>>Welcome back everyone to Cube's live coverage, VMware Explorer, 2022 formerly world. I've been saying now I gotta get that out. Dave, I've been sayingm world. It just kind of comes off the tongue when I'm tired, but you know, wall to wall coverage, again, back to back interviews all day two sets. This is a wrap up here with the analyst discussion. Got one more interview after this really getting the analyst's perspective around what we've been hearing and seeing, observing, and reporting on the cube. Again, two sets blue and green. We call them here on the show floor on Moscone west with the sessions upstairs, two floors of, of amazing content sessions, keynote across ed Moscone, north and south SBI here, cloud strategists with the cube. And of course, what event wouldn't be complete without SBE weighing in on the analysis. And, and, and I'm, you know, all kidding aside. I mean that because we've had great interactions around, you know, digging in you, you're like a roving analyst out there. And what's great about what you do is you're social. You're communicating, you're touching everybody out there, but you're also picking up the puzzle pieces. And we, you know, of course we recognize that cuz that's what we do, but you're out, we're on the set you're out on the floor and you know your stuff and, and you know, clouds. So how you, this is your wheelhouse. Great to see you. Good to >>See you. I'm good guys. Thank you. Thank you for having >>Me. So I mean, Dave and I were riffing going back earlier in this event and even before, during our super cloud event, we're reminded of the old OpenStack days. If you remember, Dave OpenStack was supposed to be the open source version of cloud. And that was a great ambition. And the cloud AATI at that time was very into it because it made a lot of sense. And the vision, all the infrastructure was code. Everything was lined up. Everything was religiously was on the table. Beautiful cloud future. Okay. 20 2009, 2010, where was Amazon? Then they just went off like a rocket ship. So cloud ended up becoming AWS in my opinion. Yeah. OpenStax then settled in, did some great things, but also spawns Kubernetes. Okay. So, you know, we've lived through thiss we've seen this movie. We were actually in the trenches on the front lines present at creation for cloud computing. >>Yeah. I was at Rackspace when the open stack was open sourced. I was there in, in the rooms and discussions and all that. I think OpenStack was given to the open source like prematurely. I usually like we left a toddler on the freeway. No, the toddler >>Got behind the wheel. Can't see over the dashboard. >>So we have learned over the years in last two decades, like we have seen the open source rise of open source and we have learned quite a few lessons. And one lesson we learned from there was like, don't let a project go out in the open, tell it mature enough with one vendor. So we did that prematurely with NASA, NASA and Rackspace gave the, the code from two companies to the open source community and then likes of IBM and HPE. No. Now HPE, they kind of hijacked the whole thing and then put a lot of developers on that. And then lot of us sort of second tier startup. >>But, but, but I remember not to interject, but at that time there wasn't a lot of pushback for letting them it wasn't like they infiltrated like a, the vendors always tried to worry about vendors coming in open source, but at that time was pretty people accepted them. And then it got off the rails. Then you remember the great API debate. You >>Called it a hail Mary to against AWS, which is, is what it was, what it was. >>It's true. Yeah. Ended up being right. But the, the battle started happening when you started seeing the network perimeters being discussed, you starting to see some of the, in the trenches really important conversations around how to make essentially cross cloud or super cloud work. And, and again, totally premature it continue. And, and what does that mean today? So, okay. Is VMware too early on their cross cloud? Are they, is multi-cloud ready? >>No >>For, and is it just vaporware? >>No, they're not too early, actually on, on, on, on that side they were premature to put that out there, but this is like very mature company, like in the ops area, you know, we have been using, we VMware stuff since 2000 early 2000. I, I was at commerce one when we started using it and yeah, it was for lab manager, you know, like, you know, put the labs >>Out desktop competition. >>Yeah, yeah. Kind of thing. So it, it matured pretty fast, but now it it's like for all these years they focused on the op site more. Right. And then the challenge now in the DevOps sort of driven culture, which is very hyped, to be honest with you, they have try and find a place for developers to plug in on the left side of the sort of whole systems, life cycle management sort of line, if you will. So I think that's a, that's a struggle for, for VMware. They have to figure that out. And they are like a tap Tansu application platform services. They, they have released a new version of that now. So they're trying to do that, but still they are from the sort of get ups to the, to the right, from that point to the right on the left side. They're lot more tooling to helpers use as we know, but they are very scattered kind of spend and scattered technology on the left side. VMware doesn't know how to tackle that. But I think, I think VMware should focus on the right side from the get ups to the right and then focus there. And then how in the multi-cloud cross cloud. >>Cause my sense is, they're saying, Hey, look, we're not gonna own the developers. I think they know that. And they think they're saying do develop in whatever world you want to develop in will embrace it. And then the ops guys, we, we got you covered, we got the standards, we have the consistency and you're our peeps. You tend then take it, you know, to, to the market. Is that not? I mean, it seems like a viable strategy. I >>Mean, look at if you're VMware Dave and start, you know, this where they are right now, the way they missed the cloud. And they had to reboot that with jazzy and, and, and Raghu to do the databases deal. It's essentially VMware hosted on AWS and clients love it cuz it's clarity. Okay. It's not vCloud air. So, so if you're them right now, you seeing yourself, wow. We could be the connective tissue between all clouds. We said this from day one, when Kubernetes was hitting in the scene, whoever can make this, the interoperability concept of inter clouding and connect clouds so that there could be spanning of applications and data. We didn't say data, but we said, you know, creating that nice environment of multiple clouds. Okay. And again, in concept, that sounds simple, but if you're VMware, you could own that abstraction layer. So do you own it or do you seed the base and let it become a defacto organization? Like a super layer, super pass layer and then participate in it? Or are you the middleware yourself? We heard AJ Patel say that. So, so they could be the middleware for at all. >>Aren't they? The infrastructure super cloud. I mean, that's what they're trying to be. >>Yeah. I think they're trying, trying to do that. It's it's I, I, I have said that many times VMware is bridged to the cloud, right? >>The sorry. Say bridge to >>The cloud. Yeah. Right. For, for enterprises, they have virtualized environments, mostly on VMware stacks. And another thing is I wanna mention touch on that is the number of certified professionals on VMware stack. There it's a huge number it's in tens of thousands. Right? So people who have got these certifications, they want to continue that sort of journey. They wanna leverage that. It's like, it's a Sunco if they don't use that going forward. And that was my question to, to during the press release yesterday, like are there new certifications coming into the, into the limelight? I, I think the VMware, if they're listening to me here somewhere, they will listen. I guess they should introduce a, a cross cloud certification for their stack because they want to be cross cloud or multi-cloud sort of vendor with one sort of single pane. So does actually Cisco and so do many others. But I think VMware is in a good spot. It's their market to lose. I, I, I call it when it comes to the multi-cloud for enterprise, especially for the legacy applications. >>Well, they're not, they have the enterprise they're super cloud enabler, Dave for the, for the enterprise, cuz they're not hyperscaler. Okay. They have all the enterprise customers who come here, we see them, we speak to them. We know them will mingle, but >>They have really good relationships with all the >>Hyperscale. And so those, those guys need a way to the cloud in a way that's cloud operation though. So, so if you say enterprises need their own super cloud, I would say VMware might wanna raise their hands saying we're the vendor to provide that. Yes, totally. And then that's the middleware role. So middleware isn't your classic stack middleware it's middle tissue. So you got, it's not a stack model anymore. It's completely different. >>Maybe, maybe my, my it's >>Not a stack >>Industry. Maybe my industry super cloud is too aspirational, but so let's assume for a second. You're not gonna have everybody doing their own clouds, like Goldman Sachs and, and capital one, even though we're seeing some evidence of that, even in that case, connecting my on-prem to the cloud and modernizing my application stack and, and having some kind of consistency between your on-prem and it's just call it hybrid, like real hybrid, true hybrid. They should dominate that. I mean, who is who, if it's not it's VMware and it's what red hat who else? >>I think red hat wants it too. >>Yeah. Well, red hat and red, hat's doing it with IBM consulting and they gotta be, they have great advantage there for all the banks. Awesome. But what, what about the other 500,000 customers that are >>Out there? If VMware could do what they did with the hypervisor, with virtualization and create the new thing for super cloud, AKA connecting clouds together. That's a, that's a holy grail move right >>There. But what about this PA layer? This Tansu and area which somebody on Twitter, there was a little SNAR come that's V realized just renamed, which is not. I mean, it's, it's from talking to Raghu unless he's just totally BSing us, which I don't think he is. That's not who he is. It's this new federated architecture and it's this, their super PAs layer and, and, and it's purpose built for what they're trying to do across clouds. This is your wheelhouse. What, what do you make of that? >>I think Tansu is a great effort. They have put in lot of other older products under that one umbrella Tansu is not a product actually confuses the heck out of the market. That it's not a product. It's a set of other products put under one umbrella. Now they have created another umbrella term with the newer sort of, >>So really is some yeah. >>Two >>Umbrella on there. So it's what it's pivotal. It's vRealize it's >>Yeah. We realize pivotal and, and, and older stack, actually they have some open source components in there. So, >>So they claim that this ragus claim, it's this new architecture, this new federated architecture graph database, low latency, real time ingestion. Well, >>AJ, AJ that's AJ's department, >>It sounded good. I mean, this is that >>Actually I think the newer, newer stuff, what they announced, that's very promising because it seems like they're building something from scratch. So, >>And it won't be, it won't be hardened for, but, but >>It won't be hardened for, but, >>But those, but they have a track record delivering. I mean, they gotta say that about yeah. >>They're engineering focus company. They have engineering culture. They're their software engineers are top. Not top not, >>Yes. >>What? >>Yeah. It's all relatives. If they, if the VMware stays the way they are. Well, >>Yeah, >>We'll get to that a second. What >>Do you mean? What are you talking >>About? They don't get gutted >>The elephant in the room if they don't get gutted and then, then we'll see it happens there. But right now I love, we love VMware. We've been covering them for 12 years and we've seen the trials, not without their own issues to work on. I mean, everyone needs to work on stuff, but you know, world class, they're very proud of their innovation, but I wanna ask you, what was your observations walking around the floor, talking to people? What was the sense of the messaging? Is it real in their minds? Are they leaning in, are they like enthused? Are they nervous, apprehensive? How would you categorize the attitude of the folks here that you've talked to or observed? >>Yeah. It at the individual product level, like the people are very confident what they're building, what they're delivering, but when it comes to the telling a cohesive story, if you go to all the VMware booth there, like it's hard to find anybody who can tell what, what are all the services under tens and how they are interconnected and what facilities they provide or they can't. They, I mean, most of the people who are there, they can are walking through the economic side of things, like how it will help you save money or, or how the TCR ROI will improve. They are very focused on because of the nature of the company, right. They're very focused on the technology only. So I think that that's the, that's what I learned. And another sort of gripe or negative I have about VMware is that they have their product portfolio is so vast and they are even spreading more thinly. And they're forced to go to the left towards developers because of the sheer force of hyperscalers. On one side on the, on the right side, they are forced to work with hyperscalers to do more like ops related improvements. They didn't mention AI or, or data. >>Yeah. Data storage management. >>That that was weak. That's true. During the, the keynote as well. >>And they didn't mention security and their security story, strong >>Security. I think they mentioned it briefly very briefly, very briefly. But I think their SCO story is good actually, but no is they didn't mention it properly, I guess. >>Yeah. There wasn't prominent in the keynote. It was, you know, and again, I understand why data wasn't P I, they wanted to say about data, >>Didn't make room for the developer story. I think this was very much a theatrical maneuver for Hawk and the employee morale and the ecosystem morale, Dave, then it had to do with the nuts bolt of security. They can come back to get that security. In my opinion, you know, I, I don't think that was as bad of a call as bearing the vSphere, giving more demos, which they did do later. But the keynote I thought was, was well done as targeted for all the negative sentiment around Broadcom and Broadcom had this, the acquisition agreement that they're, they are doing, they agree >>Was well done. I mean, >>You know, if I VMware, I would've done the same thing, look at this is a bright future. We're given that we're look at what we got. If you got this, it's on you. >>And I agree with you, but the, the, again, I don't, I don't see how you can't make security front and center. When it is the number one issue for CIOs, CSOs, CSOs boards or directors, they just, it was a miss. They missed it. Yeah. Okay. And they said, oh, well, there's only so much time, but, and they had to put the application development focus on there. I get that. But >>Another thing is, I think just keynote is just one sort of thing. One moment in this whole sort of continuous period, right. They, I think they need to have that narrative, like messaging done periodically, just like Amazon does, you know, like frequent events tapping into the practitioners on regional basis. They have to do that. Maybe it's a funding issue. Maybe it is some weakness on the, no, >>I think they planning, I talked to, we talked to the CMO and she said, Explorer is gonna be a road show. They're gonna go international with, it's gonna take a global, they're gonna have a lot of wood behind the arrow. They're gonna spend a lot of money on Explorer is what, they're, what we're seeing. And that's a good thing. You got a new brand, you gotta build it. >>You know, I would've done, I would've had, I would've had a shorter keynote on day one and doing, and then I would've done like a security day, day two. I would've dedicated the whole morning, day two keynote to security cuz their stories I think is that strong? >>Yeah. >>Yeah. And I don't know the developers side of things. I think it's hard for VMware to go too much to the left. The spend on the left is very scattered. You know, if you notice the tools, developers change their tools on freaking monthly basis, right? Yeah. Yeah. So it's hard to sustain that they on the very left side and the, the, the >>It's hard for companies like VMware to your point. And then this came up in super cloud and ins Rayme mentioned that developers drive everything, the patterns, what they like and you know, the old cliche meet them where they are. You know, honestly, this is kind of what AJ says is the right they're doing. And it's the right strategy meeting that develops where they are means give them something that they like. They like self-service they like to try stuff. They like to, they don't like it. They'll throw it away. Look at the success that comes like data, dog companies like that have that kind of offering with freemium and self-service to, to continue the wins versus jamming the tooling down their throat and selling >>Totally self-serve infrastructure for the, in a way, you know, you said they missed cloud, which they did V cloud air. And then they thought of got it. Right. It kind of did the same thing with pivotal. Right. It was almost like they forced to take pivotal, you know, by pivotal, right. For 2 billion or whatever it was. All right. Do something with it. Okay. We're gonna try to do something with it and they try to go out and compete. And now they're saying, Hey, let's just open it up. Whatever they want to use, let 'em use it. So unlike and I said this yesterday, unlike snowflake has to attract developers to build on their unique platform. Okay. I think VMware's taken a different approach saying use whatever you want to use. We're gonna help the ops guys. And that, to me, a new op >>Very sensitive, >>The new ops, the new ops guys. Yes. Yes. >>I think another challenge on the right right. Is on, on the op site is like, if, if you are cloud native, you are a new company. You just, when you're a startup, you are cloud native, right. Then it's hard for VMware to convince them to, Hey, you know, come to us and use this. Right. It's very hard. It is. They're a good play for a while. At least they, they can prolong their life by innovating along the way because of the, the skills gravity, I call it of the developers and operators actually that's their, they, they have a loyal community they have and all that stuff. And by the way, the name change for the show. I think they're trying to get out of that sort of culty kind of nature of the, their communities that they force. The communities actually can force the companies, not to do certain things certain way. And I've seen that happening. And >>Well, I think, I think they're gonna learn and they already walked back their messaging. Not that they said anything overtly, but you know, the Lori, the CMO clarified this significantly, which was, they never said that they wanted to replace VM world. Although the name change implies that. And what they re amplified after the fact is that this is gonna be a continuation of the community. And so, you know, it's nuanced, they're splitting hairs, but that's, to me walking back the, you know, the, the loyalty and, and look at let's face it. Anytime you have a loyal community, you do anything of change. People are gonna be bitching and moaning. Yeah. >>But I mean, knew, worked, explore, >>Work. It wasn't bad at all. It was not a bad look. It wasn't disastrous call. Okay. Not at all. I'm critical of the name change at first, but the graphics are amazing. They did an exceptional job on the branding. They did, did an exceptional job on how they handled the new logo, the new name, the position they, and a lot of people >>Showed >>Up. Yeah. It worked >>A busy busier than all time >>It worked. And I think they, they threaded the needle, given everything they had going on. I thought the event team did an exceptional job here. I mean, just really impressive. So hats up to the