to do R&D end up solving hard problems to attract the top talent, but they end up getting so focused on the problem they end up in a cul-de-sac on the wrong wave, they miss the next wave. >> [Pat] Yeah. >> How do you manage that? 'Cause this is your sticking point is to make sure you don't miss the next wave, you transition properly, how do you avoid that problem of getting so focused on the intoxicating aspect of solving problem and being in a cul-de-sac no market wave missed? >> Yeah and it's hard right? In that sense and I'll say there's, we sort of look at it from three different dimensions, one is, hey you gotta keep this bubbling cauldron of ideas and that's why we're here at Radio, right? Just these people working on ideas, right? You have some really cool stuff and every once in a while you're telling the engineers, "Well that's good but you haven't solved the hardest piece of that problem yet and so on." Then you have to be able to take it from that bubbling cauldron to, I'll say, an incubation product, right? 'Cause VMware yeah we do R&D, we do core research as well, but fundamentally we've been able to create markets based on our products and really scale them, right? The embarrassing truth of any enterprise software company is for every dollar of R&D you spend, you spend two dollars of sales and marketing, so we can't under invest in those products that we've picked that now are scaling into the market, we have to put the >> dedicated sales >> [John] Get the leverage >> out of it >> The SEs et cetera, that's really frightening. When I'm done innovating a new idea maybe I've dumped 10 million or 15 million into the core idea, okay, now I got to go spend twice that amount on >> Good marketing. >> Marketing of it and boy it's expensive to bring things into the enterprise and if the product isn't robust and solid and really compelling, then it might be three or four x, so you're now rewarded with your R&D investment to go spend on sales and marketing now, so yeah we've really taken and we have a very BCG matrix kind of view of how we take products from incubation into early market success and then into scale and finally cash cow and retirement and that process is one you have to be equally disciplined about. The third piece of it is you have to be able to declare failure and for failures, it's how do you harvest technologies and learning, but be able to look at something vCloud Air and say, "Okay we weren't successful" and now go build a multi cloud, an Amazon partnership coming out of it, we have to be able to make those shifts right and be able to declare failure, be able to move our customers forward, and then move on to the next big thing >> [John] I mean the math works >> 'Cause you're not gonna get 'em all right. >> So to your point, the math works when you can abandon quickly >> [Pat] Yeah. >> That's where the winners are 'cause then you can move the probability of success somewhere else. >> Yeah and if you can't declare failure, right, and view that in the positive and proud way. One of the failures of vCloud Air became the success of our hybrid cloud service capability now, right a lot of this ability to move workloads between public clouds was a direct harvesting of our vCloud Air failure, we're able to take that technology forward and that's now one of the pillars of how we're differentiate and our Amazon service, OBH partnership, IBM, are building on those hybrid cloud capabilities. >> Pat we've been watching you that's one of the things I will say that you're really amazing at, you're good at, you're the captain, you've got your hand on the wheel, you gotta know when to say, "Hey, close that hatch, or we're going to sink," you gotta, or I'm not that there, knowing when to make the calls. So I gotta ask you, when you look at the marketplace now, you have the option to build, the option to buy, and you have to kinda also balance those three areas, you've got Ray, you've got Rajiv, and you've got the Corp Dev guys, they have to work together and sometimes, hey let's go buy that hot start up or no I have it internally, and sometimes it might be in a core competency area. Talk about as the CEO, you've got your hand on the wheel, okay, you're steering the ship, you're setting the direction, the team's workin' hard, how do you make those calls buy build, and when it's in the core area as the market's shifting, what's that look like for you? What your view as you look forward? >> Yeah there's clearly and we think about the case let's take two examples of our buy. AirWatch, hey we saw that we had nothing in mobility and if we're gonna be in end-user computing we must have mobility in the family, so we really in some degree, we didn't have a choice, we had to go buy if we're gonna be in that space and it became foundational for us in that area. You might have argued, hey we should have done that five years sooner, but we didn't, we had to make a buy decision and then we went out and shopped, literally MobileIron or AirWatch? We looked at those and bake those off until almost the last day, alright? And I went into that expecting we were gonna buy MobileIron, right? >> [John] Really? What was the tipping point? >> Right, well, I became a Silicon Valley company, I thought their technology was a little bit better, I thought the AirWatch guys were a little bit too much market and focused on winning the early market, I didn't know if the product had the quality of a VMware product, so I really was handicapping the MobileIron one and the team came out unanimously with my agreement that AirWatch was the right thing, right? In the case of Nicira, one of the other foundational acquisitions that we did, we had a lot of the distributive virtual switch technology we had already innovated, but we hadn't put a control plane, a scale control plane against and that's Nicira did, so there it was really bringing those pieces together which really has become, I'll say, a marquee aspect of our acquisition, in many cases we're in the space >> You feel good about that, how much you paid for that. >> Oh yeah, I mean at the time people said, "1.2 billion for less than 10 million of revenue, what are you guys stupid?" Now everybody says, "Wow you're brilliant." >> So they didn't look at the underlying technology. >> Absolutely >> Leverage you were getting. >> Four years of hard work, core technology, right, and boom, we're unquestionably the leader in software defined networking now as a result of making a pretty bold bet at the time. Obviously organic innovation is the best because it sort of fits in your stream, you don't have to go, you know, change gooey practices or test release practices, it's already part of you as well. But sometimes, hey, I get to look over 10 startups and pick the winner. I may not be able to fund 10 startups internally and pick the winner, but I can look out over, you pay a premium, and one of the unique things about VMware is that over the 60 or so 70 acquisitions I think we've done now, as a company we have a highly successful track record. >> Is that because of the architectural decisions? It's not just bolt on a business unit and say stand alone and produce cash you guys are thinking strategically around how it fits architecturally, is that the difference? >> I'd say it boils down to a handful of things. That's absolutely one of 'em. We're looking deep at technology, how does it fit our technology, can we bring it in? Second we look at the culture of the company, right? We've said no to some acquisitions just 'cause we've decided that culture won't fit our culture or we're not gonna be able to mold it into our culture as well. Number three, we protect this thing, we run a process by which, hey if this is the acquired company, right, and here's the CEO of this startup company, he has passion, he is the commander of his universe, and tomorrow some low-level legal person can say, "No you can't do that," right, yesterday he was enjoying (laughing). Do we protect them? Do we turn their passion and get them to believe that their passion, remember, they're, yeah they wanna be successful, but they wanna turn their passion and objective into a big industry-changing event. And is that passion better executed inside of the platform of VMware? So we protect them, that low-level legal person can't say no or that finance person, we run a special board process around 'em to protect 'em. >> You don't want people handcuffed. >> Yeah, absolutely, we want them to be unleashed, that they have more power not less after they become part of this company that the platform for their vision and passion becomes bigger as part of ours so we protect 'em like crazy in that process. >> And you do that here at Radio as well. You wanna unleash the ground swell, get the grass roots movement going, let the sparks of innovation kinda fly out there. >> Yeah and our success rate is close to 90% on acquisitions and the industry average is below 50% so I think we've really mastered organic and inorganic innovation as good as any company has in the industry. >> Yeah I will say that's the totally true. And also Vsam became a project that came out of Radio that's