>> Announcer: From around the globe, it's theCUBE with digital coverage of VMworld 2020 brought to you by VMware and its ecosystem partners. >> Hello, welcome back to theCUBE's coverage of VMworld 2020. This is theCUBE virtual with VMworld 2020 virtual. I'm John Furrier, your host of theCUBE with Dave Vellante. It's our 11th year covering VMware. We're not in-person, we're virtual but all the content is flowing. Of course, we're here with Pat Gelsinger, the CEO of VMware who's been on theCUBE, all 11 years. This year virtual of theCUBE as we've been covering VMware from his early days in 2010 when theCUBE started, 11 years later, Pat, it's still changing and still exciting. Great to see you, thanks for taking the time. >> Hey, you guys are great. I love the interactions that we have, the energy, the fun, the intellectual sparring and of course the audiences have loved it now for 11 years, and I look forward to the next 11 that we'll be doing together. >> It's always exciting 'cause we have great conversations, Dave, and I like to drill in and really kind of probe and unpack the content that you're delivering at the keynotes, but also throughout the entire program. It is virtual this year which highlights a lot of the cloud native changes. Just want to get your thoughts on the virtual aspect, VMworld's not in-person, which is one of the best events of the year, everyone loves it, the great community. It's virtual this year but there's a slew of content, what should people take away from this virtual VMworld? >> Well, one aspect of it is that I'm actually excited about is that we're going to be well over 100,000 people which allows us to be bigger, right? You don't have the physical constraints, you also are able to reach places like I've gone to customers and maybe they had 20 people attend in prior years. This year they're having 100. They're able to have much larger teams also like some of the more regulated industries where they can't necessarily send people to events like this, The International Audience. So just being able to spread the audience much more. A digital foundation for an unpredictable world, and man, what an unpredictable world it has been this past year. And then key messages, lots of key products announcements, technology announcements, partnership announcements, and of course in all of the VMworld is that hands-on labs, the interactions that will be delivering a virtual. You come to VMware because the content is so robust and it's being delivered by the world's smartest people. >> Yeah, we've had great conversations over the years and we've talked about hybrid cloud, I think, 2012. A lot of the stuff I look back at a lot of the videos was early on we're picking out all these waves, but there was that moment four years ago or so, maybe even four three, I can't even remember it seems like yesterday. You gave the seminal keynote and you said, this is the way the world's going to happen. And since that keynote, I'll never forget, was in Moscone and since then, you guys have been performing extremely well both on the business front as well as making technology bets and it's paying off. So what's next, you got the cloud, cloud scale, is it Space, is it Cyber? All these things are going on what is next wave that you're watching and what's coming out and what can people extract out of VMworld this year about this next wave? >> Yeah, one of the things I really am excited about and I went to my buddy Jensen, I said, boy, we're doing this work in smart mix we really like to work with you and maybe some things to better generalize the GPU. And Jensen challenged me. Now usually, I'm the one challenging other people with bigger visions. This time Jensen said, "hey Pat, I think you're thinking too small. Let's do the entire AI landscape together, and let's make AI a enterprise class works load from the data center to the cloud and to the Edge. And so I'm going to bring all of my AI resources and make VMware and Tanzu the preferred infrastructure to deliver AI at scale. I need you guys to make the GPUs work like first-class citizens in the vSphere environment because I need them to be truly democratized for the enterprise, so that it's not some specialized AI Development Team, it's everybody being able to do that. And then we're going to connect the whole network together in a new and profound way with our Monterey program as well being able to use the Smart NIC, the DPU, as Jensen likes to call it. So now with CPU, GPU and DPU, all being managed through a distributed architecture of VMware. This is exciting, so this is one in particular that I think we are now re-architecting the data center, the cloud and the Edge. And this partnership is really a central point of that. >> Yeah, the NVIDIA thing's huge and I know Dave probably has some questions on that but I asked you a question because a lot of people ask me, is that just a hardware deal? Talking about SmartNICs, you talk about data processing units. It sounds like a motherboard in the cloud, if you will, but it's not just hardware. Can you talk about the aspect of the software piece? Because again, NVIDIA is known for GPUs, we all know that but we're talking about AI here so it's not just hardware. Can you just expand and share what the software aspect of all this is? >> Yeah well, NVIDIA has been investing in their AI stack and it's one of those where I say, this is Edison at work, right? The harder I work, the luckier I get. And NVIDIA was lucky that their architecture worked much better for the AI workload. But it was built on two decades of hard work in building a parallel data center architecture. And they have built a complete software stack for all the major AI workloads running on their platform. All of that is now coming to vSphere and Tanzu, that is a rich software layer across many vertical industries. And we'll talk about a variety of use cases, one of those that we highlight at VMworld is the University, California, San Francisco partnership, UCSF, one of the world's leading research hospitals. Some of the current vaccine use cases as well, the financial use cases for threat detection and trading benefits. It really is about how we bring that rich software stack. This is a decade and a half of work to the VMware platform, so that now every developer and every enterprise can take advantage of this at scale. That's a lot of software. So in many respects, yeah, there's a piece of hardware in here but the software stack is even more important. >> It's so well we're on the sort of NVIDIA, the arm piece. There's really interesting these alternative processing models, and I wonder if you could comment on the implications for AI inferencing at the Edge. It's not just as well processor implications, it's storage, it's networking, it's really a whole new fundamental paradigm, but how are you thinking about that, Pat? >> Yeah, and we've thought about there's three aspects, what we said, three problems that we're solving. One is the developer problem where we said now you develop once, right? And the developer can now say, "hey I want to have this new AI-centric app and I can develop and it can run in the data center on the cloud or at the Edge." Secondly, my Operations Team can be able to operate this just like I do all of my infrastructure, and now it's VMs containers and AI applications. And third, and this is where your question really comes to bear most significantly, is data gravity. Right, these data sets are big. Some of them need to be very low latency as well, they also have regulatory issues. And if I have to move these large regulated data sets to the cloud, boy, maybe I can't do that generally for my Apps or if I have low latency heavy apps at the Edge, huh, I can't pull it back to the cloud or to my data center. And that's where the uniform architecture and aspects of the Monterey Program where I'm able to take advantage of the network and the SmartNICs that are being built, but also being able to fully represent the data gravity issues of AI applications at scale. 