event team at, at VMware pulling off now, did they make profit? I don't know. It doesn't matter, you know, again, so much going on with Broadcom, but here being in Moscone west, we see people coming down the stairs here, Dave's sessions, you know, lot of people, a lot of buzz on the content sold out sessions. So again, that's the ecosystem. The people giving the talks, you know, the people in the V brown bag, you know, got the, the V tug. They had their meeting, you know, this week here, >>Actually the, the, the red hat, the, the integration with the red hat is another highlight of, of, they announced that, that you can run that style >>OpenShift >>And red hats, not here, >>Red hat now here, but yeah, but, but, but >>It was more developers, more, you know, >>About time. I would say, why, why did it take so long? That should >>Have happened. All right. Final question. So what's the bottom line. Give us the summary. What's your take, what's your analysis of VMware explore the event, what they did, what it means, what it's gonna mean when the event's over, what's gonna happen. >>I think VMware with the VMware Explorer have bought the time with the messaging. You know, they have promised certain things with newer announcements and now it, it, it is up to them to deliver that in a very sort of fast manner and build more hooks into other sort of platforms. Right? So that is very important. You cannot just be closed system people. Don't like those systems. You have to be part of the ecosystem. And especially when you are sitting on top of the actually four or four or more public clouds, Alibaba cloud was, they were saying that they're the only VMware is only VMware based offering in mainland China on top of the Alibaba. And they, they can go to other ones as well. So I think, especially when they're sitting on top of other cloud providers, they have to build hooks into other platforms. And if they can build a marketplace of their own, that'll be even better. I think they, >>And they've got the ecosystem for it. I mean, you saw it last night. I mean, all the, all the parties were hopping. I mean, there was, there's >>A lot of buzz. I mean, I pressed, I pressed them Dave hard. I had my little, my zingers. I wanted to push the buttons on one question that was targeted towards the answer of, are they gonna try to do much more highly competitive maneuvering, you know, get that position in the middleware. Are they gonna be more aggressive with frontal competitiveness or are they gonna take the, the strategy of open collaborative and every single data point points to collaborative totally hit Culbert. I wanna do out in the open. We're not just not, we're not one company. So I think that's the right play. If they came out and said, we're gonna be this, you know? >>Yeah. The one, the last thing, actually, the, the one last little idea I'm putting out out there since I went to the Dell world, was that there's a economics of creation of software. There's economics of operations of software. And they are very good on the operation economics of operations side of things that when I say economics, it doesn't mean money only. It also means a productivity practitioner, growth. Everything is in there. So I think these vendors who are not hyperscalers, they have to distinguish these two things and realize that they're very good on the right side economics of operations. And, and that will go a long way. Actually. I think they muddy the waters by when DevOps, DevOps, and then it's >>Just, well, I think Dave, we always we've had moments in time over the past 12 years covering VMware's annual conference, formally world now floor, where there were moments of that's pat Gelsinger, spinal speech. Yeah. And I remember he was under a siege of being fired. Yeah. There was a point in time where it was touch and go, and then everything kind of came together. That was a moment. I think we're at a moment in time here with VMware Dave, where we're gonna see what Broadcom does, because I think what hop 10 and Broadcom saw this week was an EBI, a number on the table that they know they can probably get or squeeze. And then they saw a future value and net present value of future state that you could, you gotta roll back and do the analysis saying, okay, how much is it worth all this new stuff worth? Is that gonna contribute to the EBITDA number that they want on the number? So this is gonna be a very interesting test because VMware did it, an exceptional job of laying out that they got some jewels in the oven. You >>Think about how resilient this company has been. I mean, em, you know, EMC picked them up for a song. It was 640 million or whatever it was, you know, about the public. And then you, another epic moment you'll recall. This was when Joe Tuchi was like the mafia Don up on stage. And Michael Dell was there, John Chambers with all the ecosystem CEOs and there was Tucci. And then of course, Michael Dell ends up owning this whole thing, right? I mean, when John Chambers should have owned the whole thing, I mean, it's just, it's been incredible. And then Dell uses VMware as a piggy bank to restructure its balance sheet, to pay off the EMC debt and then sells the thing for $60 billion. And now it's like, okay, we're finally free of all this stuff. Okay. Now Broadcom's gonna buy you. And, >>And if Michael Dell keeps all in stock, he'll be the largest shareholder of Broadcom and own it off. >>Well, and that's probably, you know, that's a good question is, is it's gonna, it probably a very tax efficient transaction. If he takes all stock and then he can, you know, own against it. I mean, that's, that's, >>That's what a history we're gonna leave it there. Start be great to have you Dave great analysis. Okay. We'll be back with more coverage here. Day two, winding down after the short break.

(upbeat music) >> Welcome back, everyone to CUBE Supercloud 22. I'm John Furrier, your host. Got a great influencer, Cloud Cloud RRT segment with Sarbjeet Johal, Cloud influencer, Cloud economist, Cloud consultant, Cloud advisor. Sarbjeet, welcome back, CUBE alumni. Good to see you. >> Thanks John and nice to be here. >> Now, what's your title? Cloud consultant? Analyst? >> Consultant, actually. Yeah, I'm launching my own business right now formally, soon. It's in stealth mode right now, we'll be (inaudible) >> Well, I'll just call you a Cloud guru, Cloud influencer. You've been great, friend of theCUBE. Really powerful on social. You share a lot of content. You're digging into all the trends. Supercloud is a thing, it's getting a lot of traction. We introduced that concept last reinvent. We were riffing before that. As we kind of were seeing the structural change that is now Supercloud, it really is kind of the destination or outcome of what we're seeing with hybrid cloud as a steady state into the what's now, they call multicloud, which is kind of awkward. It feels like it's default. Like multicloud, multi-vendor, but Supercloud has much more of a comprehensive abstraction around it. What's your thoughts? >> As you said, as Dave says that too, the Supercloud has that abstraction built into it. It's built on top of cloud, right? So it's being built on top of the CapEx which is being spent by likes of AWS and Azure and Google Cloud, and many others, right? So it's leveraging that infrastructure and building software stack on top of that, which is a platform. I see that as a platform being built on top of infrastructure as code. It's another platform which is not native to the cloud providers. So it's like a kind of cross-Cloud platform. That's what I said. >> Yeah, VMware calls it that cloud-cross cloud. I'm not a big fan of the name but I get what you're saying. We had a segment on earlier with Adrian Cockcroft, Laurie McVety and Chris Wolf, all part of the Cloud RRT like ourselves, and you've involved in Cloud from day one. Remember the OpenStack days Early Cloud, AWS, when they started we saw the trajectory and we saw the change. And I think the OpenStack in those early days were tell signs because you saw the movement of API first but Amazon just grew so fast. And then Azure now is catching up, their CapEx is so large that companies like Snowflake's like, "Why should I build my own? "I just sit on top of AWS, "move fast on one native cloud, then figure it out." Seems to be one of the playbooks of the Supercloud. >> Yeah, that is true. And there are reasons behind that. And I think number one reason is the skills gravity. What I call it, the developers and/or operators are trained on one set of APIs. And I've said that many times, to out compete your competition you have to out educate the market. And we know which cloud has done that. We know what traditional vendor has done that, in '90s it was Microsoft, they had VBS number one language and they were winning. So in the cloud era, it's AWS, their marketing efforts, their go-to market strategy, the micro nature of the releasing the micro sort of features, if you will, almost every week there's a new feature. So they have got it. And other two are trying to mimic that and they're having low trouble light. >> Yeah and I think GCP has been struggling compared to the three and native cloud on native as you're right, completely successful. As you're caught up and you see the Microsoft, I think is a a great selling point around multiple clouds. And the question that's on the table here is do you stay with the native cloud or you jump right to multicloud? Now multicloud by default is kind of what I see happening. We've been debating this, I'd love to get your thoughts because, Microsoft has a huge install base. They've converted to Office 365. They even throw SQL databases in there to kind of give it a little extra bump on the earnings but I've been super critical on their numbers. I think their shares are, there's clearly overstating their share, in my opinion, compared to AWS is a need of cloud, Azure though is catching up. So you have customers that are happy with Microsoft, that are going to run their apps on Azure. So if a customer has Azure and Microsoft that's technically multiple clouds. >> Yeah, true. >> And it's not a strategy, it's just an outcome. >> Yeah, I see Microsoft cloud as friendly to the internal developers. Internal developers of enterprises. but AWS is a lot more ISV friendly which is the software shops friendly. So that's what they do. They just build software and give it to somebody else. But if you're in-house developer and you have been a Microsoft shop for a long time, which enterprise haven't been that, right? So Microsoft is well entrenched into the enterprise. We know that, right? >> Yeah. >> For a long time. >> Yeah and the old joke was developers love code and just go with a lock in and then ops people don't want lock in because they want choice. So you have the DevOps movement that's been successful and they get DevSecOps. The real focus to me, I think, is the operating teams because the ops side is really with the pressure vis-a-vis. I want to get your reaction because we're seeing kind of the script flip. DevOps worked, infrastructure's code has worked. We don't yet see security as code yet. And you have things like cloud native services which is all developer, goodness. So I think the developers are doing fine. Give 'em a thumbs up and open source's booming. So they're shifting left, CI/CD pipeline. You have some issues around repo, monolithic repos, but devs are doing fine. It's the ops that are now have to level up because that seems to be a hotspot. What's your take? What's your reaction to that? Do you agree? And if you say you agree, why? >> Yeah, I think devs are doing fine because some of the devs are going into ops. Like the whole movement behind DevOps culture is that devs and ops is one team. The people who are building that application they're also operating that as well. But that's very foreign and few in enterprise space. We know that, right? Big companies like Google, Microsoft, Amazon, Twitter, those guys can do that. They're very tech savvy shops. But when it comes to, if you go down from there to the second tier of enterprises, they are having hard time with that. Once you create software, I've said that, I sound like a broken record here. So once you create piece of software, you want to operate it. You're not always creating it. Especially when it's inhouse software development. It's not your core sort of competency to. You're not giving that software to somebody else or they're not multiple tenants of that software. You are the only user of that software as a company, or maybe maximum to your employees and partners. But that's where it stops. So there are those differences and when it comes to ops, we have to still differentiate the ops of the big companies, which are tech companies, pure tech companies and ops of the traditional enterprise. And you are right, the ops of the traditional enterprise are having tough time to cope up with the changing nature of things. And because they have to run the old traditional stacks whatever they happen to have, SAP, Oracle, financial, whatnot, right? Thousands of applications, they have to run that. And they have to learn on top of that, new scripting languages to operate the new stack, if you will. >> So for ops teams do they have to spin up operating teams for every cloud specialized tooling, there's consequences to that. >> Yeah. There's economics involved, the process, if you are learning three cloud APIs and most probably you will end up spending a lot more time and money on that. Number one, number two, there are a lot more problems which can arise from that, because of the differences in how the APIs work. The rule says if you pick one primary cloud and then you're focused on that, and most of your workloads are there, and then you go to the secondary cloud number two or three on as need basis. I think that's the right approach. >> Well, I want to get your take on something that I'm observing. And again, maybe it's because I'm old school, been around the IT block for a while. I'm observing the multi-vendors kind of as Dave calls the calisthenics, they're out in the market, trying to push their wears and convincing everyone to run their workloads on their infrastructure. multicloud to me sounds like multi-vendor. And I think there might not be a problem yet today so I want to get your reaction to my thoughts. I see the vendors pushing hard on multicloud because they don't have a native cloud. I mean, IBM ultimately will probably end up being a SaaS application on top of one of the CapEx hyperscale, some say, but I think the playbook today for customers is to stay on one native cloud, run cloud native hybrid go in on OneCloud and go fast. Then get success and then go multiple clouds. versus having a multicloud set of services out of the gate. Because if you're VMware you'd love to have cross cloud abstraction layer but that's lock in too. So what's your lock in? Success in the marketplace or vendor access? >> It's tricky actually. I've said that many times, that you don't wake up in the morning and say like, we're going to do multicloud. Nobody does that by choice. So it falls into your lab because of mostly because of what MNA is. And sometimes because of the price to performance ratio is better somewhere else for certain kind of workloads. That's like foreign few, to be honest with you. That's part of my read is, that being a developer an operator of many sort of systems, if you will. And the third tier which we talked about during the VMworld, I think 2019 that you want vendor diversity, just in case one vendor goes down or it's broken up by feds or something, and you want another vendor, maybe for price negotiation tactics, or- >> That's an op mentality. >> Yeah, yeah. >> And that's true, they want choice. They want to get locked in. >> You want choice because, and also like things can go wrong with the provider. We know that, we focus on top three cloud providers and we sort of assume that they'll be there for next 10 years or so at least. >> And what's also true is not everyone can do everything. >> Yeah, exactly. So you have to pick the provider based on all these sort of three sets of high level criteria, if you will. And I think the multicloud should be your last choice. Like you should not be gearing up for that by default but it should be by design, as Chuck said. >> Okay, so I need to ask you what does Supercloud in my opinion, look like five, 10 years out? What's the outcome of a good Supercloud structure? What's it look like? Where did it come from? How did it get there? What's your take? >> I think Supercloud is getting born in the absence of having standards around cloud. That's what it is. Because we don't have standards, we long, or we want the services at different cloud providers, Which have same APIs and there's less learning curve or almost zero learning curve for our developers and operators to learn that stuff. Snowflake is one example and VMware Stack is available at different cloud providers. That's sort of infrastructure as a service example if you will. And snowflake is a sort of data warehouse example and they're going down the stack. Well, they're trying to expand. So there are many examples like that. What was the question again? >> Is Supercloud 10 years out? What does it look like? What's the components? >> Yeah, I think the Supercloud 10 years out will expand because we will expand the software stack faster than the hardware stack and hardware stack will be expanding of course, with the custom chips and all that. There was the huge event yesterday was happening from AWS. >> Yeah, the Silicon. >> Silicon Day. And that's an eyeopening sort of movement and the whole technology consumption, if you will. >> And yeah, the differentiation with the chips with supply chain kind of herding right now, we think it's going to be a forcing function for more cloud adoption. Because if you can't buy networking gear you going to go to the cloud. >> Yeah, so Supercloud to me in 10 years, it will be bigger, better in the likes of HashiCorp. Actually, I think we need likes of HashiCorp on the infrastructure as a service side. I think they will be part of the Supercloud. They are kind of sitting on the side right now kind of a good vendor lost in transition kind of thing. That sort of thing. >> It's like Kubernetes, we'll just close out here. We'll make a statement. Is Kubernetes a developer thing or an infrastructure thing? It's an ops thing. I mean, people are coming out and saying Kubernetes is not a developer issue. >> It's ops thing. >> It's an ops thing. It's in operation, it's under the hood. So you, again, this infrastructure's a service integrating this super pass layer as Dave Vellante and Wikibon call it. >> Yeah, it's ops thing, actually, which enables developers to get that the Azure service, like you can deploy your software in sort of different format containers, and then you don't care like what VMs are those? And, but Serverless is the sort of arising as well. It was hard for a while now it's like the lull state, but I think Serverless will be better in next three to five years on. >> Well, certainly the hyperscale is like AWS and Azure and others have had great CapEx and investments. They need to stay ahead, in your opinion, final question, how do they stay ahead? 