been highly successful. >> [Pat] Yeah totally organic in that one. >> So you guys think strategically, it's not just bolting on revenue, although that could help if you can find it, there's not much out there for you guys. (both men laughing) Let's talk about some of the hot trends here at Radio. One of the things we're seeing, obviously with tie-in of the competitive, but also the comradery, a lot of, it's interesting to see how competitive it is, but also again VMware's got a hard core engineering culture, but also a hardcore community culture that shines through, it's obvious, so props to the folks running Radio and then the process. But when you look at the trends, what's trending up is the blockchain. We talked to some of your folks there you guys are looking at this, this is really strategic aspect, you talked with Dave about it briefly at Dell Technologies World, what's your view on blockchain? Obviously, you look at infrastructure, blockchain jumps out at you, your reaction to the hype and allusions and reality of blockchain crypto currency, not so much the ICO's, I think that's just a funding dynamic, lot of project-based stuff, but really there's some infrastructuring dynamics, your thoughts on blockchain as an infrastructure enabler for future wave? >> Yeah you know a couple of comments and one is, I think blockchain as a algorithmic breakthrough is on par with public private key encryption, alright? It's just sort of opened up the world of general purpose cryptography, and I think this idea of an immutable distributive ledger, right, sort of busts apart the database and I don't have to bring things together now the databases spreads, right, across it, immutability, right, transactability, et cetera, takes a lot of the acid characteristics of core databases and now does it in the fully distributive way, very powerful and I think it's gonna change supply chains, change financial systems, it's gonna have very broad implications so overall we're in, we believe very much in the importance of that. >> Real quick, to interrupt you real quick, >> 'cause I wanna get this thought in because you brought up general purpose, one of the things we've been kind of talking off camera, most of our team members is, blockchain looks a lot like maybe processors, general purpose processors, opening up an PC revolution, in the sense of general purpose computing. Blockchain seems to have that same dynamic, potentially, not as a direct metaphor, but if you can open up a new dynamic, that could explode new business models yet to be foreseen. >> Oh yeah, yeah, yeah absolutely. If we could take the cost of transactions down by an order of magnitude, right? If you could increase the reliability of a supply chain, right? If you could right in fact guarantee the source of origin of any product against the ultimate place of consumption, these are industry-changing type of capabilities, so we do see it quite significantly that way. But then as VMware looks at it, if there's not a hard problem to solve, then we shouldn't be in this space. So our team, one of the core problems of blockchain, right >> [John] Slow. >> Is the exponential compute requirements of higher order blockchains, so our team has solved that problem we've done some algorithmic breakthroughs that we believe allow blockchain to scale, a close to linear scale as opposed to exponential scale, wow that's game-changing for, we're also solving the auditability problem, immutable, anonymous, immutable is great, but a lot of things need to audited, right? So how can you bring some of those core concepts into blockchain? So those are some of the hard problems that we're solving, sort of back to the 10x culture, solve hard problems in fundamental ways and that's what we think that we can bring to the blockchain universe. >> Well Pat, I think it's amazing that you're here at the event, I know that you love, look forward to this as well, but to have the CEO come in at the Radio event and really lead the troops by example is awesome. We've got VMworld coming up around the corner, give us some teasers, what's happening? I know you're gonna get in trouble from Robin Matlock, (Pat laughing) but come on tell us what's coming at VMworld. >> (laughes) Well you know we have, of course we have a lot of key products, updates and other things that are coming out. I hope to broaden at VMworld this year, the view of the cloud, right? And you say, "Broaden the view of the cloud, what are you talking about Pat?" Well you're gonna have to come to VMware to get the full story, but I do think that we've thought about the hybrid cloud world largely in this idea of public and private in the past, right? But we see that the vision that we're pursuing is one much larger than that where, right, it's public, private, telco, and edge, right? And the confluence of those four worlds, we believe is something that VMware is uniquely positioned to be able to bring right to the marketplace and the implications of that so, I'm quite excited as I broaden our general view >> of the cloud as we come up on VMworld. >> And one of the exciting things it's our ninth year at VMworld, we've been every year one since theCUBE's existed and thank you for your support. >> Ah that's great. >> But I gotta say, one of the things we can do is look at the tape as they say, you said in 2011 or 2012, hybrid cloud and I kind of was like, Pat come on, hybrid cloud. >> Now everybody's talking about it. >> I think that's what it is. >> Yeah. >> But 2012? How many years ago was that? >> I think 2012 I think is when we first started to use that word. >> Yeah you put the stake in the ground, >> again, you saw that as a wave and a lot's been changed and you look back since 2012 you make the right calls, you feel good about where you're at? Things you could do over? What would you do given from a progress standpoint? What's changed radically in your mind? 'Cause we're still talking about private cloud, what, I mean obviously service mesh is around the corner other cool stuff's happening. >> Yeah you know, clearly I think when we think about the STBC, hey we called it right, we're executing better than anybody else. So you can sort of say check, right? Virtual storage, check. We talk about what we've done at NuComputing, transformed their workplace, check. We're unquestionably the industry leader in that area. I think this idea of hybrid cloud it's taken us too hard, too long too hard to realize that the multicloud vision, so that's the one I'd say, okay we haven't delivered as rapidly or as effectively as we needed to, it's now really starting to materialize, but it's taken me a couple, three years longer than it should have to get there and we comment on the vCloud Air and a little bit of the miss that we had there and that delayed our schedule, also some of the Amazon aspects sent us sideways a little bit, but hey I think we're on a very good path now but then to broaden it, to what we're doing in telco, what we're doing in edge, okay this gets to be really really powerful. >> Pat, great for you success. Thanks for coming by theCUBE here at Radio 2018 this is where all the R&D, it's where the ideas are booming I'm John Furrier with Pat Gelsinger, here in San Francisco for Radio 2018, we'll be back with more coverage after this break, thanks for watching. (upbeat music)

>> [Narrator] From San Francisco, it's theCUBE, covering Radio 2018, brought to you by VMware. (digital music) >> Hello everyone, welcome to theCUBE special coverage here in San Francisco. I'm John Furrier. We're here at VMware's Radio 2018, its 14th year, its annual, I won't call it a spring fling, I won't call it the burning man. It's like a sales kickoff for engineers as Steve Harod, former CTO said on stage. Rajiv Ramaswami chief operating officer of VMware products, one of the groups here, great to see you. Thanks for coming on theCUBE. >> Great to be here John. >> So Steve Hared kind of coined it, it's like a sales kickoff for engineers, which is like motivating, intoxicating, a lot of energy, a lot of good technical buzz going on. >> [Man] Indeed. >> People are flexing their muscles, stretching their minds. >> [Man] Totally, totally. >> Creating their sparks of innovation. >> Totally, totally. >> [John Furrier] How do you guys do it? What's the secret sauce? >> Yeah, you know, let me take a step back here. Innovation overall at VMware, it's part of the culture. It's not something that is just purely dropped down to it, in fact I don't believe we can simply drive down innovation from the top, it has to come from within. But what we do at VMware is, culturally we have several set of activities that we foster, that create this culture of innovation. Let me lay out a few examples. And of course we will get to radio, and why we're here. But, everything from, you start with this Tech Talks. Anybody can bring a group of people together, we have weekly Tech Talks, to talk about anything. It might be stuff that they're working on that they want to get a broader audience for, or there may be stuff that, you know, is far out, that they just want to get an audience and communicate. So we have Tech Talks. We