'Cause in many cases, I'll need to do the processing, both the learning and the inference at the Edge as well. So that's a key part of our strategy here with NVIDIA and I do think is going to unlock a new class of apps because when you think about AI and containers, what am I using it for? Well, it's the next generation of applications. A lot of those are going to be Edge, 5G-based, so very critical. >> We've got to talk about security now too. I'm going to pivot a little bit here, John, if it's okay. Years ago, you said security is a do-over, you said that on theCUBE, it stuck with us. But there's been a lot of complacency. It's kind of if it ain't broke, don't fix it, but but COVID kind of broke it. And so you see three mega trends, you've got cloud security, you'll see in Z-scaler rocket, you've got Identity Access Management and Octo which I hope there's I think a customer of yours and then you got Endpoint, you're seeing Crowdstrike explode you guys paid 2.7 billion, I think, for Carbon Black, yet Crowdstrike has this huge valuation. That's a mega opportunity for you guys. What are you seeing there? How are you bringing that all together? You've got NSX components, EUC components, you've got sort of security throughout your entire stack. How should we be thinking about that? >> Well, one of the announcements that I am most excited about at VMworld is the release of Carbon Black workload. 'Cause we said we're going to take those carbon black assets and we're going to combine it with workspace one, we're going to build it in NSX, we're going to make it part of Tanzu, and we're going to make it part of vSphere. And Carbon Black workload is literally the vSphere embodiment of Carbon Black in an agent-less way. So now you don't need to insert new agents or anything, it becomes part of the hypervisor itself. Meaning that there's no attack surface available for the bad guys to pursue. But not only is this an exciting new product capability, but we're going to make it free, right? And what I'm announcing at VMworld and everybody who uses vSphere gets Carbon Black workload for free for an unlimited number of VMs for the next six months. And as I said in the keynote, today is a bad day for cyber criminals. This is what intrinsic security is about, making it part of the platform. Don't add anything on, just click the button and start using what's built into vSphere. And we're doing that same thing with what we're doing at the networking layer, this is the last line acquisition. We're going to bring that same workload kind of characteristic into the container, that's why we did the Octarine acquisition, and we're releasing the integration of workspace one with Carbon Black client and that's going to be the differentiator, and by the way, Crowdstrike is doing well, but guess what? So are we, and right both of us are eliminating the rotting dead carcasses of the traditional AV approach. So there's a huge market for both of us to go pursue here. So a lot of great things in security, and as you said, we're just starting to see that shift of the industry occur that I promised last year in theCUBE. >> So it'd be safe to say that you're a cloud native and a security company these days? >> Yeah well, absolutely. And the bigger picture of us is that we're this critical infrastructure layer for the Edge, for the cloud, for the Telco environment and for the data center from every endpoint, every application, every cloud. >> So, Pat, I want to ask you a virtual question we got from the community. I'm going to throw it out to you because a lot of people look at Amazon and the cloud and they say, okay we didn't see it coming, we saw it coming, we saw it scale all the benefits that are coming out of cloud well documented. The question for you is, what's next after cloud? As people start to rethink especially with COVID highlighting and all the scabs out there as people look at their exposed infrastructure and their software, they want to be modern, they want the modern apps. What's next after cloud, what's your vision? >> Well, with respect to cloud, we are taking customers on the multicloud vision, right, where you truly get to say, oh, this workload I want to be able to run it with Azure, with amazon, I need to bring this one on-premise, I want to run that one hosted. I'm not sure where I'm going to run that application, so develop it and then run it at the best place. And that's what we mean by our hybrid multicloud strategy, is being able for customers to really have cloud flexibility and choice. And even as our preferred relationship with Amazon is going super well, we're seeing a real uptick, we're also happy that the Microsoft Azure VMware service is now GA. So there in Marketplace, are Google, Oracle, IBM and Alibaba partnerships, and the much broader set of VMware Cloud partner programs. So the future is multicloud. Furthermore, it's then how do we do that in the Telco network for the 5G build out? The Telco cloud, and how do we do that for the Edge? And I think that might be sort of the granddaddy of all of these because increasingly in a 5G world, we'll be enabling Edge use cases, we'll be pushing AI to the Edge like we talked about earlier in this conversation, we'll be enabling these high bandwidth low latency use cases at the Edge, and we'll see more and more of the smart embodiment smart city, smart street, smart factory, the autonomous driving, all of those need these type of capabilities. >> Okay. >> So there's hybrid and there's multi, you just talked about multi. So hybrid are data, are data partner ETR they do quarterly surveys. We're seeing big uptick in VMware Cloud on AWS, you guys mentioned that in your call. We're also seeing the VMware Cloud, VMware Cloud Foundation and the other elements, clearly a big uptick. So how should we think about hybrid? It looks like that's an extension of on-prem maybe not incremental, maybe a share shift, whereas multi looks like it's incremental but today multi is really running on multiple clouds, but a vision toward incremental value. How are you thinking about that? >> Yeah, so clearly, the idea of multi is truly multiple clouds. Am I taking advantage