'Cause, AWS is not going to stand still nor will Azure, they're pedaling as fast as they can. Google's trying to figure out where they fit in. Are they going to be a real cloud or a software stack? Same with Oracle. To me, it's really, the big race is now with AWS and Azure's nipping at their heels. Hyperscale, what do they need to do to differentiate going forward? >> I think they are in a limbo. They, on one side, they don't want to compete with their customers who are sitting on top of them, likes of Snowflake and others, right? And VMware as well. But at the same time, they have to keep expanding and keep innovating. And they're debating within their themselves. Like, should we compete with these guys? Should we launch similar sort of features and functionality? Or should we keep it open? And what I have heard as of now that internally at AWS, especially, they're thinking about keeping it open and letting people sort of (inaudible)- >> And you see them buying some the Cerner with Oracle that bought Cerner, Amazon bought a healthcare company. I think the likes of MongoDB, Snowflake, Databricks, are perfect examples of what we'll see I think on the AWS side. Azure, I'm not so sure, they like to have a little bit more control at the top of the stack with the SaaS, but I think Databricks has been so successful open source, Snowflake, a little bit more proprietary and closed than Databricks. They're doing well is on top of data, and MongoDB has got great success. All of these things compete with AWS higher level services. So, that advantage of those companies not having the CapEx investment and then going multiple clouds on other ecosystems that's a path of customers. Stay one, go fast, get traction, then go. >> That's huge. Actually the last sort comment I want to make is that, Also, that you guys include this in the definition of Supercloud, the likes of Capital One and Soner sort of vendors, right? So they are verticals, Capital One is in this financial vertical, and then Soner which Oracle bar they are in this healthcare vertical. And remember in the beginning of the cloud and when the cloud was just getting born. We used to say that we will have the community clouds which will be serving different verticals. >> Specialty clouds. >> Specialty clouds, community clouds. And actually that is happening now at very sort of small level. But I think it will start happening at a bigger level. The Goldman Sachs and others are trying to build these services on the financial front risk management and whatnot. I think that will be- >> Well, what's interesting, which you're bringing up a great discussion. We were having discussions around these vertical clouds like Goldman Sachs Capital One, Liberty Mutual. They're going all in on one native cloud then going into multiple clouds after, but then there's also the specialty clouds around functionality, app identity, data security. So you have multiple 3D dimensional clouds here. You can have a specialty cloud just on identity. I mean, identity on Amazon is different than Azure. Huge issue. >> Yeah, I think at some point we have to distinguish these things, which are being built on top of these infrastructure as a service, in past with a platform, a service, which is very close to infrastructure service, like the lines are blurred, we have to distinguish these two things from these Superclouds. Actually, what we are calling Supercloud maybe there'll be better term, better name, but we are all industry path actually, including myself and you or everybody else. Like we tend to mix these things up. I think we have to separate these things a little bit to make things (inaudible) >> Yeah, I think that's what the super path thing's about because you think about the next generation SaaS has to be solved by innovations of the infrastructure services, to your point about HashiCorp and others. So it's not as clear as infrastructure platform, SaaS. There's going to be a lot of interplay between this levels of services. >> Yeah, we are in this flasker situation a lot of developers are lost. A lot of operators are lost in this transition and it's just like our economies right now. Like I was reading at CNBC today, and here's sort of headline that people are having hard time understanding what state the economy is in. And so same is true with our technology economy. Like we don't know what state we are in. It's kind of it's in the transition phase right now. >> Well we're definitely in a bad economy relative to the consumer market. I've said on theCUBE publicly, Dave has as well, not as aggressive. I think the tech is still in a boom. I don't think there's tech bubble at all that's bursting, I think, the digital transformation from post COVID is going to continue. And this is the first recession downturn where the hyperscalers have been in market, delivering the economic value, almost like they're pumping on all cylinders and going to the next level. Go back to 2008, Amazon web services, where were they? They were just emerging out. So the cloud economic impact has not been factored into the global GDP relationship. I think all the firms that are looking at GDP growth and tech spend as a correlation, are completely missing the boat on the fact that cloud economics and digital transformation is a big part of the new economics. So refactoring business models this is continuing and it's just the early days. >> Yeah, I have said that many times that cloud works good in the bad economy and cloud works great in the good economy. Do you know why? Because there are different type of workloads in the good economy. A lot of experimentation, innovative solutions go into the cloud. You can do experimentation that you have extra money now, but in the bad economy you don't want to spend the CapEx because don't have money. Money is expensive at that point. And then you want to keep working and you don't need (inaudible) >> I think inflation's a big factor too right now. Well, Sarbjeet, great to see you. Thanks for coming into our studio for our stage performance for Supercloud 22, this is a pilot episode that we're going to get a consortium of experts Cloud RRT like yourselves, in the conversation to discuss what the architecture is. What is a taxonomy? What are the key building blocks and what things need to be in place for Supercloud capability? Because it's clear that if without standards, without defacto standards, we're at this tipping point where if it all comes together, not all one company can do everything. Customers want choice, but they also want to go fast too. So DevOps is working. It's going the next level. We see this as Supercloud. So thank you so much for your participation. >> Thanks for having me. And I'm looking forward to listen to the other sessions (inaudible) >> We're going to take it on A stickers. We'll take it on the internet. I'm John Furrier, stay tuned for more Supercloud 22 coverage, here at the Palo Alto studios in one minute. (bright music)

>> From theCUBE studios in Palo Alto and Boston, bringing you data-driven insights from theCUBE and ETR, this is Breaking Analysis with Dave Vellante. >> In our 2020 predictions post, we said that organizations would begin to operationalize their digital transformation experiments and POCs. We also said that based on spending data that cybersecurity companies like CrowdStrike and Okta were poised to rise above the rest in 2020, and we even said the S&P 500 would surpass 3,700 this year. Little did we know that we'd have a pandemic that would make these predictions a virtual lock, and, of course, COVID did blow us out of the water in some other areas, like our prediction that IT spending would increase plus 4% in 2020, when in reality, we have a dropping by 4%. We made a number of other calls that did pretty well, but I'll let you review last year's predictions at your leisure to see how we did. Hello, everyone. This is Dave Vellante and welcome to this week's Wikibon CUBE Insights powered by ETR. Erik Bradley of ETR is joining me again for this Breaking Analysis, and we're going to lay out our top picks for 2021. Erik, great to see you. Welcome back. Happy to have you on theCUBE, my friend. >> Always great to see you too, Dave. I'm excited about these picks this year. >> Well, let's get right into it. Let's bring up the first prediction here. Tech spending will rebound in 2021. We expect a 4% midpoint increase next year in spending. Erik, there are a number of factors that really support this prediction, which of course is based on ETR's most recent survey work, and we've listed a number of them here in this slide. I wonder if we can talk about that a little bit, the pace of the vaccine rollout. I've called this a forced march to COVID, but I can see people doubling down on things that are working. Productivity improvements are going to go back into the business. People are going to come back to the headquarters and that maybe is going to spur infrastructure on some pent-up demand, and work from home, we're going to talk about that. What are your thoughts on this prediction? >> Well, first of all, you weren't wrong last year. You were just, (laughs) you were just delayed. Just delayed a little bit, that's all. No, very much so. Early on, just three months ago, we were not seeing this optimism. The most recent survey, however, is capturing 4%. I truly believe that still might be a little bit mild. I think it can go even higher, and that's going to be driven by some of the things you've said about. This is a year where a lot of spending was paused on machine learning, on automation, on some of these projects that had to be stopped because of what we all went through. Right now, that is not a nice to have, it's a must have, and that spending is going quickly. There's a rapid pace on that spending, so I do think that's going to push it and, of course, security. We're going to get to this later on so I don't want to bury the lede, but with what's happening right now, every CISO I speak to is not panicked, but they are concerned and there will definitely be increased security spending that might push this 4% even higher. >> Yeah, and as we've reported as well, the survey data shows that there's less freezing of IT, there are fewer layoffs, there's more hiring, we're accelerating IT deployments, so that, I think, 34% last survey, 34% of organizations are accelerating IT deployments over the next three months, so that's great news. >> And also your point too about hiring. I was remiss in not bringing that up because we had layoffs and we had freezes on hiring. Both of that is stopping. As you know, as more head count comes in, whether that be from home or whether that be in your headquarters, both of those require support and require spending. >> All right, let's bring up the next prediction. Remote worker trends are going to become fossilized, settling in at an average of 34% by year-end 2021. Now, I love this chart, you guys. It's been amazingly consistent to me, Erik. We're showing data here from ETR's latest COVID survey. So it shows that prior to the pandemic, about 15 to 16% of employees on average worked remotely. That jumped to where we are today and well into the 70s, and we're going to stay close to that, according to the ETR data, in the first half of 2021, but by the end of the year, it's going to settle in at around 34%. Erik, that's double the pre-pandemic numbers and that's been consistent in your surveys over the past six month, and even within the sub-samples. >> Yeah, super surprised by the consistency, Dave. You're right about that. We were expecting the most recent data to kind of come down, right? We see the vaccines being rolled out. We kind of thought that that number would shift, but it hasn't, it has been dead consistent, and that's just from the data perspective. What we're hearing from the interviews and the feedback is that's not going to change, it really isn't, and there's a main reason for that. Productivity is up, and we'll talk about that in a second, but if you have productivity up and you have employees happy, they're not commuting, they're working more, they're working effectively, there is no reason to rush. And now imagine if you're a company that's trying to hire the best talent and attract the best talent but you're also the only company telling them where they have to live. I mean, good luck with that, right? So even if a few of them decide to make this permanent, that's something where you're going to really have to follow suit to attract talent. >> Yeah, so let's talk about that. Productivity leads us to our next prediction. We can bring that up. Number three is productivity increases are going to lead organizations to double down on the successes of 2020 and productivity apps are going to benefit. Now, of course, I'm always careful to cautious to interpret when you ask somebody by how much did productivity increase. It's a very hard thing to estimate depending on how you measure it. Is it revenue per employee? Is it profit? But nonetheless, the vast majority of people that we talk to are seeing productivity is going up. The productivity apps are really the winners here. Who do you see, Erik, as really benefiting from this trend? This year we saw Zoom, Teams, even Webex benefit, but how do you see this playing out in 2021? >> Well, first of all, the real beneficiaries are the companies themselves because they are getting more productivity, and our data is not only showing more productivity, but that's continuing to increase over time, so that's number one. But you're 100% right that the reason that's happening is because of the support of the applications and what would have been put in place. Now, what we do expect to see here, early on it was a rising tide lifted all boats, even Citrix got pulled up, but over time you realize Citrix is really just about legacy applications. Maybe that's not really the virtualization platform we need or maybe we just don't want to go that route at all. So the ones that we think are going to win longer term are part of this paradigm shift. The easiest one to put out as example is DocuSign. Nobody is going to travel and sit in an office to sign a paper ever again. It's not happening. I don't care if you go back to the office or you go back to headquarters. This is a paradigm shift that is not temporary. It is permanent. Another one that we're seeing is Smartsheet. Early on it started in. I was a little concerned about it 'cause it was a shadow IT type of a company where it was just spreading and spreading and spreading. It's turned out that this, the data on Smartsheet is continuing to be strong. It's an effective tool for project management when you're remotely working, so that's another one I don't see changing anytime. The other one I would call out would be Twilio. Slightly different, yes. It's more about the customer experience, but when you look at how many brick and mortar or how many in-person transactions have moved online and will stay there, companies like Twilio that support that customer experience, I'll throw out a Qualtrics out there as well, not a name we hear about a lot, but that customer experience software is a name that needs to be watched going forward. >> What do you think's going to happen to Zoom and Teams? Certainly Zoom just escalated this year, a huge ascendancy, and Teams I look at a little differently 'cause it's not just video conferencing, and both have done really, really well. How do you interpret the data that you're seeing there? >> There's no way around it, our data is decelerating quickly, really quickly. We were kind of bullish when Zoom first came out on the IPO prospects. It did very well. Obviously what happened in this remote shift turned them into an absolute overnight huge success. I don't see that continuing going forward, and there's a reason. What we're seeing and hearing from our feedback interviews is that now that people recognize this isn't temporary and they're not scrambling and they need to set up for permanency, they're going to consolidate their spend. They don't need to have Teams and Zoom. It's not necessary. They will consolidate where they can. There's always going to be the players that are going to choose Slack and Zoom 'cause they don't want to be on Microsoft architecture. That's fine, but you and I both know that the majority of large enterprises have Microsoft already. It's bundled in in pricing. I just don't see it happening. There's going to be M&A out there, which we can talk about again soon, so maybe Zoom, just like Slack, gets to a point where somebody thinks it's worthwhile, but there's a lot of other video conferencing out there. They're trying to push their telephony. They're trying to push their mobile solutions. There's a lot of companies out there doing it, so we'll see, but the current market cap does not seem to make sense in a permanent remote work situation. >> I think I'm inferring Teams is a little different because it's Microsoft. They've got this huge software estate they can leverage. They can bundle. Now, it's going to be interesting to see how and if Zoom can then expand its TAM, use its recent largesse to really enter potentially new markets. >> It will be, but listen, just the other day there was another headline that one of Zoom's executives out in China was actually blocking content as per directed by the Chinese government. Those are the kind of headlines that just really just get a little bit difficult when you're running a true enterprise size. Zoom is wonderful in the consumer space, but what I do is I research enterprise technology, and it's going to be really, really difficult to make inroads there with Microsoft. >> Yep. I agree. Okay, let's bring up number four, prediction number four. Permanent shifts in CISO strategies lead to measurable share shifts in network security. So the remote work sort of hyper-pivot, we'll call it, it's definitely exposed us. We've seen recent breaches that underscore the need for change. They've been well-publicized. We've talked a lot about identity access management, cloud security, endpoint security, and so as a result, we've seen the upstarts, and just a couple that we called, CrowdStrike, Okta, Zscaler has really benefited and we expect them to continue to show consistent growth, some well over 50% revenue growth. Erik, you really follow this space closely. You've been focused on microsegmentation and other, some of the big players. What are your thoughts here? >> Yeah, first of all, security, number one in spending overall when we started looking and asking people what their priority is going to be. That's not changing, and that was before the SolarWinds breach. I just had a great interview today with a CISO of a global hospitality enterprise to really talk about the implications of this. It is real. Him and his peers are not panicking but pretty close, is the way he put it, so there is spend happening. So first of all, to your point, continued on Okta, continued on identity access. See no reason why that changes. CrowdStrike, continue. What this is going to do is bring in some new areas, like we just mentioned, in network segmentation. Illumio is a pure play in that name that doesn't have a lot of citations, but I have watched over the last week their net spending score go from about 30 to 60%, so I am watching in real time, as this data comes in in the later part of our survey, that it's really happening Forescout is another one that's in there. We're seeing some of the zero trust names really picking up in the last week. Now, to talk about some of the more established names, yeah, Cisco plays in this space and we can talk about Cisco and what they're doing in security forever. They're really reinventing themselves and doing a great job. Palo Alto was in this space as well, but I do believe that network and microsegmentation is going to be something that's going to continue. The other one I'm going to throw out that I'm hearing a lot about lately is user behavior analytics. People need to be able to watch the trends, compare them to past trends, and catch something sooner. Varonis is a name in that space that we're seeing get a lot of adoptions right now. It's early trend, but based on our data, Varonis is a name to watch in that area as well. >> Yeah, and you mentioned Cisco transitioning, reinventing themselves toward a SaaS player. Their subscription, Cisco's security business is a real bright spot for them. Palo Alto, every time I sit in on a VENN, which is ETR's proprietary roundtable, the CISOs, they love Palo Alto. They want to work, many of them, anyway, want to work with Palo Alto. They see them as a thought leader. They seem to be getting their cloud act together. Fortinet has been doing a pretty good job there and especially for mid-market. So we're going to see this equilibrium, best of breed versus the big portfolio companies, and I think 2021 sets up as a really interesting battle for those guys with momentum and those guys with big portfolios. >> I completely agree and you nailed it again. Palo Alto has this perception that they're really thought leaders in the space and people want to work with them, but let's not rule Cisco out. They have a much, much bigger market cap. They are really good at acquisitions. In the past, they maybe didn't integrate them as well, but it seems like they're getting their act together on that. And they're pushing now what they call SecureX, which is sort of like their own full-on platform in the cloud, and they're starting to market that, I'm starting to hear more about it, and I do think Cisco is really changing people's perception of them. We shall see going forward because in the last year, you're 100% right, Palo Alto definitely got a little bit more of the sentiment, of positive sentiment. Now, let's also