have our own version of Hackithon, we call them ballithons. We run globally at all our sites you know our 7,000 plus R and D engineers globally. We run these everywhere and out of those by the way, come great ideas. And these are typically one to two day kind of events that groups of people get together, they actually build prototypes. They called prototypes, the expectation is they have to show us something working at the end of those two days. And all kinds of cool things have come out of those. The next step there is, flings. If you have a prototype and you actually want to get customer feedback, and you want to get equal system feedback, it's not a sanctioned product. But you can go out there and release it and have customers support that and test it for you. And finally then we have sort of a more incubation type, what we call like slaps, that it's actually now more of a centrally funded project that moves on and works on a particular topic. And last, but not least, this event, Radio. >> So the Radio encapsulates the big tent event but you're talking about a specific process for innovation. >> Yep, exactly. >> So, it's organic so I gotta ask you, one of the things I've observed over my 19 years living in Palo Alto and nine years covering VMware, seeing from founding principles to now is, there's two things that jump out at me. Engineering culture, and community. >> [Man] Yes. >> These have always been kind of like the, you know, the nine lives for VMware. You guys always been leveraging those two things. >> [Man] That's right. >> How do you guys do that going forward because as it becomes more competitive you're bigger now, you got a process, so that's cool, I get that. How do you guys drive the process without sacrificing the engineering and the community? >> So let me tell you one thing that you should keep in mind. All of this is done on people's spare time. This is not their day job. Every one of these people, engineers who are here are doing this separate from their day jobs. And so they are motivated and what prompts people to come to VMware in the first place is the ability to work on interesting, difficult problems. Particularly when it comes to infrastructure related. Our motto and our mission is around how software can really change the world. So there's a fundamental driven culture. >> The passion is you want to work on hard problems, changing the world kind of thing. >> That's right, they want to work on hard problems and we foster that, we encourage them to do that and you know, they like it. And also the fact that in most cases these are not individuals. In fact almost every people that you see here is actually a small group of people. And what I'm amazed at as I look through the work that people do, a lot of the stuff, some of it may be a derivative of what they're actually doing in their day jobs and that there's some substance but a lot of it is actually stuff that is actually done completely different from what they do in their day job. >> In the X labs, is it just because you have two tracks as we heard earlier, there's kind of like, continue to incubate it further with some funding while you do your day job, then it's like, oh my god, you know, functions is a service. Let's fast track that, take a break, find someone else to fill your job, or we'll do it and you work it full time. >> [Rajiv] That's right, that is a full time job. Once we get to an X lab, that is a funded incubation project that you are dedicated to. And we allow people to go out and go off and do that, and sometimes it will be successful, sometimes it won't and then they can come back. >> Rajiv, I gotta ask you the engineering question because all my engineering friends, we always talk about this and you hit it the first one which was, we want to work for a company that solves hard problems. >> Yeah. >> You guys, check. And you've been voted a great place to work across the board so great culture, I can attest the culture is great. The second problem is all the engineers, you know, oh I didn't get picked, or who made this selection, there's also self governance going on so you have to manage the typical engineering reaction because everyone loves their baby. So it might not get picked for Radio. >> [Rajiv] But you know what, I mean. >> [John] How do you manage that dynamic? >> So, yeah it's a competitive process by the way. And we run Radio, let me talk a little bit about Radio. We run Radio much like any world class technical conference that Ithiam would run or I typically would run. We encourage an open process where people can submit papers, we have a committee that's actually sitting and reviewing these papers. Just like any other technical conference, some of them are gonna make it, some of them won't. >> It's not a black box though, it's transparent. >> It's not a black box. It's a pretty open, transparent feedback. Okay, it's not like, hey you submit something and we throw it over the fence. We actually give feedback. In fact there's a whole process here. So first of all, this year for example, we had over 1,200 submissions and we picked 200. That's all we can afford. Think about the acceptance rate right there. That is on par, if not better than most top notch technical conferences. So there is a very high bar, okay. And by the way, the stuff that doesn't get picked can still continue. If not, maybe refine it and do better next year, maybe they'll continue some of it, >> [John] Or join in someone else in the team. >> Yeah, exactly, yeah. >> You allow for people to come together. >> Of course, people can come together and it's completely informal, we don't mandate who comes together, they can come together. And once they get selected by the way, the other part of this is actually helping the engineers double up as public speakers and presenters also. You know, a lot of us engineers particularly like to sit in their black box, they're sitting up their coding on a daily basis. Here's an opportunity for them to actually go out and present their ideas to a broad forum. And we actually, part of it is we help coach them and build them into good presenters as well as part of this process. So for them it's a personal development experience. This competitive dynamic by the way is what actually holds up the bottom quality for Radio. It actually has no negative value. It's not like if you don't get selected this year there is a bad feeling or anything. You can try again next year, and to new people every year. >> It's a pride just to be a part of it. >> Exactly. >> And succeeding the bar is a big accomplishment internally. >> Yes, yes, and frankly by the way out of these 1,200 submissions or so in addition to the papers that get accepted here about 200 of these actually are invention disclosures that eventually find their way into patents over time too. So there's other ways that these things get moved forward. >> There's a social benefit also a personal benefit to grow. >> Absolutely. >> And you have the patent option. >> And the networking that comes here, the most important part. I don't know if you saw the poster session yesterday, I mean, the energy in the room is just phenomenal. The people are there who are really passionate about talking about their work, and people are there wandering and you meet new people. In fact, for me in my world, what I enjoy the most is of course getting to hear what these guys are doing but also helping to make connections. Because I sort of look at all of R and D and then somebody here is doing something, in fact I will give you an example. There was somebody who was figuring out how to do, the topic was called teleportation, but it was really about fast data movement. So this was a team in our core virtualization platform. And then I said hey, there's this other team that is focused on hyper-connectivity, you guys should connect because they're actually building a product that could leverage what you do. So you make those informal connections here and then off they run. >> You know it's interesting. Ray Alferil and I were talking about the confluence of these markets coming together. You guys started out in a data center, you got cloud, AI now, which is big data, and now block chain, really interesting stuff you guys are doing with block chain. We were talking off camera and I talked with some of your folks, you guys are already eyeing that way pretty heavily and I know there's work going on there. But in the intersection of infrastructure, AI, cloud, block chain and decentralized applications is a lot of really important stuff. This is the confluence, this where it all has to mash together, the mash up of security, IOT and data. Not big data, or AI. Data hits everything, security hits everything, IOT is hitting everything. So do you have to tweak your R and D focus? How do you guys manage these changing confluences? >> Yes, we are constantly adapting and evolving what we do. It's never static. I will give you an example from recent times. When we call it networking we find we constantly find software to find networking. And we came on initially, it was all about data center. It was about how to, you know, connect