of multiple clouds being my private clouds, my hosted clouds and of course my public cloud partners? We believe everybody will be running a great private cloud, picking a primary public cloud and then a secondary public cloud. Hybrid then is saying, which of those infrastructures are identical, so that I can run them without modifying any aspect of my infrastructure operations or applications? And in today's world where people are wanting to accelerate their move to the cloud, a hybrid cloud is spot-on with their needs. Because if I have to refactor my applications, it's a couple million dollars per app and I'll see you in a couple of years. If I can simply migrate my existing application to the hybrid cloud, what we're consistently seeing is the time is 1/4 and the cost is 1/8 or less. Those are powerful numbers. And if I need to exit a data center, I want to be able to move to a cloud environment to be able to access more of those native cloud services, wow, that's powerful. And that's why for seven years now, we've been preaching that hybrid is the future, it is not a way station to the future. And I believe that more fervently today than when I declared it seven years ago. So we are firmly on that path that we're enabling a multi and hybrid cloud future for all of our customers. >> Yeah, you addressed that like Cube 2013, I remember that interview vividly was not a weigh station I got hammered answered. Thank you, Pat, for clarifying that going back seven years. I love the vision, you always got the right wave, it's always great to talk to you but I got to ask you about these initiatives that you're seeing clearly. Last year, a year and a half ago, Project Pacific came out, almost like a guiding directional vision. It then put some meat on the bone Tanzu and now you guys have that whole cloud native initiative, it's starting to flower up, thousands of flowers are blooming. This year, Project Monterey has announced. Same kind of situation, you're showing out the vision. What are the plans to take that to the next level? And take a minute to explain how Project Monterey, what it means and how you see that filling out. I'm assuming it's going to take the same trajectory as Pacific. >> Yeah, Monterey is a big deal. This is re-architecting the core of vSphere and it really is ripping apart the IO stack from the intrinsic operation of vSphere and the SX itself because in many ways, the IO, we've been always leveraging the NIC and essentially virtual NICs, but we never leverage the resources of the network adapters themselves in any fundamental way. And as you think about SmartNICs, these are powerful resources now where they may have four, eight, 16 even 32 cores running in the SmartNIC itself. So how do I utilize that resource, but it also sits in the right place? In the sense that it is the network traffic cop, it is the place to do security acceleration, it is the place that enables IO bandwidth optimization across increasingly rich applications where the workloads, the data, the latency get more important both in the data center and across data centers, to the cloud and to the Edge. So this re-architecting is a big deal, we announced the three partners, Intel, NVIDIA Mellanox and Pensando that we're working with, and we'll begin the deliveries of this as part of the core vSphere offerings beginning next year. So it's a big re-architecting, these are our key partners, we're excited about the work that we're doing with them and then of course our system partners like Dell and Lenovo who've already come forward and says, "Yeah we're going to to be bringing these to market together with VMware." >> Pat, personal question for you. I want to get your personal take, your career going back to Intel, you've seen it all but the shift is consumer to enterprise and you look at just recently Snowflake IPO, the biggest ever in the history of Wall Street. It's an enterprise data company, and the enterprise is now relevant. The consumer enterprise feels consumery, we talked about consumerization of IT years and years ago. But now more than ever the hottest financial IPO enterprise, you guys are enterprise. You did enterprise at Intel (laughing), you know the enterprise, you're doing it here at VMware. The enterprise is the consumer now with cloud and all this new landscape. What is your view on this because you've seen the waves, have you seen the historical perspective? It was consumer, was the big thing now it's enterprise, what's your take on all this? How do you make sense of it because it's now mainstream, what's your view on this? >> Well, first I do want to say congratulations to my friend, Frank and the extraordinary Snowflake IPO. And by the way they use VMware, so I not only do I feel a sense of ownership 'cause Frank used to work for me for a period of time, but they're also a customer of ours so go Frank, go Snowflake. We're excited about that. But there is this episodic to the industry where for a period of time, it is consumer-driven and CES used to be the hottest ticket in the industry for technology trends. But as you say, it has now shifted to be more business-centric, and I've said this very firmly, for instance, in the case of 5G where I do not see consumer. A faster video or a better Facebook isn't going to be why I buy 5G. It's going to be driven by more business use cases where the latency, the security and the bandwidth will have radically differentiated views of the new applications that will be the case. So we do think that we're in a period of time and I expect that it's probably at least the next five years where business will be the technology drivers in the industry. And then probably, hey there'll be a wave of consumer innovation, and I'll have to get my black turtlenecks out again and start trying to be cool but I've always been more of an enterprise guy so I like the next five to 10 years better. I'm not cool enough to be a consumer guy and maybe my age is now starting to conspire against me as well. >> Hey, Pat I know you got to go but a quick question. So you guys, you gave guidance, pretty good guidance actually. I wonder, have you and Zane come up with a new algorithm to deal with all this uncertainty or is it kind of back to old school gut feel? >> (laughing) Well, I think as we thought about the year, as we came into the year, and obviously, COVID smacked everybody, we laid out a model, we looked at various industry analysts, what we call the Swoosh Model, right? Q2, Q3 and Q4 recovery, Q1 more so, Q2 more so. And basically, we built our own theories behind that, we tested against many analyst perspectives and we had Vs and we had Ws and we had Ls and so on. We picked what we thought was really sort of grounded in the best data that we could, put our own analysis which we have substantial data of our own customers' usage, et cetera and picked the model. And like any model, you put a touch of conservatism against it, and we've been pretty accurate. And I think there's a lot of things we've been able to sort of with good data, good thoughtfulness, take a view and then just consistently manage