realize, and we'll talk about this again in a bit, there's a lot of players out there. There will probably be continued consolidation in the security space, that we'll see what happens, but it's an area where spending is increasing, there is a lot of vendors out there to play with, and I do believe we'll see consolidation in that space. >> Yes. No question. A highly fragmented business. A lack of skills is a real challenge. Automation is a big watch word and so I would expect, which brings us, Erik, to prediction number five. Can be hard to do prediction posts without talking about M&A. We see the trend toward increased tech spending driving more IPOs, SPACs and M&A. We've seen some pretty amazing liquidity events this year. Snowflake, obviously a big one. Airbnb, DoorDash, outside of our enterprise tech but still notable. Palantir, JFrog, number of others. UiPath just filed confidentially and their CEO said, "Over the next 12 to 18 months, I would think Automation Anywhere is going to follow suit at some point." Hashicorp was a company we called out in our 2020 predictions as one to watch along with Snowflake and some others, and, Erik, we've seen some real shifts in observability. The ELK Stack gaining prominence with Elastic, ChaosSearch just raised 40 million, and everybody's going after 5G. Lots of M&A opportunities. What are your thoughts? >> I think if we're going to make this a prediction show, I'm going to say that was a great year, but we're going to even have a better year next year. There is a lot of cash on the balance sheet. There are low interest rates. There is a lot of spending momentum in enterprise IT. The three of those set up for a perfect storm of more liquidity events, whether it be continued IPOs, whether it could be M&A, I do expect that to continue. You mentioned a lot of the names. I think you're 100% right. Another one I would throw out there in that observability space, is it's Grafana along with the ELK Stack is really making changes to some of the pure plays in that area. I've been pretty vocal about how I thought Splunk was having some problems. They've already made three acquisitions. They are trying really hard to get back up and keep that growth trajectory and be the great company they always have been, so I think the observability area is certainly one. We have a lot of names in that space that could be taken out. The other one that wasn't mentioned, however, that I'd like to mention is more in the CDN area. Akamai being the grandfather there, and we'll get into it a little bit too, but CloudFlare has a huge market cap, Fastly running a little bit behind that, and then there's Limelight, and there's a few startups in that space and the CDN is really changing. It's not about content delivery as much as it is about edge compute these days, and they would be a real easy takeout for one of these large market cap names that need to get into that spot. >> That's a great call. All right, let's bring up number six, and this is one that's near and dear to my heart. It's more of a longer-term prediction and that prediction is in the 2020s, 75% of large organizations are going to re-architect their big data platforms, and the premise here is we're seeing a rapid shift to cloud database and cross-cloud data sharing and automated governance. And the prediction is that because big data platforms are fundamentally flawed and are not going to be corrected by incremental improvements in data lakes and data warehouses and data hubs, we're going to see a shift toward a domain-centric ownership of the data pipeline where data teams are going to be organized around data product or data service builders and embedded into lines of business. And in this scenario, the technology details and complexity will become abstracted. You've got hyper-specialized data teams today. They serve multiple business owners. There's no domain context. Different data agendas. Those, we think, are going to be subsumed within the business lines, and in the future, the primary metric is going to shift from the cost and the quality of the big data platform outputs to the time it takes to go from idea to revenue generation, and this change is going to take four to five years to coalesce, but it's going to begin in earnest in 2021. Erik, anything you'd add to this? >> I'm going to let you kind of own that one 'cause I completely agree, and for all the listeners out there, that was Dave's original thought and I think it's fantastic and I want to get behind it. One of the things I will say to support that is big data analytics, which is what people are calling it because they got over the hype of machine learning, they're sick of vendors saying machine learning, and I'm hearing more and more people just talk about it as we need big data analytics, we need 'em at the edge, we need 'em faster, we need 'em in real time. That's happening, and what we're seeing more is this is happening with vendor-agnostic tools. This isn't just AWS-aligned. This isn't just GCP-aligned or Azure-aligned. The winners are the Snowflakes. The winners are the Databricks. The winners are the ones that are allowing this interoperability, the portability, which fully supports what you're saying. And then the only other comment I would make, which I really like about your prediction, is about the lines of business owning it 'cause I think this is even bigger. Right now, we track IT spending through the CIO, through the CTO, through IT in general. IT spending is actually becoming more diversified. IT spending is coming under the purview of marketing, it's coming under the purview of sales, so we're seeing more and more IT spending, but it's happening with the business user or the business lines and obviously data first, so I think you're 100% right. >> Yeah, and if you think about it, we've contextualized our operational systems, whether it's the CRM or the supply chain, the logistics, the business lines own their respective data. It's not true for the analytics systems, and we talked about Snowflake and Databricks. I actually see these two companies who were sort of birds of a feather in the early days together, applying Databricks machine learning on top of Snowflake, I actually see them going in diverging places. I see Databricks trying to improve on the data lake. I see Snowflake trying to reinvent the concept of data warehouse to this global mesh, and it's going to be really interesting to see how that shakes out. The data behind Snowflake, obviously very, very exciting. >> Yeah, it's just, real quickly to add on that if we have time, Dave. >> Yeah, sure. >> We all know the valuation of Snowflake, one of the most incredible IPOs I've seen in a long time. The data still supports it. It still supports that growth. Unfortunately for Databricks, their IPO has been a little bit more volatile. If you look at their stock chart every time they report, it's got a little bit of a roller coaster ride going on, and our most recent data for Databricks is actually decelerating, so again, I'm going to use the caveat that we only have about 950 survey responses in. We'll probably get that up to 1,300 or so, so it's not done yet, but right now we are putting Databricks into a category where we're seeing it decelerate a little bit, which is surprising for a company that's just right out of the gate. >> Well, it's interesting because I do see Databricks as more incremental on data lakes and I see Snowflake as more transformative, so at least from a vision standpoint, we'll see if they can execute on that. All right, number seven, let's bring up number seven. This is talking about the cloud, hybrid cloud, multi-cloud. The battle to define hybrid and multi-cloud is going to escalate in 2021. It's already started and it's going to create bifurcated CIO strategies. And, Erik, spending data clearly shows that cloud is continuing its steady margin share gains relative to on-prem, but the definitions of the cloud, they're shifting. Just a couple of years ago, AWS, they never talk about hybrid, just like they don't talk about multi-cloud today, yet AWS continues now to push into on-prem. They treat on-prem as just another node at the edge and they continue to win in the marketplace despite their slower growth rates. Still, they're so large now. 45 billion or so this year. The data is mixed. This ETR data shows that just under 50% of buyers are consolidating workloads, and then a similar, in the cloud workloads, and a similar percentage of customers are spreading evenly across clouds, so really interesting dynamic there. Erik, how do you see it shaking out? >> Yeah, the data is interesting here, and I would actually state that overall spend on the cloud is actually flat from last year, so we're not seeing a huge increase in spend, and coupled with that, we're seeing that the overall market share, which means the amount of responses within our survey, is increasing, certainly increasing. So cloud usage is increasing, but it's happening over an even spectrum. There's no clear winner of that market share increase. So they really, according to our data, the multi-cloud approach is happening and not one particular winner over another. That's just from the data perspective that various do point on AWS. Let's be honest, when they first started, they wanted all the data. They just want to take it from on-prem, put it in their data center. They wanted all of it. They never were interested in actually having interoperability. Then you look at an approach like Google. Google was always about the technology, but not necessarily about the enterprise customer. They come out with Anthos which is allowing you to have interoperability in more cloud. They're not nearly as big, but their growth rate is much higher. Law of numbers, of course. But it really is interesting to see how these cloud players are going to approach this because multi-cloud is happening whether they like it or not. >> Well, I'm glad you brought up multi-cloud in a context of what the data's showing 'cause I would agree we're, and particularly two areas that I would call out in ETR data, VMware Cloud on AWS as well as VM Cloud Foundation are showing real momentum and also OpenStack from Red Hat is showing real progress here and they're making moves. They're putting great solutions inside of AWS, doing some stuff on bare metal, and it's interesting to see. VMware, basically it's the VMware stack. They want to put that everywhere. Whereas Red Hat, similarly, but Red Hat has the developer angle. They're trying to infuse Red Hat in throughout everybody's stack, and so I think Red Hat is going to be really interesting to, especially to the extent that IBM keeps them, sort of lets them do their own thing and doesn't kind of pollute them. So, so far so good there. >> Yeah, I agree with that. I think you brought up the good point about it being developer-friendly. It's a real option as people start kicking a little bit more of new, different developer ways and containers are growing, growing more. They're not testing anymore, but they're real workloads. It is a stack that you could really use. Now, what I would say to caveat that though is I'm not seeing any net new business go to IBM Red Hat. If you were already aligned with that, then yes, you got to love these new tools they're giving you to play with, but I don't see anyone moving to them that wasn't already net new there and I would say the same thing with VMware. Listen, they have a great entrenched base. The longer they can kick that can down the road, that's fantastic, but I don't see net new customers coming onto VMware because of their alignment with AWS. >> Great, thank you for that. That's a good nuance. Number eight, cloud, containers, AI and ML and automation are going to lead 2021 spending velocity, so really is those are the kind of the big four, cloud, containers, AI, automation, And, Erik, this next one's a bit nuanced and it supports our first prediction of a rebound in tech spending next year. We're seeing cloud, containers, AI and automation, in the form of RPA especially, as the areas with the highest net scores or spending momentum, but we put an asterisk around the cloud because you can see in this inserted graphic, which again is preliminary 'cause the survey's still out in the field and it's just a little tidbit here, but cloud is not only above that 40% line of net score, but it has one of the higher sector market shares. Now, as you said, earlier you made a comment that you're not necessarily seeing the kind of growth that you saw before, but it's from a very, very large base. Virtually every sector in the ETR dataset with the exception of outsourcing and IT consulting is seeing meaningful upward spending momentum, and even those two, we're seeing some positive signs. So again, with what we talked about before, with the freezing of the IT projects starting to thaw, things are looking much, much better for 2021. >> I'd agree with that. I'm going to make two quick comments on that, one on the machine learning automation. Without a doubt, that's where we're seeing a lot of the increase right now, and I've had a multiple number of people reach out or in my interviews say to me, "This is very simple. These projects were slated to happen in 2020 and they got paused. It's as simple as that. The business needs to have more machine learning, big data analytics, and it needs to have more automation. This has just been paused and now it's coming back and it's coming back rapidly." Another comment, I'm actually going to post an article on LinkedIn as soon as we're done here. I did an interview with the lead technology director, automation director from Disney, and this guy obviously has a big budget and he was basically saying UiPath and Automation Anywhere dominate RPA, and that on top of it, the COVID crisis greatly accelerated automation, greatly accelerated it because it had to happen, we needed to find a way to get rid of these mundane tasks, we had to put them into real workloads. And another aspect you don't think about, a lot of times with automation, there's people, employees that really have friction. They don't want to adopt it. That went away. So COVID really pushed automation, so we're going to see that happening in machine learning and automation without a doubt. And now for a fun prediction real quick. You brought up the IT outsourcing and consulting. This might be a little bit more out there, the dark horse, but based on our data and what we're seeing and the COVID information about, you said about new projects being unwrapped, new hiring happening, we really do believe that this might be the bottom on IT outsourcing and consulting. >> Great, thank you for that, and then that brings us to number nine here. The automation mandate is accelerating and it will continue to accelerate in 2021. Now, you may say, "Okay, well, this is a lay-up," but not necessarily. UiPath and Automation Anywhere go public and Microsoft remains a threat. Look, UiPath, I've said UiPath and Automation Anywhere, if they were ready to go public, they probably would have already this year, so I think they're still trying to get their proverbial act together, so this is not necessarily a lay-up for them from an operational standpoint. They probably got some things to still clean up, but I think they're going to really try to go for it. If the markets stay positive and tech spending continues to go forward, I think we can see that. And I would say this, automation is going mainstream. The benefits of taking simple RPA tools to automate mundane tasks with software bots, it's both awakened organizations to the possibilities of automation, and combined with COVID, it's caused them to get serious about automation. And we think 2021, we're going to see organizations go beyond implementing point tools, they're going to use the pandemic to restructure their entire business. Erik, how do you see it, and what are the big players like Microsoft that have entered the market? What kind of impact do you see them having? >> Yeah, completely agree with you. This is a year where we go from small workloads into real deployment, and those two are the leader. In our data, UiPath by far the clear leader. We are seeing a lot of adoptions on Automation Anywhere, so they're getting some market sentiment. People are realizing, starting to actually adopt them. And by far, the number one is Microsoft Power Automate. Now, again, we have to be careful because we know Microsoft is entrenched everywhere. We know that they are good at bundling, so if I'm in charge of automation for my enterprise and I'm already a Microsoft customer, I'm going to use it. That doesn't mean it's the best tool to use for the right job. From what I've heard from people, each of these have a certain area where they are better. Some can get more in depth and do heavier lifting. Some are better at doing a lot of projects at once but not in depth, so we're going to see this play out. Right now, according to our data, UiPath is still number one, Automation Anywhere is number two, and Microsoft just by default of being entrenched in all of these enterprises has a lot of market share or mind share. >> And I also want to do a shout out to, or a call out, not really a shout out, but a call out to Pegasystems. We put them in the RPA category. They're covered in the ETR taxonomy. I don't consider them an RPA vendor. They're a business process vendor. They've been around for a long, long time. They've had a great year, done very, very well. The stock has done well. Their spending momentum, the early signs in the latest survey are just becoming, starting to moderate a little bit, but I like what they've done. They're not trying to take UiPath and Automation Anywhere head-on, and so I think there's some possibilities there. You've also got IBM who went to the market, SAP, Infor, and everybody's going to hop on the bandwagon here who's a software player. >> I completely agree, but I do think there's a very strong line in the sand between RPA and business process. I don't know if they're going to be able to make that transition. Now, business process also tends to be extremely costly. RPA came into this with trying to be, prove their ROI, trying to say, "Yeah, we're going to cost a little bit of money, but we're going to make it back." Business process has always been, at least the legacies, the ones you're mentioning, the Pega, the IBMs, really expensive. So again, I'm going to allude to that article I'm about to post. This particular person who's a lead tech automation for a very large company said, "Not only are UiPath and AA dominating RPA, but they're likely going to evolve to take over the business process space as well." So if they are proving what they can do, he's saying there's no real reason they can't turn around and take what Appian's doing, what IBM's doing and what Pega's doing. That's just one man's opinion. Our data is not actually tracking it in that space, so we can't back that, but I did think it was an interesting comment for and an interesting opportunity for UiPath and Automation Anywhere. >> Yeah, it's always great to hear directly from the mouths of the practitioners. All right, brings us to number 10 here. 5G rollouts are going to push new edge IoT workloads and necessitate new system architectures. AI and real-time inferencing, we think, require new thinking, particularly around processor and system design, and the focus is increasingly going to be on efficiency and at much, much lower costs versus what we've known for decades as general purpose workloads accommodating a lot of different use cases. You're seeing alternative processors like Nvidia, certainly the ARM acquisition. You've got companies hitting the market like Fungible with DPAs, and they're dominating these new workloads in the coming decade, we think, and they continue to demonstrate superior price performance metrics. And over the next five years they're going to find their way, we think, into mainstream enterprise workloads and put continued pressure on Intel general purpose microprocessors. Erik, look, we've seen cloud players. They're diversifying their processor suppliers. They're developing their own in-house silicon. This is a multi-year trend that's going to show meaningful progress next year, certainly if you measure it in terms of innovations, announcements and new use cases and funding and M&A activity. Your thoughts? >> Yeah, there's a lot there and I think you're right. It's a big trend that's going to have a wide implication, but right now, it's there's no doubt that the supply and demand is out of whack. You and I might be the only people around who still remember the great chip famine in 1999, but it seems to be happening again and some of that is due to just overwhelming demand, like you mentioned. Things like IoT. Things like 5G. Just the increased power of handheld devices. The remote from work home. All of this is creating a perfect storm, but it also has to do with some of the chip makers themselves kind of misfired, and you probably know the space better than me, so I'll leave you for that on that one. But I also want to talk a little bit, just another aspect of this 5G rollout, in my opinion, is we have to get closer to the edge, we have to get closer to the end consumer, and I do believe the CDN players have an area to play in this. And maybe we can leave that as there and we could do this some other time, but I do believe the CDN players are no longer about content delivery and they're really about edge compute. So as we see IoT and 5G roll out, it's going to have huge implications on the chip supply. No doubt. It's also could have really huge implications for the CDN network. >> All right, there you have it, folks. Erik, it's great working with you. It's been awesome this year. I hope we can do more in 2021. Really been a pleasure. >> Always. Have a great holiday, everybody. Stay safe. >> Yeah, you too. Okay, so look, that's our prediction for 2021 and the coming decade. Remember, all these episodes are available as podcasts. All you got to do is search Breaking Analysis podcast. You'll find it. We publish each week on wikibon.com and siliconangle.com, and you got to check out etr.plus. It's where all the survey action is. Definitely subscribe to their services if you haven't already. You can DM me @dvellante or email me at david.vellante@siliconangle.com. This is Dave Vellante for Erik Bradley for theCUBE Insights powered by ETR. Thanks for watching, everyone. Be well and we'll see you next time. (relaxing music)