and secure applications inside data centers. Then we saw the world changing. Applications are moving out to the public cloud and then more recently applications are moving to the edge to your earlier point. So what did we do? We took that networking mission, we expanded it to now include public clouds, include the edge, and that's what we just launched recently. So that's an area where things are dynamic, our innovation moves on. As I do believe the edge is gonna be one of the next big areas of investment and opportunity. And security is pervasive across the board. So our vision now encompasses security everywhere. All the way from your mobile device, to the edge, to branch offices, to the public cloud, and to your data centers. Anywhere where you have applications running data sitting, and users, you gotta secure that. >> What's the big waves? Pat Gelser's gonna come on soon and he always talks about the waves of innovation. If you're not out in front of the next wave you're driftwood, his famous quote on theCUBE years ago. You gotta pick the big waves obviously, you see block chain as a great call, cloud, no brainer, you're there. Data center, you've been there entrenched. You got AI, I know you guys are working on stuff. Are those the waves you're on, is there a new wave that no one's seeing, and how do you guys look at that? >> Of course it's all adjacent right? Edge computing is adjacent to what we do, and IOT so that's obviously a big area for us. Telcos, for us, you may not necessarily think of it as innovation but they are actually redoing how they do their entire infrastructure. And that's a great opportunity for us. At the end of the day, there's two things. We have innovation and innovation is correlated to also to what markets we can go after that are new and driving committal business for us. So the edge and Telco in our view are two big big opportunities for us. >> You guys are doing a great job. World class organization, it's fun to watch. It's a pleasure to interview such great smart people here. Rajiv you're one leading the team. My final question I want to ask you for the folks watching who don't work at VMware describe what it's like to work here. What's the DNA of the culture? Explain the dynamic, 'cause it's like a kid in a candy store in here if you're an engineer. Explain what's goin on. >> Look, the things that I continue to be impressed by here, and I have been here about two and a half years is the quality and depth of the engineering talent we have and the willingness to work on difficult and interesting problems. And also share that across the board. There is no, very rarely do we have people sitting isolated that go off and do something. People are willing to share. We work as a community together. That really really stands out. I worked at many companies and I have to say, no other company really creates this kind of culture of innovation where we bring all these people together. This event, Radio is absolutely unique. I have not really seen it at this scale anywhere else. >> It's a great use case of world class in a modern era. I think you guys have the secret, engineering and community focus has been a key backbone for you guys. >> The other thing, by the way, I will say is, engineers feel that their ideas are valued, and they are actually used. Something that starts out, you know, in a very small way actually could end up getting a lot of visibility. I will give you an example. Out of our Ballithon last year or so somebody came up with the idea of using a virtual reality headset to figure out how you can actually manage your entire data center using virtual reality and pick and place. >> [John] That's great for working at home. >> Cool, right? This just came out of a two day hackathon session. And what did we do with that? Well, we did that, I took that and made it a demo center stage at VM world and all our VM forums across the world And all of us by the way, Pat, myself, we were all sitting out there doing virtual reality demos built on what a couple of engineers had done in two days. Great visibility. Now that's not gonna go into a product anytime soon I think but it's a cultural thing. >> It's a cultural example of grassroots innovations sparks of innovation can come from anywhere. >> That's right. >> Rajiv, thanks for coming on, appreciate it. This is theCUBE's coverage here in San Francisco for Radio 2018, its 14th year annual event it's turning into quite the showcase for flexing and also stretching the minds of the smartest people in VMware. Of course theCUBE's here on the ground. I'm John Furrier. Back with more coverage after this break. Stay with us. (digital music)

(energetic music) >> [Narrator] From San Francisco, it's theCUBE, covering Radio 2018. Brought to you by VMware. >> Hello everyone. Welcome to the special CUBE coverage here in San Francisco, California for VMware's Radio 2018 event. This is their R&D big event kickoff. It's like a sales kickoff for engineers, as Steve Herrod said on stage. Out next guest is Mornay Van Der Walt, VP of the Explore Group, Office of the CTO. Also, program chair of the Event Today Conference, working for the collective of people within VMware on a rigorous selection committee for a high bar here at your event. Welcome to theCUBE. Thanks for joining me. >> Thank you. >> Talk about the event, because I know a lot of work went into it. Congratulations, the talks were amazing. I see the schedule. We have Pat Gelsinger coming on later today. We just had Ray O'Farrell on. This is like the, I don't want to say, Burning Man of Vmware, but this is really a recognition, but also really important innovation. Take a minute to talk about the process that you go through to put this together. It's a fantastic event. The smartest minds, the cream rises to the top. It's hard, it's challenging, it's a team effort, but yet you gotta ride the right waves. >> Right. So, RADIO: R&D Innovation Offsite. And as you said, it is tough because we've got this huge R&D community and they've all got amazing ideas. So they get the opportunity to submit ideas. I think this this year we have over 1,700 ideas submitted, and at the end of the day we're only going to showcase 226 of those ideas across research programs, posters, breakout sessions, Just-In-Time BOFs, Birds Of a Feather. You know, so, the bar is high. we've got a finite amount of time, but what's amazing is we take these ideas, and we don't just showcase them at RADIO. We have four other programs that give us the ability to take those ideas to the next level. So when we think about the innovation programs that come out of OCTO, this is really to drive what we call "Off-Road Map Innovation." So Raghu and Rajiv, with our Product Cloud Services Division, are driving road map, zero to three years out the stuff that you can buy from sales, >> [Furrier] Customer centric? >> Customer centric, yeah. OCTO is providing an innovation program structure, these five programs: Tech Talks, Flings, Borathons, RADIO, and xLabs, and as a collective, they are focused on off-road map innovation. Maybe something that's-- >> Give me an example of what that means, Off-Road Map. >> Sure. So last year at RADIO we did a paper that was showcased on functions as a service. So you think of AWS Lambda, right. [Furrier] Yep, yep >> VM was uniquely positioned, with the substrate, to manage and orchestrate VM's containers and whynot functions. So this radio paper was submitted, I then, as the xLabs group, said we're going to fund this, but given where we are in this market, we said, "Alright, we'll fund this for 12 months." So, we're incubating functions as a service. In July/August time frame, that'll actually exit xLabs into the Cloud Native business. >> It's a real rapid innovation. >> Very rapid. >> Within a 12 month period, we're gonna get something into a BU that they can take it to market. >> Yeah, and also I would say that this also I've seen from the talks here, there's also off-road map hard problems that need to kind of get the concepts, building blocks, or architecture... >> [Van Der Walt] Correct. >> With the confluence of hitting, whatever, its IOT or whatever, blockchains, seeing things like that. >> [Van Der Walt] Yeah. Correct. >> Is that also accurate too? >> Very true. And, you know, Ray had a great slide in his keynote this morning, you know, we spoke about how we started in 2003, when he joined the company, it was all about computer virtualization. Fast-forward 15 years, and you look at our strategy today, it's any Cloud, any device, any app, right? Then, you gotta look to the future, beyond there, what we're doing today, what are the next twenty years going to look like? Obviously, there's things like, you know, blockchain, VR, edge computing, you know, AIML... >> [Furrier] Service meshes? >> Services meshes, adaptive security. And, you know, people say, "Oh, AIML, that's a hot topic right now, but if you look back at VM ware, we've been doing that since 2006. Distributed resource scheduler: a great example of something that, at the core of the product, was already using ML techniques, you know, to load-balance a data center. And