against it and everything that we said when we did that back in March has sort of proven out incrementally to be more accurate. And some are saying, "Hey things are coming back more quickly" and then, "Oh, we're starting to see the fall numbers climb up a little bit." Hey, we don't think this goes away quickly, there's still a lot of secondary things to get flushed through, the various economies as stimulus starts tailoring off, small businesses are more impacted, and we still don't have a widely deployed vaccine and I don't expect we will have one until second half of next year. Now there's the silver lining to that, as we said, which means that these changes, these faster to the future shifts in how we learn, how we work, how we educate, how we care for, how we worship, how we live, they will get more and more sedimented into the new normal, relying more and more on the digital foundation. And we think ultimately, that has extremely good upsides for us long-term, even as it's very difficult to navigate in the near term. And that's why we are just raving optimists for the long-term benefits of a more and more digital foundation for the future of every industry, every human, every workforce, every hospital, every educator, they are going to become more digital and that's why I think, going back to the last question this is a business-driven cycle, we're well positioned and we're thrilled for all of those who are participating with Vmworld 2020. This is a seminal moment for us and our industry. >> Pat, thank you so much for taking the time. It's an enabling model, it's what platforms are all about, you get that. My final parting question for you is whether you're a VC investing in startups or a large enterprise who's trying to get through COVID with a growth plan for that future. What does a modern app look like, and what does a modern company look like in your view? >> Well, a modern company would be that instead of having a lot of people looking down at infrastructure, the bulk of my IT resources are looking up at building apps, those apps are using modern CICD data pipeline approaches built for a multicloud embodiment, right, and of course VMware is the best partner that you possibly could have. So if you want to be modern cool on the front end, come and talk to us. >> All right, Pat Gelsinger, the CEO of VMware here on theCUBE for VMworld 2020 virtual, here with theCUBE virtual great to see you virtually, Pat, thanks for coming on, thanks for your time. >> Hey, thank you so much, love to see you in person soon enough but this is pretty good. >> Yeah. >> Thank you Dave. Thank you so much. >> Okay, you're watching theCUBE virtual here for VMworld 2020, I'm John Furrier, Dave Vellante with Pat Gelsinger, thanks for watching. (gentle music)

>> Narrator: From around the globe. It's theCUBE with digital coverage of VMworld 2020, brought to you by VMware and its ecosystem partners. >> Hello, welcome back to theCUBE's coverage of VMworld 2020. This is theCUBE virtual with VMworld 2020 virtual. I'm John Furrier your host of theCUBE with Dave Vellante. It's our 11th year covering VMware. We're not in person, we're virtual, but all the content is flowing. Of course, we're here with Pat Galsinger, the CEO of VMware. Who's been on theCUBE all 11 years. This year virtual of theCUBE as we've been covering VMware from his early days in 2010, when theCUBE started 11 years later, Pat is still changing and still exciting. Great to see you. Thanks for taking the time. >> Hey, you guys are great. I love the interactions that we have, the energy, the fun, the intellectual sparring. And of course that audiences have loved it now for 11 years. And I look forward to the next 11 that we'll be doing together. >> It's always exciting cause we'd love great conversations. Dave and I like to drill in and really kind of probe and unpack the content that you're delivering at the keynotes, but also throughout the entire program. It is virtual this year, which highlights a lot of the cloud native changes. Just want to get your thoughts on the virtual aspect of VMworld, not in person, which is one of the best events of the year. Everyone loves it. The great community. It's virtual this year, but there's a slew of content. What should people take away from this virtual VMworld? >> Well, one aspect of it is that I'm actually excited about is that we're going to be well over a hundred thousand people, which allows us to be bigger, right? You don't have the physical constraints. You also are able to reach places like I've gone to customers and maybe they had 20 people attend in prior years. This year they're having a hundred, they're able to have much larger teams. Also like some of the more regulated industries where they can't necessarily send people to events like this, the international audience. So just being able to spread the audience much more broadly well, also our key messages a digital foundation for unpredictable world. And man, what an unpredictable world it has been this past year? And then key messages, lots of key products announcements technology, announcements partnership, announcements and of course in all of the VMworld, is that hands on (murmurs) interactions that we'll be delivering our virtual, you come to the VMware because the content is so robust and it's being delivered by the world's smartest people. >> Yeah. We've had great conversations over the years. And we've talked about hybrid clothing 2012, a lot of this stuff I looked back in lot of the videos was early on, we're picking out all these waves, but it was that moment four years ago or so, maybe even four, three, I can't even remember, seems like yesterday. You gave the Seminole keynote and you said, "This is the way the world's going to happen." And since that keynote I'll never forget was in Moscone. And since then you guys have been performing extremely well both on the business as well as making technology bets and is paying off. So what's next? I mean, you've got the cloud scale. Is it space? Is it cyber? I mean, all these things are going on. What is next wave that you're watching and what's coming out and what can people extract out of VMworld this year about this next wave? >> Yeah, one of the things I really am excited about I went to my buddy Jensen. I said, "Boy, we're doing this work and smart. Next We really liked to work with you and maybe some things to better generalize the GPU." And Jensen challenged me. Now, usually, I'm the one challenging other people with bigger visions, this time Jensen said, "Hey Pat, I think you're thinking too small. Let's do the entire AI landscape together. And let's make AI a enterprise classwork stowed from the data center to the cloud and to the Edge. And so I'm going to bring all of my AI resources and make VMware, And Tansu the preferred infrastructure to deliver AI at scale. I need you guys to make the GPS work like first class citizens in the vSphere environment, because I need them to be truly democratized for the enterprise. so that it's not some specialized AI development team, it's everybody being able to do