from the cube studios in Palo Alto in Boston it's the cube covering the IBM thing brought to you by IBM we're back this is the cubes coverage of the IBM think 20/20 digital experience my name is Dave Volante is a wall-to-wall coverage over the multi-day event Harish promise here he's the general manager of the IBM public cloud rishi welcome back to the cube good to see you sorry we're not face to face but this will do yeah thank you great to see you again as well and you know it is the times what do you do you know I want to start by asking you you did a stint at a large bank I'd love to talk to you about that but but I want to stay focused you said last year on the cube you can't do everything in the public cloud certain things need to remain on Prem I'm interested in how your experience at the large financial institution and your experience generally working with you know your colleagues in in the banking industry how that shaped your vision of the IBM public cloud yeah I think that's a great question you know if you think about trying to transform yourself to a public cloud a lot of people what they try to do is you know they take applications that I've been running their enterprise and they try to redo them in its entirety with micro services using as level services I mean trying to put it all up in the public cloud now you know just think about some of these applications that are running your large institution right some of them will have regulatory ruled around it some of them have latency requirements or low latency requirements I should say some of them need to be close to the back end because that's where the data is so for all these reasons you know you have to think about a holistic cloud picture of which public cloud is you know integral to it but some of the things will need to remain on Prem right so when I build my public cloud out for IBM I kind of keep those in in the back of my mind as I get the team to work on it to ensure that we have the right capabilities on the public cloud and then where it makes sense you know have the right capabilities on the hybrid side as well working with my colleagues in IBM well you know the doc Ovid 19 pandemic that we've been talking to a lot of CISOs and CIOs we had a couple of roundtables with our data partner ETR and it was interesting you know organizations that maybe wouldn't have considered the cloud certainly as aggressively maybe they put some test dev in the cloud but you know have said well we're really reconsidering that one CIO actually said you know I'd love to delete my data center but but to your point you can't just delete the data center um first of all you don't want to necessarily move stuff second of all we've got a lot of experience from a consulting standpoint looking at this if you have to migrate migrates like an evil word especially with mission critical systems if you have to freeze code and you can't upgrade you know for some number of months you may be out of compliance or you're not remaining competitive so you have to really be circumspect and thoughtful with regard to what you do move I wonder if you could comment on that no I completely agree with what you're saying you know if you think about to your point right with Kovac things that really changed I've been speaking with a lot of cloud transformers I would say you know in the various industries but specifically with banks as well and the cloud leader for one of the large European banks said to me he said this was amazing because for four years he's been trying to get his he shows organization and risk and compliance etc to get their heads around moving applications to the cloud and he said that you know one month of kovat and having everyone locked down and home has been able to unblock more than what he's tried in the last four years so that's telling in itself right so look you know I've been working on public clouds for a good long time now both from a provider side as well as a consumer side and while you know you certainly just can't close your data centers that are running your large enterprise overnight you certainly can take a lot of stuff over there and move it to the public cloud in a meaningful fashion where you're able to take the pieces that really iterate more rapidly where you can get the end while keeping your data safe and you know being able to connect back into your back-end systems which will run a lot of your large processes in your enterprise as well so I think there is a balance to be had here and people especially banks I would say haven't been moving so much to the public cloud and I think this is the time where they're starting to realize that there is a time and place for a bunch of applications that can safely move and that gives them the agility and the productivity while everyone's locked at home and I think that's the eye opening so I'd love to have a frank conversation about why the IBM cloud I mean you know you got the the big guys you know Amazon Microsoft and Google maybe not as large people put them sort of in a category of hyper scalars great fair enough that people oftentimes dismiss you know the IBM public cloud however your point that you just made is critical and Ginni Rometty you was the first to kind of make this point Arvin's picked up on it that 80% of the workloads still are on trem and and it's that hard to move stuff that hasn't moved so and that's kind of IBM's wheelhouse I mean let's face it that the hard stuff it's the mission-critical you're kind of running the the banks and the insurance companies and the manufacturers and airlines around the world so what's the what's the case for the IBM cloud why the IBM cloud and why even move that stuff why not just leave it where it is yeah so I think there's a couple of answers here right one of them is the fact that when you talk to the hyper scalars and by the way I can't stress enough or a hyper scaler as well right people have taken a look at iCloud from about two plus years ago which you know at which point in time we were not but we certainly are and we can provision via size and so on and so forth as best as the best guys can so I want to just get that out of the way but to your point you know the reason why you would consider the IBM public cloud is when you talk to the other people they come at it from a very narrow perspective right they think about you know use vs is on x86 using cloud native pass services now you know I want to stress again that we do all three of those things extremely well but if you think about how large enterprises work nothing is as clean as that I did say there is a lot of applications that I've been running your institution that you can just willingly rewrite and then you have bare metal you'll have power systems whether it's AIX or I you'll have some Z in there Z Linux in there and then there's containers and then there's the VMware stack and there's containers running on bare metal containers running on vsi containers running on you know the VMware stack as well as the other architectures that I mentioned so we really meet our customers where they are in their journey and we give them a wide variety of capabilities and choices and flexibility to do their applications on the public cloud and that's what we mean by saying our cloud is enterprise ready as opposed to the nano answer of you'll do everything with vs is x86 and a service yeah I like that and I want to I want to circle back on that thank you for clarifying that point about hyper skills having said that it I've often said and I wonder if you could confirm or deny it's not IBM strategy to go head-to-head on cost per bit even though you you will you'll price it very competitively but your your game is to add value in other ways through your your very large software portfolio through AI things like blockchain and differentiable services that you can layer on top I've often made the point I think a lot of people don't understand that that insulates IBM from a race to the bottom with the alcohol traditional a cloud suppliers I wonder if you could comment yeah you know so I have to stress the point that just because I talk about all our other distinguishing capabilities that people don't walk away with the impression that we don't do what any of the other large cloud service providers do you know to your point we have AI we have IOT we've got a hundred ninety API driven cloud native pass services where you can write a cloud native application just like you build on the hyper scale other hyper scalars as well right so we give nothing away but for us the true value proposition here is to give you all of those capabilities in a very secure environment you know whether it is the fact that we are the only cloud where we don't have access to your data or your code because we have a keep your own key mechanism where we as a cloud service provider have no access to your key nobody else can say that so it is those Enterprise qualities of service and security that we bring to the table and the other architectures and the other you know constructs around bare metal and containers etc that distinguishes us further right and that's how it really so these are really important points that you're making and I know I'm kind of bringing out probably parts of the landscape that IBM generally doesn't want to talk about but I think it's important again to have that frank conversation because I think a lot of people misunderstand IBM is in the cloud game not only in the cloud game to your point but has very competitive you know from an infrastructure standpoint so many companies in the last decade we saw HP tried to get in they exited very quickly Joe to cheese's the CEO of EMC said we will be in the cloud you know they're buying mozi and you know exiting that so Dell right now doesn't you know it won't have a cloud play VMware tried to get in and now its course big partner of yours so you got in and that to me is critical just in terms of positioning for the next decade and beyond and and the other piece of differentiation that I want to drill into is the financial services cloud so what is that you obviously have a strong background there let's let's dig into that a little bit yeah if you look at the way most banks or actually every bank uses a public cloud is they build guardrail right they build guardrails from where their data center ends to where the public cloud begins but once you get into the public cloud then it really depends on the security that the cloud service providers provide and the csps will tell you that they have a lot of secure mechanisms there but if you ever speak with a bang you know they will never put their highly confidential data bearing apps with PII on a public cloud because they don't feel that the security that the cloud service providers provide is good enough for them to be able to put it there safely number one and number two prove to their regulators that they are in fact and compliant so what we've done is we work with a Bank of America and now you know a whole bunch of other banks that I'm not allowed to mention by name as yet where we're building a series of controls right these are both controls during your dev Sakharov cycle when you're building your app and another 400-plus controlled and the runtime that allow you is the bank to securely take your apps that have highly confidential data in III and put it on the public cloud and will give you the right things whether it's the isolation of the control plane and the data plane or it's their data loss prevention mechanisms the right auditing points the right logging points the right monitoring points the right reporting data sovereignty so we have controls built into the cloud that enable you to do all of this now banks will be quick to tell you that the onus of proof is on them alone to the regulators and we can claim that for them and they're absolutely right but today they spend hundreds of millions of dollars collecting all of that in providing that proof to the regulators you use our cloud we automate a whole bunch of that so you're not number one as a bank trying to implement these controls on a public cloud because that's not your job that's not your core expertise and number two when you actually build these compliance report you spending you know millions and millions of dollars trying to put it together whether compliance regulator will say yes this is okay we automate a large part of that for you and I think that's the key is the key issue we're solving you I want to follow up and just make sure I understand it is when I talk to executives in the financial services industry and other industries those they'll say things like look it's not that the cloud security is is bad it's just that I can't map the edicts of my organization into it certainly easily or even at all because I'm getting a sort of standard set of capabilities and it may not fit with what I need what I'm what I what I'm hearing is that IBM you know you guys are enterprise-c you used the specials but but so that's part of it but you also said you know they feel sometimes the cloud is that the security is not good enough and I want to understand what that is specifically if IBM is doing something differently so two things there one is your willingness whether it's auditability transparency mapping to corporate edicts and it may be other things that you're doing that make it better relative to go together yeah absolutely so one of the things is as I mentioned it's the mechanisms like keep your own key which is fundamental to building some of these compliance safeguards in but the the fundamental different thing we've done here is we work with the Bank of America and we've defined these controls to use your language that maps to their edicts right which should map to every banks edicts no you know there'll be a couple of extra controls here or there but largely they're all regulated by the same regulator so what satisfies one bang for the most part satisfies every other bank of the US as well right and so specifically what we've done is we've built those controls whether they are preventative controls or compensating controls in the CI CD pipeline as well as in the runtime on the cloud and that gives them a path to automation to produce the right results and the right reports to their auditors and that's really what we've helped them do so I know I'm pushing you here a little bit I'm gonna keep pushing if that's okay I was a great conversation when when IBM completed the acquisition of Red Hat you know the marketing was all about cloud cloud cloud and I came out and said yeah okay fine but what it's really about is application modernization that's the near-term opportunity for IBM you certainly saw that in the last earnings report where I think you're working with a hundred plus you know clients in terms of their application modernization so I said that is the way in which this thing becomes a creative which by the way it's already a creative and from a cash cash flow standpoint but but but but I'm gonna press you on on the cloud piece so talk about Red Hat and why it is cloud in terms of a cloud play yeah so you know this is the power of Red Hat and the IBM public cloud and of course Red Hat works or the other cloud print service providers as well so if you think about modernizing your application you know the industry pretty much has standardized around containers right as the best way to modernize their applications and those containers are orchestrated by kubernetes that's the orchestrator that's basically won the battle and Red Hat has OpenShift which is a industry-leading capability you know it's a coupon IDs control plane that manages containers and we from IBM we've put our content we've read backer a content into containers and we've made it run on an open ship and we have a cloud managed open ship server on the IBM public cloud as well as an on-prem that really helps bring our content to people who are trying to modernize their applications now think about an application that most people try to modernize you know the rough rule of thumb about 20 to 25 percent of it there's application code that is the onus is on the client to go and modernize that and they've chosen containers and turbidities and the other 75 to 80% arguably is middleware that they've got right and we've really tected in refactor that middleware into containers managed by open ship and we've done 80% of the work for them so that's how this whole thing comes together and you can run that on Prem you can run it on the IBM public cloud and I give you a cloud managed openshift service to do that effectively honor so that's interesting yeah that's very interesting I think there are you know probably at least three sort of foundational platforms one is obviously easy mainframe it's still much of IBM's customer base you know the tied to the Z and it drives all kinds of other software and so what the second is middleware to your point and you're saying you refactored and I think the third really is your choice of hybrid cloud strategy you kind of made the point you threw an on-prem it's to me it's that end-to-end that's your opportunity and your challenge if you can show people that look we've got this cloud-like experience of from cloud all the way to RM multi clouds that is a winning strategy it's jump ball right now nobody really owns that space and I think IBM's intent is to try to go after that I think you've called it a trillion-dollar market opportunity and it's obviously growing yes that's exactly right and the P spot so that I've been describing to you the you know the way people modernize our applications all fit very nicely into that now if you speak with the analysts they're going towards a whole different category called distributed cloud which basically means you know how do you bring these capabilities that run on your public cloud do on-prem and do other people's clouds and you know what I hinted at here is that's exactly where we're going with our set of capabilities and that is a technical journey I mean kubernetes is necessary but insufficient condition to have that sort of Nirvana of this distributed massive distributed system bring in edge edge systems as well so this is a you know at least a multi-year maybe even a decade-long journey there's a lot of work to be done there what would you say are their strategic imperatives for IBM cloud over the next several years so I think for us really it is you know building on this notion of the distributed cloud as I talked about it is you know fully building out the FSS cloud most of which we've already done and you know some of these things will never be at end of job because regulations keep changing and you keep adding to it and so you have to keep adding to it as well so a focus on FSS to begin with but then also to other industries as well right because there are other regulated industries here that can benefit from the same kind of automation that we're doing for FSS so we'll certainly do that and we're in a good position because it's not only our technology but it's our services practice it's a premonitory that deals with regulators etc so we have the whole package so we want to continue to build out on that branch into other industry verticals using our industry expertise across the board services product everything and then of course you know if there's one thing I BM has market permission for it is understanding the enterprise and building a secure product so we clearly want to evolve on that as well the IBM is a lot of arrows in its quiver including as we discuss cloud you know you just got to get her done as they say so iris thanks so much for coming to the cute great discussion appreciate your your transparency and and stay well Thank You YouTube thank you so much re welcome and thank you for watching everybody this is the cubes coverage of the IBM pink 2020 digital event experience we'll be right back right after this short break [Music]