now, you can load-balance across Clouds. >> It's interesting how buzzwords can become industry verticals. We saw that with Hadoop; it didn't really happen, although it became important in big data as it integrates in. I mean, I find that you guys, really from the ecosystem we look at, you guys have a really interesting challenge. You started out as "inside the box," if you will. I saw your old t-shirt there from the 14 year history you guys have been doing this event. Great collection of t-shirts behind me if you can't see it. It's really cool. But infrastructures, on premise, you buy, it's data center, growth, all that stuff happened. Cloud comes in. Big data comes in. Now you got blockchain. These are big markers now, but the intersection of all these are all kind of touching each other. >> [Van Der Walt] Correct. >> IOT...so it's really that integration. I also find that you guys do a great job of fostering innovation, and always amazed at the VM world with some great either bechmarks or labs that show the good stuff. How do you do it? Walk me through the steps because you have this Explorer program, which is working. >> [Van Der Walt] Yeah >> It's almost a ladder, or a reverse ladder. Start with tech talks, get it out to the marketplace... >> [Van Der Walt] Do a hackathon. >> Hackathon. Take us through the process. So there's four things: tech talks, borathons, which is the meaning behind the name, flings, and xLabs. >> Correct >> Take us through that progression. >> ... and RADIO, of course. >> And RADIO, of course, the big tent event. Bring it all together. >> So, I'm an engineer. I have a great idea. I wanna socialize it; I wanna get some feedback. So, at VMWare, we offer a tech talk platform. You come, you present your idea. It's live. There'll be engineers in the audience. We also record those, and then those get replayed, and engineers will say, "You know, have you thought about this?" or "Have you met up with Johnny and Mary?" They're actually working on something very similar. Why don't you go and, you know, compare ideas? I can actually make that very real. I was in India in November, and we were doing a shark tank for our xLabs incubator, and this one team presented an idea on an augmented reality desktop. We went over to another office, actually the air watch office, and we did another shark tank there. Another team pitched the exact same idea, so I looked at my host, and I said, "Do these two teams know each other?" and the guy goes, "Absolutely not," so what did we do? We made the connection point. Their ideas were virtually identical. They were 25 kilometers apart. Never met. >> [Furrier] Wow. >> You know, so when, that's one of the challenges when your company becomes so big, you've got this vast R&D organization that's truly global, in one country 25 kilometers apart, you had two teams with the same idea that had never met. So part of the challenge is also bringing these ideas together because, you know, the sum of the parts makes for a greater whole. >> And they can then collectively come together then present to RADIO one single paper or idea. >> [Van Der Walt] Absolutely, or go ahead and say, you know what, let's take this to the next step, which would be a borathon, so borathons are heckathons. >> Explain the name because borathon sounds like heckathon, so it is, but there's a meaning behind the name borathon. What is the meaning? >> Sure. So, our very first build repository was named after Bora Bora, and so we paid homage to that, and so, instead of saying a heckathon, we called it a borathon. And one of our senior engineers apparently came up with that name, and it stuck, and it's great. >> So it's got history, okay. So, borathons is like ... okay, so you do tech talks, you collaborate, you socialize the idea via verbal or presentation that gets the seeds of innovation kinda planted. Borathon is okay, lets attack it. >> Turn it into a prototype. >> Prototype. >> And it gets judged, so then you get even more feedback from your most senior engineers. In fact ... >> And there's a process for all this that you guys run? >> Yeah, so the Explorer groups run these five innovation programs. We just recently, in Palo Alto, did a theme borathon. Our fellows and PE's came together. Decided the theme should be sustainability, and we mixed it up a little bit. So, normally, at a borathon, teams come with ideas that they've already been developing. For this one, the teams had no idea what the theme was going to be, so we announced the theme. Then, they showed up on the day to learn what the five challenges were going to be, and some of those challenges, one of them was quite interesting. It was using distributed ledger to manage microgrids, and that's a ... >> A blockchain limitation >> Well, it's a project that's, you know, is near and dear to us at VMWare. We're actually going to be setting up a microgrid on campus, and if you think about microgrids, and Nicola Acutt can talk more to this, we're gonna be looking at, you know, how can we give power back to the city of Palo Alto? Well, imagine that becoming a mesh network. >> [Furrier] With token economics. >> How do you start tracking this, right? A blockchain would be a perfect way to do this, right? So, then, you take your ideas at a borathon, get them into a prototype, get some more feedback, and now you might have enough critical mass to say, "Alright, I'm going to present a RADIO paper next year." So, then, you work as a team; get that into the system. >> [Furrier] And, certainly, in India and these third-world countries now becoming large, growing middle-class, these are important technologies to build on top of, say, mobile... >> [Van Der Walt] Absolutely. >> And with solar and power coming in, it's a natural evolution, so that's good use case. Okay, so, now I do the borathon. I've got a product. Flings? >> It's a prototype, right, so now ... >> You can socialize it, you have a fling, you throw it out there, you fling it out there What happens? >> Yeah, so, I've done something at a borathon. It's like, I want to get some actual feedback from the ecosystem: our customers and partners. That example I used with vSAN. You know, vSAN launched. We wanted to get some health analytics. The release managers were doing their job. The products got a ship on the state. Senior engineers on the team got a health analytics tool out as a fling. It got incredible feedback from the community. Made it into the next release. We did the same with the HTML clients, right? And that's been in the press lately because, you know, we've got Rotoflex. Now, there's HTML, but that actually started - two teams started working on that. One team just did HTML >> a very small portion of the HTML client, presented a RADIO paper. Two years later, another team, started the work, and now we have a full-fledged HTML client that's embedded into the VIS via product. >> [Furrier] So, the fling brings in a community dynamic, it brings in new ideas, or diversity, if you will. All kinds of diverse ideas melting together. Now, xLabs, I'm assuming that's an incubator. That brings it together. What is xLabs? Is that an incubator? You fund it? What happens there? >> So with an xLabs, the real way to think about it, it's truly an incubator. I don't want to use the word "start-up" there because you've clearly got the protection of the larger VMware organization, so you're not being a scrappy start-up, but you've got a great idea, we see there's merit ... >> [Furrier] Go build a real product. >> We see it more being on the disruptive side, and so we offer two tracks in the xLabs. There's a light track, which typically runs three to six months, and you're still doing your day job. You know, so you're basically doing two jobs. You know, we fund you with a level of funding that allows you to bring on extra contracting, resources, developers, etc., and you're typically delivering one objective. The larger xLab is the full-track, so functions as a service. Full-track, we showcased it as a RADIO paper last year. We said, "Alright, we're going to fund this. We're going to give it 12 months worth of funding, and then it needs to exit into a business unit," and we got lucky with that one because we were already doing a lot of work with containers, the PKS, the pivotal. >> [Furrier] Do the people have to quit their day job, not quit their day job, but move their resource over? >> [Van Der Walt] Absolutely. >> The full-track is go for it, green light >> Yep >> Run as fast as you can, take it to this business unit. Is the business unit known as the end point in time? Is it kind of tracked there, or is it more flexible still. >> Not all the time. You know so sometimes, with functions it was easier, right? So, we know we've got pull for zone heading up Cloud native apps. The Cloud native business unit is doing all the partnerships with PKS. That one makes sense. >> [Furrier] Yeah. >> We're actually doing one right now, another xLabs full, called network slicing, and it's going to play into the Telco space. We've obviously got NFV being led by Shekar and team, but we don't know if network slicing, when it exits, and this one is probably going