that. And then we're going to connect the whole network together in a new and profound way with our Monterey Program as well being able to use the SmartNIC, the DPU as Jensen likes to call it. So now it's CPU, GPU and DPU, all being managed through a distributed architecture of VMware." This is exciting. So this is one in particular that I think we are now rearchitecting the data center, the cloud in the Edge. And this partnership is really a central point of that. >> Yeah, the Nvid thing's huge. And I know Dave, Perharbs has some questions on that. But I ask you a question because a lot of people ask me, is it just a hardware deal? I mean, talking about SmartNIC, you talking about data processing units. It sounds like a motherboard in the cloud, if you will, but it's not just hardware. Can you talk about the aspect of the software piece? Because again, Nvidia is known for GP use, we all know that, but we're talking about AI here. So it's not just hardware. Can you just expand and share what the software aspect of all this is? >> Yeah. Well, Nvidia has been investing in their AI stack and it's one of those where I say, this is Edison at work, right? The harder I work, the luckier I get. And Nvidia was lucky that their architecture worked much better for the AI workload, but it was built on two decades of hard work in building a parallel data center architecture. And they have built a complete software stack for all of the major AI workloads running on their platform. All of that is now coming to vSphere and Tansu, that is a rich software layer across many vertical industries. And we'll talk about a variety of use cases. One of those that we highlight at Vmworld is the university of California, San Francisco partnership UCSF one of the world's leading research hospitals, some of the current vaccine use cases as well, the financial use cases for threat detection and trading benefits. It really is about how we bring that rich software stack. this is a decade and a half of work to the VMware platform so that now every developer and every enterprise could take advantage of this at scale, that's a lot of software. So in many respects, yeah, there's a piece of hardware in here, but the software stack is even more important. >> So well on the sort of Nvidia the arm piece, there's really interesting, these alternative processing models. And I wonder if you could comment on the implications for AI inferencing at the Edge. It's not just as well processor implications, it's storage, it's networking. It's really a whole new fundamental paradigm. How are you thinking about that Pat? >> Yeah, we've thought about, there's three aspects, but what we said three problems that we're solving. One is the developer problem, what we said, now you develop once, right? And the developer can now say, "Hey, I want to have this new AI centric app and I can develop, and it can run in the data center on the cloud or at the Edge." You'll secondly, my operations team can be able to operate this just like I do all my infrastructure. And now it's VMs containers and AI applications and third, and this is where your question really comes to bear. Most significantly is data gravity, right? These data sets are big. Some of them need to be very low latency as well. They also have regulatory issues. And if I have to move these large regulated data sets to the cloud, boy, maybe I can't do that generally for my apps or if I have low latency heavy apps at the Edge, ah, I can't pull it back to the cloud or to my data center. And that's where the uniform architecture and aspects of the Monterey program, where I'm able to take advantage of the network and the SmartNIC that are being built, but also being able to fully represent the data gravity issues of AI applications at scale 'cause in many cases I'll need to do the processing, both the learning and the inference at the Edge as well. So that's a key part of our strategy here with Nvidia. And I do think is going to be a lock, a new class of apps because when you think about AI and containers, what am I using it for? Well, it's the next generation of applications. A lot of those are going to be Edge 5G based. So very critical. >> We got to talk about security now, too. I mean, I'm going to pivot a little bit here John if it's okay. Years ago you said security is a do over. You said that on theCUBE, It stuck with us. There's there's been a lot of complacency it's kind of, if it didn't broke, don't fix it, but COVID kind of broke it. That's why you see three mega trends. You've got cloud security, you see in Z scaler rocket, you got identity access management and I'll check, I think a customer of yours. And then you've got endpoint you're seeing CrowdStrike explode. You guys pay 2.7 billion I think for carbon black yet CrowdStrike has this huge valuation. That's a mega opportunity for you guys. What are you seeing there? How are you bringing that all together? You've got NSX components, EUC components. You've got sort of security throughout your entire stack. How should we be thinking about that? >> Well, one of the announcements that I am most excited about at Vmworld is the release of carbon black workload, this research we're going to take those carbon black assets and we're going to combine it with workspace one. We're going to build it in NSX. We're going to make it part of Tansu and we're going to make it part of vSphere. And carbon black workload is literally the vSphere embodiment of carbon black in an agentless way. Ans so now you don't need to insert new agents or anything. It becomes part of the hypervisor itself, meaning that there's no attack surface available for the bad guys to pursue, but not only is this an exciting new product capability, but we're going to make it free, right? And what I'm announcing at VMworld and everybody who uses vSphere gets carbon black workload for free for an unlimited number of VMs for the next six months. And as I said in the keynote today is a bad day for cybercriminals. This is what intrinsic security is about, making it part of the platform. Don't add anything on, just click the button and start using what's built into vSphere. And we're doing that same thing with what we're doing at the networking layer. This is the act, the last line acquisition. We're going to bring that same workload kind of characteristic into the container. That's why we did the Octarine acquisition. And we're releasing the integration of workspace one with a carbon black client, and that's going to be the differentiator. And by the way, CrowdStrike is doing well, but guess what? So are we, and like both of us are eliminating the rotting dead carcasses of the traditional AV approach. So there is a huge market for both of us to go pursue here. So a lot of great things in security. And as you said, we're just starting to see that shift of the industry occur that I promised last year in theCUBE. >> So it'd be safe to say that you're a cloud native in a security company these days? >> You all, absolutely. And the bigger picture of us, is that we're critical infrastructure layer for the Edge for the