>>LA from Las Vegas. It's the cube hovering AWS reinvent 2019 brought to you by Amazon web services and along with its ecosystem partners. >>Good morning. Welcome back to the cubes coverage of AWS reinvent 19 from Las Vegas. Lisa Martin with Stu Miniman. Stu, this is day three of two sets of coverage for the cube and this expo hall has not gotten any less busy. Tons of people still here. >>Lisa, 65,000 I'm sure the throats are a little bit raw. The feet are tired, but there's so much good information and yeah, excited to dig in with some more of our guests. >>Yeah, so much good information that we have. Dell EMC back. Yes, we had them yesterday. There's more to talk about today. Please welcome a couple of guests. We've got Nick Brackney, senior consultant cloud at product marketing. Welcome to the queue of your first time. Happy to have you and Bob Ganley. I feel like it's been about 18 hours, maybe 20 senior consultant cloud product marketing. Welcome back. Thank you. So guys, lots of news like AWS news shot out of the cannon. One of the things though that you can't help but talk about at any event is multi-cloud organizations. The CIO is tell us on the cube all the time. We've inherited the multi-cloud. Sometimes Dave Valentic calls it a crime scene, right? For various reasons. It's not necessarily strategic, but it is becoming a reality. Talk to us about what Dell EMC is seeing. What your customer base with respect. Sorry, that's for Nick multi-cloud. Why, what are you seeing? How are you helping customers navigate it? >>Yeah, I think that, uh, there's a lot of diversity in needs for their customer base and it's really challenging for any one vendor to provide all of the solutions that they need. And so that's, that's where it's really about being able to offer them choices and giving them support to be in the right cloud for their workload. And so as we talk about this idea of cloud in the state, you said, you know, if, if they're in one or more clouds, it's really important that they have consistency across those clouds because otherwise the crime scene turns into something that's a, a management headache for everyone. >>Yeah. Nick, I wonder if we could tease that out a little bit because consistency's important. You know, when I think about, you know, multi-vendor in the data center for years, you know, VMware did a pretty good job of abstracting a certain layer. I'm a little worried that we're trying to recreate some of the silos of the past, you know, in giant cloud environment. So how do we make sure we learn from the past? And because skill sets are very different, the products underneath are very different. So while there might be certain point applications that I might need, the message here at Amazon is, you know, they've got the broadest and deepest environments they are. If you're doing multi-cloud, they're gum. Do one of them. So, you know, bring us inside your customers and how we make sure that we don't end up with that crime scene that Dave talked about and uh, all the pieces. >>I think first off, you can't look at technology in a vacuum. You really have to be thinking about people and processes. What can a business actually consume? You know, we run into a lot of talking about containers and containers is a great path forward to go cloud native. And that's really easy if you're starting from scratch. If you have a thousand apps though that currently sit in on premises, it's really challenging to make that move. And you know, which ones do I replatform, which ones do I lift and shift. And so I think that's one of the things we're doing with, you know, I work with VMR cloud foundation is we have one platform that can handle both virtualization and containers so you can have a orderly progression towards cloud native. >>What about the people part of it? I think we talked about this a little bit yesterday, Bob, and that's actually something that has come up in a lot of our conversations is it's not just about the technology for many reasons. How do you help the people? Because part of that's cultural and that's a really a challenging change to undergo. >>You know, I think you have to meet them where they are. Right? And that's, I read an article and someone said that the, uh, for, for analytics that most CEOs still are using Excel. There are all these other really advanced analytics things, but that's what they're most comfortable with. So when we look at the, the fact that all these organizations have really standardized on VMware, that's a really easy move for them to make because you can take your existing skill sets, you know, the, the investments you've made in the software defined data center and now you can extend them to the cloud and you can take the existing best practices that you have in your data center and you can move those to the cloud. So you're not surprised when you get there with all of the configurations and all the management, all the security challenges. >>And I want to add to that actually because I think one of the underlooked aspects of this whole thing is the idea that, like you said, if you have silos of operation, then you've got challenges. And so I like to say security for example, begins with who are you, what do you have access to? So if you have different ways of doing that on prem than in cloud, you're by definition at a riskier state. Same thing for compliance. Same thing for automation. If you've got multiple different tools to use, you know, it's just harder to do. So I think, you know, the consistency thing is very, very important. >>Excellent. Bob, you, you're the straight man for my next question here because, uh, if you listen to our hosts here of AWS, they don't use that multi-cloud word yet. The biggest conversation of discussion that I've had across with AWS with customers and uh, you know, with the ecosystem here has been outposts and absolutely Amazon might not even use the hybrid term, but absolutely is that extension between inconsistency between the public cloud and in my data center. So I'd like to hear, you know, Dell Dell's perspective outposts of course, hugely important. Sure. >>You know, I think it'd be really easy or almost trite to say that, Oh, you know, Amazon is justifying the fact that there's on prime infrastructure, right? I mean, Andy comes out and says 97% of it revenue still on prem. I think, you know, everybody understands that. I think it comes down to the following investment protection, trust and choice and investment protection is about organizations today have a huge investment in the way they're doing business now and clearly VM where's the lion's share of on-prem virtualization today? So it makes sense to extend that investment toward hybrid cloud and there's a very natural path to do that from the perspective of trust. When you look at on prem infrastructure, who better to work with in Dell EMC? I mean we're number one in HCI, number one in servers, number one in storage, we know how to do on prem and now with Dell technologies cloud we're extending that to a very consistent hybrid cloud model with AWS. >>Uh, and the third thing is, you know, choice, which is outposts is interesting because it's a completely managed service. Some organizations want that managed service. What we bring to the table with Dell technologies cloud is either Delta technologies, cloud platform, which is you manage it the way you normally manage it or the VMware cloud on Dell EMC, which is a completely managed service. So we have the data center as a service offering. We have the you manage it mr customer, which aligns with the way they're doing business. And I think last but not least is this whole idea of cloud economics and this concept of allowing people to pay for things by the drink, which is something that, you know, we're helping organizations do with their on premise. >>Bob actually just want to make sure I understand what you're talk about that managed service, the outpost solutions with VMware's expected in 2020. Does that then roll under the Dell technology cloud offering on E on VMware? I just want to make sure how I ended, how that is expected to. >>Yeah. So no it doesn't because that's essentially um, the Amazon hardware with the VMware stack on it on premises. And what we're offering for a data center as a service solution is a VMware cloud on Dell EMC, formerly known as project dimension, which is, you know, the trusted Dell EMC hardware with the verified VMware stack very tightly integrated. So it's cloud like operations on premise. >>Yeah. Yeah. So similar consumption models, similar design points, but different hardware stacks, >>consumption models, which is I think, yeah, I was going to say one of the other things you have to look at too when you're thinking about why now, why is this happening? And I think it's because people are starting to realize something that we've been saying for a long time, which is that cloud isn't a place, it's an operating model. And so by being able to bring that into the data center, what you're doing is you're extending it to more workloads. And I think that's great for customers. That's what they want and that's what we're trying to build ourselves. >>Bob, a question for you, some of the aligning with Stewart's question this week since the announcement of outpost, what Amazon is doing announced last year coming to fruition now, what are some of the things that you're hearing around the event from Dell EMC customers? Are they, are they understanding what that opportunity is for them? Yeah, >>we've been doing this for a while, right? So, um, VMware cloud on Dell EMC has been general availability since VM world of 2019 we announced it in 2018 we've got tons of customers that are very interested, thousands of customers running, um, within VMware cloud on AWS and now looking at this data center as a service solution, as an extension to that on prem. The thing that's cool about it is that they don't have to touch the hardware, they don't have to touch the software. It all gets managed remotely, but it's used just like on prem infrastructure. Right. So it's a great solution. >>Yup. Nica what one of the things that always gets talked about here is there's a big shift from apex to AFEX, uh, at this show. Uh, one of the things that surprises me as customers get all excited, Amazon comes out with new feature and they said, Hey, we're going to give you insight and we're going to save you 30% over what you were paying last year. Just because you probably weren't configuring it crate in your world. If you came to a customer and said, Oh, Hey, we oversold you stuff in this there, they'd probably be walking you out the door. But Dell has been doing some interesting things, going more cloud native with the economic model. Maybe speak a little bit to that. >>I have, I mean, I think it's something that's great. You know, cloud economics makes it easy to get going with a, with a small investment and scale out and, and, uh, move more quickly when be more agile. And so what we wanted to do was bring that same agility and ability to kind of innovate, uh, and, and not have the cost be a barrier by then extending that across our portfolio at Dell technologies on demand. So that's really about, you know, whether you want to do metered usage, whether you want a subscription or whether, you know, I want to, uh, you know, purchase hardware upfront, wait till I'm going to hit the switch and turn it on, and then I'll start getting built. But then I have the idea, the same thing as cloud, where it's, it's this idea of unlimited capacity at your fingertips, right? It's, it's not actually unlimited. We sometimes see that some, even some clouds run out of space, but it's, it's, you're able to move quicker. You don't have to wait those three, four, six weeks for the hardware to come in because it's already sitting there. >>Well, in legacy businesses don't have that much time because there are invariably in every industry, there is a born in the cloud company that is moving faster, has a different mindset and it's probably chomping at the bit right behind them. Take over that business. If that legacy enterprise isn't able to work fast enough. >>Absolutely. But what really makes us really interesting is that we're still offering you more choices, right? So the thing is, is there are certain workloads that break cloud economics, whether it's massive storage that, you know, I always tell people, you spin up and spin down VMs, you never delete data because that is super valuable to your business or you know, uh, we find certain workloads that are steady state, right? You know, cloud is really great when you're scaling up. Scaling down, when you're, you know, flipping off the switch of the lights. When you leave the room, if you leave it on all the time it can add up. And so it's really nice not just about bringing the cloud economics into the data center, but by bringing that consistent experience across both the data center and your cloud is now you can let the business requirements and the application requirements determine what the best place to put the workload is. Yeah. >>So, sorry. So Bob won, one of the big themes at this show is transformation. You've got it on your hat. When we talk about the cloud native space, uh, we were said there were the cloud native companies, they were born in the cloud. We said there are many companies that are becoming born again in the cloud. You know, bring us inside a little bit. What you're seeing, just the discussion point is you just can't incrementally get there. It requires, you know, executive management, uh, involvement and you know, it is a radical change in the way you build your application. And that has a ripple effect through everything that you do. >>Yeah, absolutely does. When you think about it, there is an evolution happening in application architectures and that evolution is from physical to virtual to now infrastructure is a service to add the additional efficiency and automation orchestration. Now container as a service, as we see organizations moving toward cloud native and containers to platform as a service and function as a service. And when you think about that, organizations need to bring their existing investments in virtualized applications forward as they're adding on containers as they're looking at this next generation cloud native. So we believe the right solution is to preserve that investment and bring that forward. So we've been adding cloud native, um, you know, standard upstream Kubernetes distribution to, uh, our Dell technologies cloud platform and that allows organizations to extend our investments. So that's one thing is that architectural evolution. The second thing is what I call the operational evolution that's happening as well. And the operational evolution is, you know, cloud has revolutionized the way people look at it because it's so easy to use. So what we're doing is bringing that operational evolution to the data center as well, where we're completely integrating the on prem infrastructure so that you can life cycle management in an automated fashion. And we're doing that both for infrastructure as a service and now for container as a service for Cooper daddy's. So we're excited about both the architectural and operational evolution. >>Well, and Nick, I'd be curious your viewpoint of this show, it's really a interesting mix of you've got enterprise, you've got developers, you've got everything in between and personas. So brick is inside something for the conversations you're having, how you worked with some of those different personas. >>I think it's really interesting because the shift towards containers means a shift dev ops. And when you're looking at that, uh, I think what's lost in the way is when I went and talked to my friends who spent a lot of time as it ops folks, they think very differently than developers. When something goes wrong, their immediate reaction is, please roll it back. Whereas a developer, thanks, hold on, let me add some more code to this and we'll fix it that way. And so I think the challenge right now is, is the burden is shifting and it's shifting towards developers. And one of the things I think with our solution and you know, hopefully, you know, project Pacific with VMware, what's coming down the path where they're, they're injecting, you know, containers into vSphere, all of that. Hopefully what's going to come out of that is, is you're going to make the job a little bit easier for developers because when you start doing dev ops or God forbid dev sec ops, and you're burdening these people with all these responsibilities, how are they still gonna innovate? That's really a big challenge. And I think when I'm at a show like this, I hear it from both sides. So it's really fascinating to hear the different perspectives and they're not necessarily aligned. >>Yeah, it's just that the, the quick note on that, in order's keynote, he puts out the giant thing on the board. You know, everything fails all the time. That's not what the enterprise was used to in the old world. And that's what that transformation is a little bit uncomfortable for many of them. >>And speaking of being uncomfortable, you know, Bobby talked about cloud, especially next gen cloud brings up opportunities, a lot of opportunity, but with it comes architectural change as you mentioned, uh, operational change but cultural change. Final questions and thoughts, Nick, from you, what are in the respect of the opportunity, but those changes, what are some of the biggest mistakes that you're seeing enterprises make and how can they avoid those? >>Yeah, so I mean, the first thing is I think that people have been sweeping mandates. When people say cloud first as a mandate, I think what they're, what they're missing in that is there's so much exuberance. They're not thinking through what is the workload need, what does the business need? And cloud should absolutely be a big part of anyone's strategy moving forward. But you need to be thoughtful about what you do. And, and uh, Pat Pat Gelsinger talks about there's three laws, the laws of physics, the laws of economics and then the laws of the land. You know, I always joke around, we still haven't managed to find a way to travel faster than the speed of light. So latency is always an issue. And then the second thing is, uh, around the shared responsibility model. You know, when you move to infrastructure as a service, people think, wow, I, I, they're taking care of everything. This is super easy. And what they haven't always figured out is that they're still on the hook for a lot of things from a security perspective, from a manageability perspective, from a data protection perspective. And if you fail to actually address those, then you might run into some problems down the line. >>Guys, good stuff. Always so much to talk about. Thank you both for joining Stu and me on the program today. Bob, I probably see again at the airport tonight. We appreciate you joining soon and stick around on the QTC is later today. Andy Jassy AWS CEO is going to be on, but for now, I'm Lisa Martin for. Thanks for watching the cube.