to have a longer time arise and probably 24-36 months. Does it go into the NFV business unit, or does it become its own business unit. >> [Furrier] That's awesome. So, you got great tracks, end to end, so you have a good process. I gotta ask you the question that's on my mind. I think everyone would look at this, and some people might look at Vmware as, and most people do, at least I do, as kind of a cutting-edge tier one company. You guys always are a great place to work. Voted as, get awards for that, but you take seriously innovation and organic growth in community and engineering. Engineering and community are two really important things. How do you bring the foster culture because engineers can be really pissed off. "Oh my god! They're idiots that make the selection!" because you don't want engineers to be pissed cuz they're proud, and they're inventing. >> Yep, yep. >> So, how to manage the team approach? What's the cultural secret in the DNA that makes this so successful over 14 years? >> So, before I answer that question, I think it's important to take a step back. So, when we think about innovation, we call this thing the Vmware "innovation engine." It's really three parts to it, right? If you think about innovation at its core: sustaining, disruptive, internal, external, And, so, we've got product Cloud Services group, Raghu and Rajiv, we've got OCTO, headed up by Ray, we've got corp dev headed up by Shekar. Think of it as it's a three-legged stool. You take one of those legs away, the stool falls over. So, it's a balancing act, right? And we need to be collaborating. >> [Furrier] And they're talking to each other all the time. >> We're talking to each other all the time, right? Build or buy? Are we gonna do something internal, or we gonna go external, right? You think something about acquisitions like Nicira, right? We didn't build that; we bought it. You think about Airwatch, right? Airwatch put us into the top right quadrant from Gartner, right? So, these are very strategic decision that get made. Petchist presented at Dell emc world, Dell Technologies world. He had a slide on there that showed, it was the Nicira acquisition, and then it sort of was this arc leading all the way up to VeloCloud, and when you saw it on one slide, it made perfect sense. As an outsider looking in, you might have thought, "Why were they doing all these things? Why was that acquisition made? But there's always a plan, and that plan involves us all talking across. >> [Furrier] Strategic plan around what to move faster on. >> Correct >> Because there's always the challenge on M&A, if they're not talking to each other, is the buy/build is, you kinda, may miss a core competency. They always ... what's the core competency of the company? And should you outsource a core competency, or should you build it internally? Sometimes, you might even accelerate that, so I think Airwatch and Nicira, I would say, was kinda on the edges of core competency, but together with the synergies ... >> [Van Der Walt] Helped us accelerate. >> And I think that's your message. >> [Van Der Walt] Yep. >> Okay, so that's the culture. How do you make, what's the secret sauce of making all this work? I mean, cuz you have to kinda create an open, collaborative, but it's competitive. >> [Van Der Walt] Absolutely. >> So how do you balance that? >> You know, so clearly, there's a ton of innovation going on within the prior Cloud services division. The stuff that's on the truck that our customers can buy today, alright? We also know we gotta look ahead, and we gotta start looking at solving problems that aren't on the truck today, alright? And, so, having these five programs and the collective is really what allows us to do that. But at the same time, we need to have open channels of communication back into corp dev as well. I can give you examples of, you know, Shekar and his team might be looking at Company X. We're doing some exploratory work, IOT, I did an ordered foray. IOT is gonna be massive; everybody knows that, but you know what's going to be even more massive is all the data at the edge, and what do you do with that data? How do you turn that data into something actionable, right? So, if you think about a jet engine on a big plane, right? When it's operating correctly, you know what all the good levels are, the metrics, the telemetry coming off it. Why do I need to collect that and throw it away? You're interested in the anomalies, right? As we start thinking about IOT, and we start thinking all this data at the edge, we're going to need a different type of analytics engine that can do real-time analytics but not looking at the norm, looking at the deviations, and report back on that, so you can take action on that, you know? So, we started identifying some companies like PubNub, Mulesoft, too, just got acquired, right? Shekar and his team were looking at the same companies, and was like, "These companies are interesting because they're starting to attack the problem in a different way. We do that at Vmware all the time. You think about Appdefense. We've taken a completely different approach to security. You know what the good state is, but if you have a deviation, attack that, you know? And then you can use things like ... >> It's re-imagining, almost flipping everything upside-down. >> Yeah, challenging the status quo. >> Yeah, great stuff, great program. I gotta ask you a final question since it's your show here. Great content program, by the way. Got the competition, got the papers, which is deep, technical coolness, but the show is great content, great event. Thanks for inviting us. What's trending? What's rising up? Have you heard or kind of point at something you see getting some buzz, that you thought might get buzz, or it didn't get buzz? What's rising of the topics of interest here? What's kind of popping out for you; what's trending if I had to a Twitter feed, not Twitter feed, but like top three trending items here. >> Well, I'll take it back to that last borathon that we did on sustainability. We set out the five challenges. The challenge that got the most attention was the blockchain microgrid. So, blockchain is definitely trending, and, you know, the challenge we have with blockchain today is it's not ready for the enterprise. So, David Tennenhouse and his research group is actually looking at how do you make blockchain enterprise ready? And that is a difficult problem to solve. So, there's a ton of interest in watching ... >> [Furrier] Well, we have an opinion. Don't use the public block chain. (both laugh) >> So, you know, that's one that's definitely trending. We have a great program called Propel, where we basically attract the brightest of the brightest, you know, new college grads coming into the company, and they actually come through OCTO first and do a sort of onboarding process. What are they interested in? They're not really interested in working for a particular BU, but, you know, when we share with them, "You're gonna have the ability to work on blockchain, AI, VR, augmented reality, distributed systems, new ways of doing analytics >> that's what attracts them. >> [Furrier] And they have the options to go test and put the toe in the water or jump in deep with xLabs. >> Absolutely >> So, I mean, this is like catnip for engineers. It draws a lot of people in. >> Absolutely, and, you know, we need to do that to be competitive in the valley. I mean, it's a very hard marketplace. >> Great place to work. >> You guys have a great engineering team. >> Congratulations for a great event, Mornay, and thanks for coming on theCUBE. We're here in San Francisco for theCUBE coverage of RADIO 2018. I'm John Furrier. Be back with more coverage after this break. Thanks for watching. (upbeat techno music)

>> From San Francisco, it's theCUBE. Covering Radio 2018. Brought to you by VMware. (lively electronic music) Hello everyone and welcome to special Cube coverage here in San Francisco, California. We're at VMware's Radio 2018 event. This is their annual R&D event where all the best people, smartest people, come together to collaborate on new projects, new innovations. Not imitation, innovation. Had great speakers up there. They had Steve Herrick, Cube alumni, now a venture capitalist, formerly CTO of VMware. And our first guest here today is Ray O'Farrell, executive vice president and CTO of VMware, been on theCUBE before. Great to see you, thanks for joining us. >> Great to see you, good morning. >> So I love this event 'cause it's, like you mentioned before we came on camera, Steve Herrick said it's like a sales kick-off for engineers. >> Correct yeah, yep. >> Which is like a rah, rah but also, you know, really motivating, but also putting out the north star. >> [Ray] Yep. >> Which is the innovation message. >> [Ray] Correct. >> So take minute to talk about what this event is. Explain to the folks, what is Radio 2018? There's a lot of history involved here. >> [Ray] Yep. >> Behind us is a t-shirt row of, you know, key milestones of VMware history. You know, think inside the box, now it's, think inside the cloud. What's this event about? >> So, um, the event has quite a few years. This is like the 14th year we've done this, right? And when it started, what it was really focused on was, in some ways, a recognition that, as the company begins to grow, as you begin to build new products and engage in new partnerships, In order to keep innovation alive, you almost need to manage it. The problem is you can't manage innovation. Almost by, you know, by definition it's something chaotic. It's an inspirational idea. It's something that was not expected. That's what makes it innovation. But what you can do, is you can create a culture which promotes that innovation or creates opportunities for those ideas to emerge. Or when those ideas do emerge, make sure there's a place for them to be heard and there's an opportunity for a network to build around them. And Radio is a part of that. We have lots of other programs in VMware to help keep driving that culture of innovation, but Radio is probably the primary one. >> Talk about some of the history from this event. What has come out of these events? 