cloud, for the telco environment and for the data center from every end point, every application, every cloud. >> So Padagonia asked you a virtual question, we got from the community, I'm going to throw it out to you because a lot of people look at Amazon, The cloud and they say, "Okay, we didn't see it coming. We saw it coming. We saw it scale all the benefits that are coming out of cloud, Well-documented." The question for you is what's next after cloud, as people start to rethink, especially with COVID highlighting all the scabs out there. As people look at their exposed infrastructure and their software, they want to be modern. They want the modern apps. What's next after cloud. What's your vision? >> Well, with respect to cloud, we are taking customers on the multicloud vision, right? Where you truly get to say, "Oh, this workload, I want to be able to run it with Azure, with Amazon. I need to bring this one on premise. I want to run that one hosted. I'm not sure where I'm going to run that application." So develop it and then run it at the best place. And that's what we mean by our hybrid multicloud strategy is being able for customers to really have cloud flexibility and choice. And even as our preferred relationship with Amazon is going super well. We're seeing a real uptick. We're also happy that the Microsoft Azure VMware services now GA so they're in marketplace, our Google, Oracle, IBM and Alibaba partnerships in the much broader set of VMware cloud Partner Program. So the future is multicloud. Furthermore, it's then how do we do that in the Telco Network for the 5G build out, The Telco cloud? And how do we do that for the Edge? And I think that might be sort of the granddaddy of all of these because increasingly in a 5G world will be a nibbling Edge use cases. We'll be pushing AI to the Edge like we talked about earlier in this conversation, will be enabling these high bandwidth, with low latency use cases at the Edge, and we'll see more and more of the smart embodiment, smart cities, smart street, smart factory, or the autonomous driving. All of those need these type of capabilities. >> So there's hybrid and there's multi, you just talked about multi. So hybrid are data partner ETR, they do quarterly surveys. We're seeing big uptick in VMware cloud and AWS, you guys mentioned that in your call. we're also seeing the VMware cloud, VMware cloud Coundation and the other elements, clearly a big uptake. So how should we think about hybrid? It looks like that's an extension of on-prem maybe not incremental, maybe a share shift whereas multi looks like it's incremental, but today multi has really running on multiple clouds, but vision toward incremental value. How are you thinking about that? >> Yeah, so clearly the idea of multi is to link multiple. Am I taking advantage of multiple clouds being my private clouds, my hosted clouds. And of course my public cloud partners, we believe everybody will be running a great private cloud, picking a primary, a public cloud, and then a secondary public cloud. Hybrid then is saying, which of those infrastructures are identical so that I can run them without modifying any aspect of my infrastructure operations or applications. And in today's world where people are wanting to accelerate their move to the cloud, a hybrid cloud is spot on with their needs because if I have to refactor my applications it's a couple million dollars per app, And I'll see you in a couple of years. If I can simply migrate my existing application to the hybrid cloud, what we're consistently seeing is the time is one quarter and the cost is one eight, four less. Those are powerful numbers. And if I need to exit a data center, I want to be able to move to a cloud environment, to be able to access more of those native cloud services. Wow. That's powerful. And that's why for seven years now we've been preaching that hybrid is the future. It is not a waystation to the future. And I believe that more fervently today than when I declared it seven years ago. So we are firmly on that path that we're enabling a multi and a hybrid cloud future for all of our customers. >> Yeah. You addressed that like CUBE 2013. I remember that interview vividly was not a waystation. I got (murmurs) the answer. Thank you Pat, for clarifying than going back seven years. I love the vision. You're always got the right wave. It's always great to talk to you, but I got to ask you about these initiatives you seeing clearly last year or a year and a half ago, project Pacific name out almost like a guiding directional vision, and then put some meat on the bone Tansu and now you guys have that whole Cloud Native Initiative is starting to flower up thousand flowers are blooming. This year Project Monterrey has announced same kind of situation. You're showing out the vision. What are the plans to take that to the next level and take a minute to explain how project Monterey, what it means and how you see that filling out. I'm assuming it's going to take the same trajectory as Pacific. >> Yeah. Monetary is a big deal. This is rearchitecting The core of vSphere. It really is ripping apart the IO stack from the intrinsic operation of a vSphere and ESX itself, because in many ways, the IO we've been always leveraging the NIC and essentially virtual NICs, but we never leverage the resources of the network adapters themselves in any fundamental way. And as you think about SmartNICs, these are powerful resources now where they may have four, eight, 16, even 32 cores running in the smartNIC itself. So how do I utilize that resource? But it also sits in the right place in the sense that it is the network traffic cop. It is the place to do security acceleration. It is the place that enables IO bandwidth optimization across increasingly rich applications where the workloads, the data, the latency get more important both in the data center and across data centers to the cloud and to the Edge. So this rearchitecting is a big deal. We announced the three partners, Intel, Nvidia, Mellanox, and Penn Sandow that we're working with. And we'll begin the deliveries of this as part of the core vSphere offerings of beginning next year. So it's a big rearchitecting. These are our key partners. We're excited about the work that we're doing with them. And then of course our system partners like Dell and Lenovo, who've already come forward and says, "Yeah, we're going to be bringing these to market together with VMware." >> Pat, personal question for you. I want to get your personal take, your career, going back to Intel. You've seen it all, but the shift is consumer to enterprise. And you look at just recently snowflake IPO, the biggest ever in the history of wall street, an enterprise data's company. And the enterprise is now relevant. Enterprise feels consumer. We talked about consumerization of IT years and years ago, but now more than ever the hottest financial IPO enterprise, you guys are enterprise. You did enterprise at Intel. (laughs) You know the enterprise, you doing it here at VMware. The enterprise is the consumer now with cloud and all this new