>> Live from Las Vegas, it's theCUBE, covering VMworld 2018. Brought to you by VMware and its ecosystem partners. >> Welcome back, this is theCUBE's coverage of VMworld 2018 here in Las Vegas, Nevada. We'll go back to San Francisco next year, but here in Vegas, third year in a row, and I'm Stu Miniman. My cohost is John Troyer. Welcome back to the program Gil Shneorson, who's the SVP and VxRail general manager with Dell EMC. Gil, great to see you. >> Great to see you, it's still great to see you, John. >> All right, so I caught up with you at Dell World just a few months ago, down the strip. At that point, we couldn't take an autonomous vehicle. But since then, that Lyft now has like autonomous vehicles, so we know things can change pretty fast in the area. Why don't you give us, what's the update on your end? What's changed since last we talked? >> Thanks for asking. As you know, we're moving very fast. We're moving very fast, picking up many, many new customers every quarter, but the reason for that is because we keep innovating. So for example, in the show we announced a new G Series, a new 560 which is a new two-by-four Dell-based model, with more memory, more CPU, more capacity. Very popular form factor by our customers. We announced that we are now doing a simship with VMware, we're calling it synchronous releases. Our customers told us that they don't want to wait between a vSAN release and a VxRail release. We announced VxRail participation in Dell's customer loyalty program, which is a lot of features for future proof. We just included VxRail in the network fabric design center, which is kind of a sign for things to come, as where do we need the whole solution to be with networking inclusion. More configurability for VxRack SDDC, in other words, we keep moving forward very quickly. >> Gil, we've had the chance to document this since day one. So vSAN, I said when it was first announced, this was the rising tide that will really raise all the ships in what we launched as the hyperconverged environment. VxRail was, at the time, EMC and VMware creating a team together, took the product people, took some various components and made a product that really accelerated the marketplace and was very successful, thousands of customers. vSAN's got 15,000 customers, you've got to be one of the top deployments out. You're all under the Dell family, but is it still made up of those people and how does that teamwork and innovation between various groups work today? >> Look, when we did this there was no runbook. How do you take two teams from two companies? But we discovered all the time that what we've created is extremely powerful. We were growing three times the market. And usually that's not a simple thing and so on both of our sides we're doubling down. On the roadmap, the integration between the companies. And as I said, synchronous shipping is an investment, because what you really have to do is move more things towards the VMware side so testing are done quickly because you don't want to forego quality. So we're very happy with this model, and I think customers are happy with this model. You take the software, you put it with a specific configuration, you automate it to match, and you get something that's very resilient, and I think both of us know that and both of us keep investing it because it's working. >> That's great. Gil, I wanted to kind of follow on with what you said about the VMware and the Dell teams coming together. So my tribe is on the VMware side, right? And the VMware admins have always been very involved with storage. And for the last couple years they had been very involved cross-training on vSAN. So I'm kind of curious about the demand for VxRail and where it's coming from. Is it the VMware folks that are saying, "Hey, let's look at this"? Is it the C-level, is it the old storage team, is it the business unit? What's driving this transformation? >> Yeah, I'll tell you. Two years ago you needed to talk to people about why HCI. More and more, the conversation is why you're HCI. And we have a very unique position because we are part of the VMware stack. And in fact, maybe we'll touch on it later but HCI has its place, but we're already looking at what multiclouds means from infrastructure standpoint, right? And so, if it's a transformative conversation it would be some sort of an architect in that environment that's transforming. And they'd have a cloud project and they'll have a name for me, Cloud One, My Cloud, one of those. But most of the cases it's still a tech refresh, they're moving from a three-tier architecture, to a consolidated hyperconverge. And vAdmins have a lot to say. The server admins have a lot to say. And the reason they buy an appliance or basically buy our automation, because they realize that it saves them time, and it takes away risk. And many of them, by the way, choose to deploy vSAN on their own with servers which we call ReadyNodes, and they're also very successful. In other words, it's how much value you want on top of vSAN that you're willing to pay for and they're voting with their wallets. >> Yeah, Gil, I'm really glad you brought up multicloud because it's one of the big themes of the show. And it's funny, because we know that vSAN is a critical component of the VMware Cloud Foundation, the VCF stuff. But I hadn't really thought about, VxRail is just built with vSAN. So I still, even though I know it's a software thing, I think of it as an appliance and something coming from Dell. Talk to us about how VxRail fits into the multicloud world for customers. >> So VxRail, today we have VxRail and we have VxRack. They differ only in parts of the management stack on top of them. There's VxRail manager, there is an SDDC manager that comes from VCF. And by the way, those over time will find their way into somewhere of a consolidated stack. And the reason I'm talking about multicloud today is because we have not, we keep innovating with the vSAN team. We keep benefiting from their innovation, we keep adding on top of it. But more and more you'll see us integrate with other parts of the VMware stack. So for example, I think Pat touched on our future or upcoming integration with our Cloud Assembly services. So you can take a software-based management vRealize and manage VxRails that you own as a service. So our current roadmap in investments are not only to invest in being the most resilient, robust, vSAN-based infrastructure, but tying to every part of the VMware stack so we can really be that infrastructure for multicloud. So between VxRail and VxRack and the different touchpoints across the stack, we're really weaving it into the entire stack. That's our strength, we are a VMware product essentially. And so we realize that we need to take the whole breadth of the VMware stack and integrate as appropriate at every level, so this choice becomes a no-brainer for customers. >> Gil, since VxRail is an appliance, how often does it get updated and are people capable of taking those updates since it's an engineered system like that? >> Yeah, look, in the past, when people wanted a lot of things to work together, they'd qualify them, they'd test them and then they'd go upgrade them manually. Piece by piece through a recipe, if you will. What we've done in the appliance model, we've added our own IP which basically takes all of that and automates it. So what our customers get is a downloadable package from Dell EMC that includes the entire VMware stack update, all of the drivers, all of the firmware involved, and does a one-boot update for each node in the cluster and cycles through it automatically. So, because we now are synchronously shipping with VMware, and by the way, customers are concerned with express patches. Those we do within seven days, or even faster. So every time VMware moves forward, every time we move forward, we package it all up and we make it downloadable and upgradeable automatically. So it happens as fast as they need it to be, you know what I mean? There's no limitation because it's an appliance, it's the same thing as having a stack. >> Gil, I'm wondering if we can talk a little bit up the stack. The early customers that I've talked to, we know that modernizing your applications can be really challenging. A pattern that I've seen from a number of customers is step one, modernize the platform, step two, start modernizing the applications. What are you seeing from your rack and rail customers as they go through that kind of transition? >> That's a good question. (chuckles) I think most of the customers we're talking to today are still modernizing the infrastructure. That's the reality. They need a more agile environment because they need to take care of things up the stack and go into development models of all sorts. You can also see that there's a lot of success with our joint work with Pivotal on Pivotal Ready Architecture. And so Pivotal and us have created the Ready Architecture, based on VxRail. The value in that is really Cloud Foundry and what it brings to the table, and the design. And we see a lot of adoption for that, so people are adopting Cloud Foundry as a development model and a deployment model. They're using VxRail as an infrastructure, and obviously because of its ability to migrate across environments, that infrastructure transcends, it makes sense. So there are two angles, but I think a lot of people are still modernizing their base infrastructure to be ready for greater things. >> Absolutely. All right, Gil, want to give you the final word. What should we be looking for from your group as we go through the rest of 2018? >> We're going to keep moving, we're going to keep innovating. We're going to make sure that the solutions fit into the existing VMware environments in a more seamless way every time we work on it. And I got to say, if there are customers watching this Cube interview, I keep reaching out to customers saying, look, we have many, many thousands of customers now. We do not want to lose the intimate relationship with them. So if anybody's watching and they're interested in a conversation telling us what they wish to see on the roadmap, voicing their opinions directly to the product group, I know my title and Twitter handle are going to be here at the bottom, I invite people to reach out and talk to us. >> All right, great closing point. Gil, we're always loving fostering conversations and feedback. So, Gil Shneorson, his Twitter handle's on a screen in case Shneorson doesn't come off your keyboard nice and easy. John Troyer, and I'm Stu Miniman, we're also, always love the feedback when you send it on Twitter. And we'll be back with lots more coverage here from VMworld 2018, thank you for watching theCUBE. >> Thank you. (electronic music)

>> Announcer: Live from Chicago, Illinois, it's theCUBE! Covering VeeamOn 2018. Brought to you by Veeam. >> Welcome back to the windy city, everybody. This is the Cube, the leader in live tech coverage. We're here covering VeeamOn 2018, #VeeamOn. My name is Dave Vellante. I'm here with Stu Miniman, my co-host, Brian Kuhn is here. He's the chief digital officer at OVH US. Thanks for coming to theCube. >> Thank you very much for having me. >> Yes, so OVH, a lot of people might remember OVH vCloud Air >> Yeah, that whole thing happened almost a year ago actually so the acquisition of vCloud Air happened May eighth of 2017 so we're just a little over a year since the acquisition happened. >> Dave: Alright, how's it goin? >> It's going great! What it means is we've been running that business for about a year now, the European side of the business came a little bit later, but learning all about our customers, learning what they need, and finding new ways of making them happy. >> The epic nature of the return that VMware gave to its ecosystem is well documented. Tod Nielsen, the former COO if VMware used to talk about how every dollar spent on a VMware license 15 dollars was spent in the ecosystem. Everybody was really freaked out that the Cloud was going to destroy that ratio, it was going to decimate the ecosystem. Fast forward, I don't know five-seven years later, VMware is certainly growing, the ecosystem seems to be thriving. What's your take? >> Well I agree with you, the ecosystem is thriving, we're here at a conference that's part of that ecosystem. In terms of what we do, in terms of what OVH is, as an infrastructure provider, we're thankful that it's thriving. Because we have other opportunities to serve customers needs based based on that VMware stack, and based on the services that that ecosystem provides to the customers. >> Why is the data center booming right now, in your view? >> Why is the data center--what do you mean by that? >> Well the data center business, the enterprise business is cranking! >> Well, I think that's partially because you have that next wave of customers that are figuring out that being in the Cloud is a better thing than being on-prem and having to need those resources to manage that type of activity. >> And the data! >> Brian: And the data, yeah. >> Brian, maybe you could expand a little bit that ecosystem, because some people looked at the VMware stack and were like, ope, they're gonna--not close it, but, we've done all these integrations, we've done all these things in the data center and now when I put it in the OVH or the IBM or the AWS Cloud how many of our services can we move with them? What use is--Veeam obviously is there, partnering with you and with VMware heavily but, can you speak to kind of the breadth and depth of what did come along, and anything that doesn't come along for that journey. >> What came along as part of the acquisition, or it comes along with customer migration. >> No, no, the things that, if I did these here in my data center versus going to the OVH Cloud. I can do Veeam and interplace, there's other parts of the ecosystem that I can, but there's some things I'm--you know if I go to OVH, I'm not saying hey can I throw in my storage array with it, so that's where we're trying to understand what part of the ecosystem, when do you get it? >> Yeah, let's go with the positive side first, so it certainly as moving to a Cloud provider and someone to host your private Cloud or host your software defined data center stack. You don't have to worry about power, you don't have to worry about, in our case, water, cuz we're water-cooled technology, you don't have to worry about the network. So the infrastructure piece of managing this great, you don't have to worry about, I would say, maybe some of the redundancy-type issues or having the data center that's available. OVH manages its own network, so we don't have to worry about capacity or throughput in that means. I think on your other flip-side you're saying what can't I do, because I'm in a hosted private Cloud environment versus a co-lo or on-prem-- >> I'm just saying there's a part of my stack that I was building myself, and now you take care of it, or Amazon takes care of it, or IBM takes care of it, and maybes there's not a way for that software or hardware to come along to the Cloud. >> Yeah, your point is it hollows out the value proposition of the traditional ecosystem and moves everything into the Cloud, right? >> Stu: So somebody like Veeam's makin that transition well, but not everyone has. >> But we haven't seen that. You see well--you've certainly seen the Cloud exploding, maybe it's moderated some of the growth in the data center, but it still seems to be thriving for those companies that are well positioned. >> I don't disagree, and I'm thankful that it is, because that gives us more opportunity to help those customers out. >> So why does a Cloud service provider like yours, wrong question. What does a chief digital officer in a Cloud service provider like yours do? I started to say why does it need one, but everybody needs a CDO! But what's your role within the company? >> OVH US is a separate, standalone company than OVH Group, partially because of, how we want to make sure the, data sovereignty is covered and protecting our European customers. So we are bringing up a standalone company. So Russ Reeder was here, you spoke with him at VMWorld last year, he's the CEO, so he has his own staff, and one of the people on his staff is me, as the chief digital officer. Up until recently I managed marketing so that was part of my portfolio but we still have my title as chief digital officer so that we can serve strategy. So what are we going to do, how are we going to serve our customers, what are the segments that we're going to tackle, and how are we going to take and go to market and take those service offerings forward, and what is the market doing, and how is it moving? And so I have a team that's working on strategy, and that's a separate strategy than what Group has because we're tackling a different market segment. I also have a team of product managers, so looking at, okay this is our strategy, what are the offerings that we have at our disposal? What do customers--more importantly, what are their needs? How do I serve those needs and get those needs met, and how do I work then, with the engineering team, to actually build those products? So I have a team of product managers. I also have a team of, what I'll call, the sales enablement team. So technical marketing managers, or solution architects, find a term for them, but these are the folks that are ensuring that we have good strong hand-off between product and sales. To make sure that the sales team is trained, that they understand the value propositions not only at the marketing level, but at the technical level. And then they're also the ones that are really paying attention to everything it takes to get that product out into the market the right way. >> And you still have marketing, under your?