'Cause I wanna get into some of the specific questions around how R&D works these days vis-a-vis how it used to work. But, specifically, what has come out of these events? Can you point to any things that kind of popped out? Because R&D, I won't say hit or miss, but it's the idea is to experiment and try new things and nail it. What has come out of VMware's Radio years of history? >> Yeah, so, very practically, we get a lot of patents out of Radio. That's just a very practical sense. As people are building up the papers, as they're looking at the ideas they want to drive, as they work with different teams to build prototypes. Quite a few times people do that at Radio when they're making a presentation. They'll generate ideas, invention disclosures, which generate new patents. This show alone, even though we just actually entering the show at this stage, has already generated about nearly 240 IDFs. A lot of those have the potential to become patents. So it's very, very practical and pragmatic about the generation of patents and new ideas. When you look at the products side of things, quite often what you see at Radio is not necessarily a new product in a whole new area. What you tend to see is, we have existing technologies bubbling in different spaces and now, because you're able to bring these teams together, somebody gets an idea that says, Oh, I can combine machine learning with what we're doing in terms of logging and now I've got an interesting product to help support our customers, you know, deal with real world problems. >> So, it's not take that hill, build me a blockchain product, it's more of, take a step back, zoom back, look at the big picture, understand the fusion of where things are coming together, look at architecture. Is that kind of the-- >> Yeah, actually, sometimes there is the, take that hill, take the blockchain product, but quite often, it starts as something small. You have a Radio event where somebody will say blockchain is cool and interesting. Here's how you run it in a more efficient fashion on vSphere, something like that. And that would be a poster session. And it's only then when somebody sees that that says, I can really run blockchain on vSphere? Can I do it better even now it's physical in some way? And that's when the story emerges. So you don't necessarily see the product announcement coming from Radio itself. What you see is the core of that idea and then a few months later, or the next major VMWorld, or two VMWorlds out, you begin to see these things emerging. >> It's like you're creating sparks of innovation, throw onto the fire, create some action. >> That's exactly the way it works. You know, things like, a lot of stuff what we do in containers. You know, the VMware integrated containers, the combination of containers and VMs from a security point of view. You can trace a lot of that back to ideas that were generated for Radio. And it's pretty rigorous. People have to go through, submit papers, there's a submit ideas. And, you know, our most senior engineers crawl all over those and critique them and so, you know-- >> So it's competitive? >> Oh, it's very competitive. That it is, in many ways, it's a mark of honor to be invited to Radio or to present a paper and so people fight very hard to do so. >> Built in gamifications called just be smart and show some good papers. >> Yes, it's a little bit tougher today. >> How much goes into the prep for this? Because obviously that's a great bar. You guys set a high bar, high is great. And it's a great place here for people to stretch and flex their technical muscle. >> Yep. >> What's the process? How do people get to that bar? Do they collaborate? Is there meet-ups? Is there organic processes of top-down? How do you guys handle it? >> So we've a lot of different processes or programs around driving innovation, but when you look at Radio itself, and it leverages some of those others, but when you look at Radio itself, basically we create a Radio committee. The one for next year will be starting somewhere in the next couple of weeks, right? We create a Radio committee. It is typically driven by members of the office of the CTO, but works and pulls in our fellows, our principle engineers, and we form a committee which really splits into two different directions. One of which is all around the technical papers, the presentations which are gonna be presented later here today. And another one which focuses around how do you do the keynotes? How do you get invited speakers? How do you create this inspirational, you know pervasive sense of innovation. And so you have those two groups working, while cooperating somewhat independently of each other. And it takes a long time. So for instance, only about 15% of the papers which are actually submitted are presented here. So there's a lot of work going through, scanning those, combining those. One of the most exciting things you can do at VMware is, if you go back somewhere in around the February timeframe, all of our most senior engineers sit in one of our largest conference rooms with a bunch of engineers submitting papers and so on, and there is a lively debate working through paper after paper, idea after idea, and saying is this a good thing for Radio? Is this original? Hey, nobody else thought of that. What we gonna be able to do to do that? Or, in some cases, saying these two people, one from Bangalore, one from Bulgaria, we've earned these sites all over the world, these ideas look similar. Can we get those guys to talk to each other? And see what comes out of that. >> So it's kind of a team-building exercise. At the same time, pre-innovation, but it's interesting. You've mentioned you've got the challenge of the papers, which is, you know, get the accuracy on the facts, original content, original ideas. >> [Ray] Correct. >> And then the content program for the event has to be inspiring and motivating at the same time Two different things, but two design standards for you guys. >> Yeah. And, you know, we need to combine them both and, 80% to 90% of the people who are here are hardcore R&D engineers. Their day job is to write code, produce product, archetype product, right? And, you know, if you haven't worked with a group of senior engineers, they are not going to be tolerant of presentations which, oh, we saw that before-- >> [John] Or fluff. >> Or fluff, right. They want to get hardcore into the meat. In fact, the presentations that you see that get some of the highest ratings, tend to be those that are deeply technical in nature. You know VMware's software base is primarily systems software, systems engineering. They expect to see deeply technical solutions to how to attack some real world problems. >> You guys do have some smart people. It's great to have you on theCUBE. This is our ninth year doing VMWorld. Great to start coming in to the more technical events. It's fantastic. The question I gotta ask for you is, Pat Gelsinger always says on theCUBE, he's says on theCUBE a few times, but consistent theme, you gotta get out in front of that next wave or you're driftwood. To the point of, don't just take that point product at view, jump on the wave. And the wave is all about the next 10 years or 20 years. What is the wave that you guys are, that you would categorize, obviously Cloud is key, but as you have the hyper-convergence and the on-premise private cloud boom and VSAN's great. We've seen great results from that. The cloud's right there. You've got Amazon, you got Microsoft, kicking butt on the numbers. As the R&D tries not to get caught up into the fashionable day to day, you can have the long view. >> [Ray] Yeah. >> What's the wave for the long view? >> So I think there's two waves we're looking at. One of them is you need to spend a lot of time with customers and understand what their agenda is. What their innovation agenda is. You look at that, you see, you know, products popping up. How will I leverage AI in a new and interesting way? How will I do something with Blockchain? You know, I want to run AI algorithms, I need different hardware and different management software to do