landscape. What is your view on this? Because you've seen the waves, and you've seen the historical perspective. It was consumer, was the big thing. Now it's enterprise, what's your take on all this? How do you make sense of it? Because it's now mainstream. what's your view on this? >> Well, first I do want to say congratulations to my friend Frank, and the extraordinary snowflake IPO, and by the way, they use VMware. So not only do I feel a sense of ownership 'cause Frank used to work for me for a period of time, but they're also a customer of ours. So go Frank, go snowflake. We're we're excited about that. But there is this episodic, this to the industry where for a period of time it is consumer-driven and CES used to be the hottest ticket in the industry for technology trends. But as you say, it is now shifted to be more business centric. And I've said this very firmly, for instance, in the case of 5G where I do not see consumer a faster video or a better Facebook, isn't going to be why I buy 5G. It's going to be driven by more business use cases where the latency, the security and the bandwidth will have radically differentiated views of the new applications that will be the case. So we do think that we're in a period of time and I expect that it's probably at least the next five years where business will be the technology drivers in the industry. And then probably, hey, there'll be a wave of consumer innovation and I'll have to get my black turtlenecks out again and start trying to be cool, but I've always been more of an enterprise guy. So I like the next five to 10 years better. I'm not cool enough to be a consumer guy. And maybe my age is now starting to conspire against me as well. >> Hey, Pat, I know you've got to go, but quick question. So you guys, you gave guidance, pretty good guidance, actually. I wondered have you and Zane come up with a new algorithm to deal with all this uncertainty or is it kind of back to old school gut feel? (laughs) >> Well, I think as we thought about the year as we came into the year and obviously, COVID smacked everybody, we laid out a model, we looked at various industry analysts, what we call the swoosh model, right? Q2, Q3 and Q4 recovery, Q1 more so, Q2 more so, and basically, we build our own theories behind that. We test it against many analysts, the perspectives, and we had vs and we had Ws and we had Ls and so on. We picked what we thought was really sort of grounded of the best data that we could put our own analysis, which we have substantial data of our own customer's usage, et cetera, and pick the model. And like any model, you put a touch of conservatism against it, and we've been pretty accurate. And I think there's a lot of things, we've been able to sort of, with good data good thoughtfulness, take a view and then just consistently manage against it and everything that we said when we did that back in March, sort of proven out incrementally to be more accurate. And some are saying, "Hey, things are coming back more quickly." And then, oh we're starting to see the fall numbers climb up a little bit. Hey, we don't think this goes away quickly. There's still a lot of secondary things to get flushed through the various economies, as stimulus starts tailoring off small businesses are more impacted and we still don't have a widely deployed vaccine. And I don't expect we will have one until second half of next year. Now there's the silver lining to that, as we said, which means that these changes, these faster to the future shifts in how we learn, how we work, how we educate, how we care for, how we worship, how we live, they will get more and more sedimented into the new normal relying more and more on the digital foundation. And we think ultimately that has extremely good upsides for us longterm, even as it's very difficult to navigate in the near term. And that's why we are just raving optimists for the longterm benefits of a more and more digital foundation for the future of every industry, every human, every workforce, every hospital, every educator, they are going to become more digital. And that's why I think going back to the last question, this is a business driven cycle, we're well positioned, and we're thrilled for all of those who are participating with VMworld 2020. This is a seminal moment for us and our industry. >> Pat, thank you so much for taking the time. It's an enabling model. It's what platforms are all about. You get that. My final parting question for you is whether you're a VC investing in startups or a large enterprise who's trying to get through COVID with a growth plan for that future. What is a modern app look like? And what does a modern company look like in your view? >> Well, a modern company would be that instead of having a lot of people looking down at infrastructure, the bulk of my IT resources are looking up at building apps. Those apps are using modern CICD data pipeline approaches built for a multicloud embodiment, right? And of course, VMware is the best partner that you possibly could have. So if you want to be modern, cool on the front end, come and talk to us. >> All right. Pat Galsinger the CEO of VMware here on theCUBE for VML 2020 virtual here with theCUBE virtual. Great to see you virtually Pat. Thanks for coming on. Thanks for your time. >> Hey, thank you so much. Love to see you in person soon enough, but this is pretty good. Thank you, Dave. Thank you so much. >> Okay. You're watching theCUBE virtual here for VMworld 2020. I'm John Furrier with Dave Vallente with Pat Gelsinger. Thanks for watching. (upbeat music)

>> the M wear an Amazon seriously deep in a partnership. Well, you know, in some ways will say number one in public, coming together with number one in private. That's a big deal customers >> want. Oh, absolutely, customer, not a Hassan. Don't do anything. I mean nothing unless they believe there is meaningful customer demand people. Conventional wisdom on that deal was it was a one way trip to the hotel cloud. If Oranje and it's become a boon for the data center. Okay, they're just big sucking sound with Public Cloud were everything congregate 0.1 and three years ago, that was the prevailing wisdom. And he's committed. He's committed to this. Your commitment is the one you're in it to win it Way went into a sort of a trumpet in sleep. How's this gonna work that we committed ourselves? We do your poorly. This interview's Andy, and I know a lot of little action items. They get finished the week before the cat. >> You're watching the M World 2019 on the Cube