-- >> No I do not have marketing anymore, but that was a function I managed for a while. >> So strategy, product management, the specific offerings, and the sales enablement, tactical marketing-- >> And I have one last thing, customer intelligence. So once we put that product out into the market, how do we know it's being accepted, how do we know it's being adopted, what new insights can we gain to feed back into the system? >> We often say that the difference between a business and a digital business is the way in which a digital business leverages data. And so if I go through these four. Your strategy, I presume data is part of the strategy when I talk about that, the offerings, there's, maybe not, well maybe there are data offerings, but maybe how data contributes to the health of the offerings? Sales enablement, we talked about that, but then customer intelligence obviously is a lot of data, it seems like data cuts orthogonally through each of these, can you talk about the data? First of all, do you buy the premise about what a digital business is? How do you leverage data, how do you, as part of your strategy, understand as the CDO, how much time do you spend, how data effects monetization? >> Yeah, so let me take this at two angles. One, what data do I use through that process, right? So the strategy team is certainly looking at data from analysts, customer data. I like a, I've seen an analogy of a school bus, you're looking forward, you're looking in your side-view mirror, you're looking in your rear-view mirror. So forward is where is everyone going, where's the industry going? So that'll be your analyst reports. Sideways is, your side-view mirrors, what's your competition doing? So, what is the data about the competition and what movements will they be making? My rear-view mirror is what are my customers doing? So that'll tie back into that the customer intelligence team that I have, is how do my customers actually behave, and how do they stack up with where the industry is going? So there's just one set of data points and then of course my product team is taking the inputs of those strategies, and having then one-to-one conversations with customers and finding out first-hand what there needs are. So as a product management professional, there's no ifs, ands, or buts, you always want to hear it first-hand from the customer, what they have to say. >> The role of marketing, sorry, the role of data in marketing. It's not your current per view, but it's your former one, so you can speak to it I presume, can you talk about that a little bit? >> Sure, so also, two different ways. We can look at this from the perspective of an E-commerce business, or we can look at this as a B-to-B business in generating leads, right? Then there's the ecosystem of all the data around marketing beyond that. So in the E-commerce business, of course I'm looking at what's coming through the funnel, and what traffic sources are feeding into it and what's my best conversion rates and those are all great data points for something like the E-commerce business. >> Dave: For transactions? >> For transactions. Similarly, on the leads side of the business, you're still looking at traffic, you're still looking at events or whatever feeds your funnel. So what are the sources, what are the channels of leads, and how are they converting? And as I nurture the customer, how many touches does it take to bring them back, what exactly is bringing them back? So these are all further data points to feed something like the leads side of the story. If I think outside that ecosystem, you think of an event such as this is, what are going to be the best traffic drivers, and how do I know what reach I've hit? So all sorts of data points around brand, and touch, and things that'll effect that as well. >> And it's definitely a lot of affinity between marketing and digital. In fact, if I were the head of marketing, I would come to you and say, hey can you help me, with my, whether it's legion, demand gen, are there new techniques I can use besides, you know, hitting the same old cookie approaches, etc. Do you guys have that discussion and how do you participate? >> Oh yeah, and I think that my head of marketing's watching me here now is probably saying yeah and I've got some tricks that I need your help with because I've got new things up my sleeve that we need the product angle for, right? And the right product marketing spin. >> Talk to us a little bit about your customer set, there's certain GOs and verticals that OVH targets a little bit more? And any kind of use-cases customer success stories you might be able to share? >> Yeah, that's great. So, as opposed to OVH Group, and France, and the European business, where they've really come from the web hosting industry up, and they have a very specific way that they've encountered the market and penetrated. At least here in the US, we're coming into the market really from scratch, and the acquisition is really what's bringing us in. So our prime market is the market that we first got from the acquisition, so these mid-sized and enterprise companies, so defining who that demographic is first as the type of customer, second then what need are we serving for them? So in the vCloud Air experience, vCloud Air was selling data center extension, data center replacement, disaster recovery, and that is certainly what we keep selling cuz we have those thousand customers that still need that story, and that's an opportunity then to tackle more customers just like that, that have the same types of needs, that same, perhaps niche need, or common day every need because you were asking earlier, like why are all these customers-- why are all these people moving to the Cloud? It's because they're discovering that if they don't they're going to be left behind, or they've got some need inside their company that is forcing them to do that, whether it's to save cost or what have you. So, in the case coming back to our customers is, it is the mid and enterprise-sized companies, we're still serving everything that is will lead in with private Cloud technology, and bring to them those data center extension, data center replacement, disaster recovery stories and we'll augment that because, what's different about us now is, we're OVH, and we have not only that hosted private Cloud product, but we also have dedicated servers, we also have public Cloud, and then we have this really fantastic backbone: we own our own network. We have this huge amount of capacity, 14 terabytes per second with that, we have an anti-DDoS solution behind that, and these are all things that we get to bring to those customers and introduce them to. So for a customer who's doing their digital transformation, migration to the Cloud, it's not just hey we can bring you over on your VMware stack and migrate you in, but it's hey we can do that plus a lot more that maybe you didn't know that we could do for you. >> Let's talk about that a lot more, are those professional services or other offerings that you have? >> Sure, so it's primarily the offerings themselves, the services. You asked me about customer so I'll give an example. We have a customer today that has come to us because of the data center consolidation need. They brought that in and also needed disaster recovery, but what they're finding now is they have a large amount of data. And what is best for them is an object storage solution, so augmenting the host to private Cloud with our Cloud offerings to solve that need. >> Last question is, so how do you guys position, relative to some of the other things that you know, for instance Vmware, we just had IBM on, IBM Cloud obviously they make a big deal out of AWS because they're such a hot company right now. How do you guys differentiate from those other offerings? >> That's a really intriguing question, right, because that's the key is how are we different? We wanted to come in and be your trusted Cloud provider, to help you do what we're going to be first, really good at, so we're really good at that VMware stack, we're going to bring you in, help you migrate to the Cloud, we're going to run and manage that business for you, or the operation of your data center, and your infrastructure. But what goes around that then, is you know, that is our core, infrastructure is our core business, so we build our own servers, we build our own data centers, we own our own network, so that is what we do best for you. But that's coupled with the fact that we're doing innovation with purpose. We've learned how to do the building of those data centers, and do water-cooling to save on costs, we've learned how to do all of this at high-capacity automation capabilities so that you have lightning speeds to get your provisioning up and running. Then we also have this concept where OVH is really about being open, so something that does differentiate us and set us apart is the freedom for you to build your infrastructure, and the freedom to choose your offerings and your providers. So OVH sponsors an open Cloud foundation and we believe in the opening of that, we use opensource technology, we use OpenStack in a lot of our products so that you have that there, we're believing that, we have the inner connectivity with our pops to other networks, if you so desire. That openness is something that sort of permeates through us and then lastly, it's our passion for our customers. We're serving 1.3 million customers around the world today, from fortune 500 companies to top-tier educational institutions, and in the case, in France, with small/medium businesses and individuals. So we have a very wide range of customers that have trusted us to host their infrastructure, and we like hearing feedback. We love operating on that feedback, and we love solving the needs for our customers. >> Alright, Brian we'll leave it there, thanks very much for coming on theCUBE. >> Great, thanks so much for having me! >> You're welcome! Okay, keep it right there everybody, we'll be back with our next guest right after this short break, you're watching theCUBE, live from VeeamOn 2018, be right back. (bubbly music)

>> Narrator: Live from Las Vegas, its theCUBE, covering Dell Technologies World 2018. Brought to you by Dell EMC and its ecosystem partners. >> Welcome back to theCUBE, SilconANGLE's premier live streaming show where we go out to the events and extract the signal from the noise we are live day two of Dell Technologies World. I'm Lisa Martin with Keith Townsend, welcoming back a CUBE alumni, Gil Shneorson Senior Vice President of VxRail and GM at Dell EMC. Hey Gil. >> Thank you for having me back. >> Well we're excited to talk to you. So looking at some of the announcements that came out today where Dell EMC says they're the number one market leader in global hyper-converged infrastructure, and you've said that's happened really quickly. Tell us a little bit about that leadership. >> I think we found a way to take a systems approach to what is otherwise a software-defined world. So we found a way to get all of the economical benefits of hyper-converged driven by software, at the same time own the responsibility for those systems to be up and running and life cycle managed, taking away more of the responsibility then customers would have to do it on their own and I think that recipe has led us to a leadership position very, very quickly. >> So, you know we talked earlier today, can you expand upon some of that responsibility alleviating from customers, specifically around SLAs, around IO when you software-define or software-deliver storage, kind of the operating model changes. Can you expand upon that? >> Yeah, that's a very good point. So look at software-defined storage technology, for example. We happen to work with VSAN, which is the leading software-defined technology, but when customers choose to deploy software-defined solutions on their own, they're doing something that they haven't been doing in many, many years, which is take on the responsibility for up timing. It used to be that storage vendors, you know held responsibility for storage up time, for IOPs, for performance. So I think what we're doing is we found the balance. We've been getting a lot of benefits of hyper-converged and software defined, but at the same time own the responsibility from an operations standpoint to make it more like a traditional architecture and what they know. And that combination is very, very important. So for example, the ability to look at the entire system from software to driver to firmware, and always deliver a known good package because something that customers would have to do on their own, and they're all capable of doing it, but if they could choose not to do it why not offload it to somebody like us that does it for them. And so while there are two deployment models, we have a very massive growth in the systems approach, model (music drowns out voice) and I think people hand off things that they could do but they choose not to because they can focus on other things in the IT shop. For example, digital transformation and really the path to the multicloud by adding more and more layers on top of infrastructure that they can trust. >> Speaking of multicloud, I was in Jeff Clarke's opening session this morning. He was talking about, he gave a stat, I think it was 50 plus to 56% of users surveyed are using more than one cloud. So one of the things I also saw in the press release about the advancements of VxRail and VxRack, giving customers a clear path to adopt VMWare-based multiclouds. What is that clear path? How was that differentiated? So let's remember that both of those products, VxRail and VxRack SDDC are products that are built on the VMWare stack. They're optimized for VMWare users. They're not agnostic to anything. They're really VMWare on VMWare with automation and hardware and packaging that we do as a system. By delivering that robust infrastructure in one of the announcements that we made was that we created the VMWare validated design to add the rest of the VMWare stack and create an infrastructure as a service environment. That inherently comes with the ability to offload workloads to VMWare's service provider, cloud service provider, including Amazon and Google and the likes, but really a very vast network. So you take an infrastructure that's based on VMWare and harden is designing the system, you add on top of it to a prescriptive VVD exactly how to add the layered toppings like VRealize Automation, and through that inherently you get the entire VMWare value proposition going from a local solution to multicloud. And so the announcement was that validated design, which is very important, and then the announcement also included all sorts of hardware innovations or small evolutions like NVMe drives and 25 gigabyte ethernet, and higher memory CPUs. All of those are just to make sure that the infrastructure itself is ready to support that software stack that ultimately leads them to a full IO solution and offloading to the multicloud that are available to them. >> So big announcement or big set of education last year at VM World was the VCF. VMWare Cloud Foundation. It is the foundation of VMWare's infrastructure cloud play. Can you help talk through the importance in how VCF differentiates VMWare, VxRail, VxRack from competitors. >> So VCF is a software bundle. It's also an orchestrator that allows customers to manage multiple VMWare clusters within context. It's called a workload domain, and they can manage those clusters, and they can deploy them, they can life cycle management, they can microsegment them with NSX, and they can move workloads between them and to the cloud. VxRack SDDC is a system that basically lays down the VCF bits on a system premanufactured, and that's how we benefit from VCF as a differentiator. What we've done in addition we've announced 14G servers to be supported in that architecture. And we've also extended it to a, for example, a dial home on a system level. A lot of serviceability features, a physical view of the service as part of the graphic user interface. So not only does VCF differentiate VMWare by having the ability to finally leverage the entire stack, our value add is in taking that in the physical to virtual integration, if you will, life cycle management, and serviceability around servicing all of the system, which makes it a very robust infrastructure. So today customers have two choices. They can buy VxRack with VCF on top of it, or they can get to the same outcome with VxRail following a VVD prescriptive. And so what we do is we let them choose. If they're not ready for an NSX deployment they'd start with one, if they are they'll start with the other. Either way the outcome is going to be a full (music drowns out voice) from VMWare that can offload to multicloud. We just give them choices of how to get there. >> So want to kind of play off the value add for a second. We're at this event, the event theme Make It Real, making digital transformation real is a mandatory for businesses, right? They have the opportunity to take and apply data to multiple cases, use cases, within their organization to deliver differentiation. So you talked about a lot of the value out of the choices that you're giving customers from an IT perspective, what are some of the business, when you're sitting there with customers, what are some of the business outcomes they're looking for this technology to help them deliver? >> So that's a good question. So two levels of an answer. One is that by getting an automated infrastructure, IT itself can free up cycle to actually implement the (mumbles). It also frees up time for those organizations who are embarking on native cloud application development. For example, to deploy pivotal Cloud Foundry on top of (mumbles) Which is another prescriptive reference cycle actually that we have out there. And allow them to innovate. What I'm most interested in when I visit customers is what workloads are running on HCI. And I ask them and they say, is it testive, is it mission critical? And I'm happy to see that by now HCI, and specifically our products, have become mission critical, data centered, so all the way from the core to the edge running, banking applications a scale, running trading applications scale, running manufacturing application scale, running ports all over the world. I mean there's one customer that runs ports with automated trucks where the AI that runs those trucks is running on a VxRail. I mean, it's very, very exciting to see how our technology has been adopted into mainstream, into mainstream application compute. I think that's very exciting. And IT can enable more of those applications run and develop more because they have to do less in managing the physical infrastructure across multi companies. >> So Lee Caswell, Senior Vice President of Products over at VMWare brought in his customer from Celtic yesterday, and he validated that. They went all in from a legacy three tier architecture on Dell SE, they were Dell customer before, went with the Xrack, sorry VxRail, mission critical applications out the gate. So I'm seeing a shift. Last year around this time we were doing education and saying, you know, what is HCI versus a traditional architecture? Are you seeing that same thing at the show, as a shift that customers are no longer asking oh what is VxRail or VxRack, but that very thing is how can we accelerate digital transformation using VxRail or VxRack? >> Yeah, we have a very large percentage of the meetings, in fact almost 200 meetings that were requested to review the technology with us initial. That's a lot, that shows a lot of interest. There are a few customers that still don't know, and we've met some of those at the show. There are a few customers who are still contemplating whether HCI is right for them. And by the way, to those customers we say, don't rush into it, you have choices. If that's what you used to, what the economics were for you, there is no reason to rush into HCI. It's just depending on if you're going to get a better outcome than what you have today. But a very common question from customers is okay, then why do I need traditional storage? And for somebody from my vantage point, let's say there's a lot of bare-metal computing out there that requires traditional. But we think that traditional storage becomes more specialized, you know specific DR use cases, very large ratios between compute and storage and requires shared storage, but the HCI type of technology is definitely, and we see it with market growth, right? The market is growing at 60 to 70%. We're growing over 150% and taking share in this growing market, but we're still very, very small if you compare it to the whole IT tam. So there's a lot of way to go. Partly is that we still need to work on the last mile, being sure that our products are more mature, that we figure out how to operate them in a real life environment. So there's work to do, but the economical benefits are so strong that customers are making the choice more and more and more, and they trust us to know how to close the gaps that we still have. And it's a very collaborative effort between our and our customers. We listen, we respond very quickly, and so we can keep the machine going. >> It sounds like a momentum that we talked about with you I think at VM World back in eight or so months ago continues. And we want to thank you for stopping by theCUBE, sharing what's new with VxRack, VxRail, and how customers can be successful there. >> Absolutely. >> Thanks, Gil. >> Thank you for having me again. >> We want to thank you for watching theCUBE. We are live in a concert at Dell Technologies World. I'm Lisa Martin with Keith Townsend. We'll be right back with our next guest after a short break.

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