that. So we focus on those and make sure we're doing that. But perhaps, more importantly, I think when you begin to look at what's happening with the industry right now, you know, you saw private cloud, you saw public cloud, you see how you connect these together. It's actually that connectivity is going to be important. You know, I believe you're going to see the emergence of Edge infrastructure, but isolated? That's not powerful. Now combine that Edge infrastructure with how you can leverage what's going into the public cloud or how you're going to be able to secure all these in a way that falls back into, you know, even Teleco in some way. You're now beginning to see this synergy across all of those things. And I think, you know, that's where our sweet spot is. We know how to deal with those hard, how do I connect things together? How do I manage complex different piece of systems software? So that's where we're gonna see it. >> Well, it's great stuff. One of the benefits of being so close to VMware over the past nine years, and I was showing you some of our online data analysis. When I look at the VMware ecosystem, the interesting see the evolution and kind of the journey, 14 years. And looking at the milestones. Clearly, infrastructure, on-premise data center. And then you saw that emergence of clouds. You start to see these markets emerge. Cloud, big data comes on the scene. Data warehouse in the infrastructure. Now, that's AI, cloud is bigger. All kind of taking a little bit off the infrastructure, kind of squeezing that down, but it moves up into the Cloud. And now you've got that, over the top, Blockchain, cryptocurrency, decentralized applications. In the middle of these circles, is security, IOT, and data. >> Correct. >> You guys are right there, so I have to ask you, because they're all, the confluence of all of those are coming together. You're not up here playing Blockchain, although there's some stuff we can get into. You got some AI influencing. So, in the center of infrastructure, Cloud, AI, and Blockchain, etc. is security data, IOT. How is that coming together? What's the R&D task? >> So, actually, I think the key word you used there was confluence. You cannot really look at these as independent things. And, you know, so our focus is what does it mean to be, essentially, the infrastructure. The infrastructure management story for that new form of multi-Cloud, Edge, IOT type of narrative. So our role there is, we believe security is one of the key things to focus on. And we believe that, in that new world, connectivity is a key part of what goes on. The Edge was taught to the Cloud. The Cloud was taught to the Teleco. The Teleco was taught to the IOT. >> [John] They need power. >> Right. They need power, they need communication. They need those things. So a lot of the time, a lot of where we focus comes back to intersects. We do believe that software-defined networking is a key way of being able to deliver a new fluidity of when you get that confluence. And intersects very quickly brings you into security. That's how you begin to understand how you isolate those components, understand what you need to do to detect. When that Edge IOT device is not even the device you think it is. Somebody might have replaced it. That's where you begin to be able to see the communications as a result sort of from that. So security is key, interconnectivity is key, and you know, when we speak about IOT itself, I've got kind of a dual role at VMware. While I'm the CTO at VMware, I also focus on IOT for Dell Technologies. And when we look at that, you know, today many of the examples of IOT are very narrow, almost point, solutions. The real power will come when you begin to combine across those solutions. You know, the thing that tells you the weather, the thing that tells you the traffic, and then the thing that tells you, you know, what's the best way to get there in your car, or whatever it is. Combine those things, now you gotta secure all that. 'Cause you're sharing information. >> [John] It's super exciting. It's probably the best time to be doing R&D because Dave Vellante and I always talk about on theCUBE all the time, that, you know, if everything was Cloud operations, because the confluence is happening, what is IOT? >> [Ray] Yep. >> You have a thin Edge, could be a windfarm, traffic signal, sensor network, or it could be a data center. The data center could be an Edge. I mean, you could look at it any way, it depends on how you look at it. >> One of the biggest questions that comes up all the time is what exactly is the edge, right? And I think, you know, it means different things within different industries. It's very clear on the extreme edge. That's a device, it's a windfarm, it's measuring the behavior of a robot, or something like that. And it's very clear on the other side. That's a Cloud, I run a bunch of analytics over there. It's the interesting piece in the middle where it is both, you know, a lot of opportunity and a lot of, you know, difficulty defining it. Is the SD1 server inside of an office, is that edge? Yeah, that looks like edge, it's at the edge of the network. But it's not controlling something physical. But that SD1 server inside in a retail store, may well also be doing something with the refrigerators or the cold chain or something in that store. And now you begin to see it more as kind of an IOT device. >> That's awesome, and it's great conversation. Certainly fodder for more R&D and more innovation and the management site's key. And, I think the holy grail on all this is programmable networks, right? Come on, we've been waiting. How fast is that coming, pedal harder, come on. I know you've got to go thanks for coming on. >> But I do wanna ask you, you guys are, I wanna give you some props and just get your thoughts on obviously Blockchain. We see things like Filecoin had a very huge ICO on the IPFs side, but, you know, they didn't really have a product, but they're promising, hey, store using decentralized, we have them in the Blockchain. Obviously, it's a network storage infrastructure, it's not so much selling tokens with token economics, although it does have a piece of it. That's gonna impact you guys on the horizon. What's the current state of you guys view, your view, the team's view of Blockchain-- >> Of Blockchain? Obviously, a lot of the hype and even some of the valuations and things you see are tied to what's happening on the financial side. Bitcoin, and so on. We're not focused on that at all. What we're saying is Blockchain, or more specifically, a distributed hyper-ledger, forms the basis of a community of companies or organizations being able to, essentially, look at trust as a service. I've got a contract with you, we're now able to look across a group of companies and say we all agree, that contract is valid because of our leverage of this blockchain. That then becomes an application story. How do I run it more efficiently? How do I make sure I run it securely? How do I make sure that that community is able to leverage that service in a shared fashion? And that's what we're focused on. In fact, one of the more interesting things is when you look at things like Blockchain, when it's used in the context of something like Bitcoin, there's a degree what people value is an anonymity. We don't know who bought it, but somebody bought it. But when you look at it from a trust point of view, we actually want to be able to see who exactly did the contract. I agree that you put the contract, we worked the contract together, and we're all agreeing with that. So you see these changes when you begin to bring these technologies into enterprise. >> Efficiencies come, big time-- >> Correct. >> On supply chain. >> Exactly. Actually, we've put a lot of focus on efficiencies. We've got a research team whose job has been very focused on, given Blockchain, how do I improve the core algorithms? How do I make them more applicable to something that'd be run by a typical enterprise, or by a group of enterprises? And, you know, that's a little bit unusual for us because we're entering a kind of an application space, but what's good about this application space, it is hard systems engineering. And that's what we know how to do and that's why we think this is a great application space for us to be able to deliver real value. >> And the key word is engineering, you also mentioned earlier, community. Open Source has brought this community dynamic together where there's no middle men. This is the beautiful thing of the future infrastructure. How do you manage it? How do you make it secure trust as a service. >> Yes. >> You guys are doing a great job. Based on our data, you are on the ecosystem. You guys have all the waves covered. >> Okay. >> Ray thanks for coming on. >> Great, thank you very much. >> I appreciate the conversation. I'm John Furrier, here in San Francisco for VMware's Radio 2018. 14th year of their annual engineering kick-off, motivation, hardcore engineering critique, and also collaboration where the sparks of innovation are happening. Be right back with more. Thanks for watching. (lively electronic music)