>> Announcer: Live, from San Francisco, celebrating 10 years of high-tech coverage, it's theCUBE. Covering VMworld 2019. Bought to you by VMware and its ecosystem partners. >> Welcome back to theCUBE's live coverage here at Vmworld 2019, San Francisco, California. We're in Moscone North Lobby. I'm John Furrier, with my co-host Dave Vellante. Dave, 10 years of covering VMworld. This is our 10th year. Pat, you've been on every year since 2010. We have photos. >> That's sort of scary. >> You had a goatee back then. (Pat laughs) We've heard your rap going way back. Welcome back, good to see you. >> Oh man, scary. You guys probably got some dirt on me. Boy, I better be careful. >> John: Pat Gelsinger, the CEO of VMware on theCUBE. Thanks for coming on this evening. >> Oh, always a pleasure to be on with you guys, love it. >> Don't end up as driftwood. Security is a do over. We're going to talk about all that. >> We're going to spend the entire segment just talking about Pat Gelsinger's predictions. We'll recycle some of them, but let's get into the core news here, VMworld. You've done such an amazing job. We've given you a lot of props on theCUBE over the years, but still continuing, even in the market climate that's swinging up and down right now, VMware still producing great results. The team is executing. Their transition since October 2016 when you kind of made that move, cloud is it, clear vision, a lot's been falling into place. Pivotal has dropped on your lap, and you got the engineering stuff coming out on top of vSphere and a bunch of other things. Great stuff, I mean, you must be geeking out. >> Well, thank you. At the US gymnastics finals, Simone Biles did a triple double. First time ever in competition. And I think of our last week as a triple double, right, two major acquisitions, an earnings call, and now VMworld and all the announcements as part of it. It's like wow. >> John: You stick the landing, you stick the landing. >> That's right, we did yesterday morning. We stuck the landing and Ray did that today as well. So super proud of the team in bringing these across the line. And I think certainly meeting with many of the customers and the partners here everybody's sort of going wow. And I was excited about VMware before I got here. Now I'm just euphoric, and it's really-- >> I'm told Ray did an exceptional job. I'm going to talk to him later today on theCUBE. Today in his keynote he was great. He repeated the messages over and over again, but he nailed the tech piece. I got to ask you, as the engine of VMware is continuing to be put together and expand it's like a new turbo engine gets pulled in here. There's a lot of really good engineering going on. What are you most excited about? How would you describe all the action going on? If someone says, "Pat, what's the underlying engine here?" What's being built? What's going to be the outcome of all this? >> Well, I think it sort of boils down to, right, these two phrases that you heard from me yesterday. We're going to engineer for good, the tech for good stuff, we're going to do good engineering. And doing both of those is just okay. And you sort of say, "Hmm, we got vSAN," right? We're not being able to optimize the performance because big blocks, little blocks, latency, buffer size, all this other kind of stuff, so now we're doing Magna, right? And when you see that demonstration there, it's like we're going to do it automatically for you to be a fine-grain optimizing your storage. Wow, that's pretty cool, and it's intelligence, right? It's sort of saying, "Wow, this is really cool." So let's go automatically produce an understanding of the underlying network, understand what's going on, give you the rules that we recommend, and allow you to simulate them, which is super cool, right? Within minutes, we will give the network engineer more understanding of what's really going on in our applications, and then allow them to see it in real time and then apply it. Every one of these, and it's just 10 or 15 tremendous engineers who are doing these little innovations that are fundamentally changing the industries that they're in, in addition to the big stuff. It's just thrilling. >> Dave did a survey before coming into VMworld with customers with a panel. 41% said they're not going to change their spending habits with VMware so creating the-- >> Dave: They said they're going to increase-- >> Increase. >> In the second half, only 7% said they're going to decrease. >> So great customer loyalty, and remember, VMware's moving so fast and transit. Customers aren't moving as fast as you guys are, and you've talked about that before. What are you hearing from customers as they look at it and say, "Wow, is it too much new stuff?" 'Cause they want to continue to operate, but they also want to enable the developer piece. Because remember, DevOps means dev and ops. You guys got the ops piece down. You're adding stuff to it. There's always concerns there making sure it's smooth and you guys work on that. The dev piece becomes super critical. That's where Amazon really shined with public cloud. So hybrid cloud's here. What is the DevOps equation for hybrid? I mean Kubernetes is a good start. Where do you see it going? >> Yeah, and that's really the center. To me, that is the most important news of VMworld this year is the entire Tanzu message, the coming together of Pivotal, the coming together of Pacific, coming together with Mission Control, so really leveraging VMware in the run layer, leveraging Pivotal in the build, and Heptio in the manage, right, and those coming together into Tanzu. I think that's the most important thing that we're doing. And I think for operators, which is really the center of our audience here at VMworld, they've always struggled with those crazy developers. They do this cool new stuff. It's not operational, it's not secure. But in bringing those together, the magic formula for that is Kubernetes. And that's why we're making these big bets. The move with Pivotal, obviously the Heptio guys, I mean Joe Beda and Craig, they're just the rock stars of that community because they really are solving in an industry-consensual standard way. That's really the magic of Kubernetes. This ain't a VMware thing, this is an industry thing. >> Is Kubernetes the technology enabler? I mean, TCP/IP was that in the old networking days. It enabled a lot of shifts in the industry. You were part of that wave. Is Kubernetes that disruptive enabler? >> Yeah, I really see it as one of those key transition points in the industry. And as I sort of joked, if my name was Scott, and we were 20 years ago, I'd be banging the table calling it Java. And Java defined enterprise software development for two decades. By the way, Scott's my neighbor. He's down the hill, so I look down on Mr. McNealy. I always sort of like that. (everybody laughs) >> He looks up to you. >> But it changed how people did enterprise software development for the last two decades. And Kubernetes has that same kind of transformative effect, but maybe even more important, it's not just development but also operations. And I think that's what we're uniquely bringing together with Project Pacific, really being able to bridge those two worlds together. And if we deliver on this, I think the next decade or two will be the center of innovation for us, how we bridge those two roles together and really give developers what they need and make it operator friendly out of the box, cross the history to the future. This is pretty powerful. >> So that does lead to the big question. You just mentioned developers. And when you look out the VMworld audience, it's not comprised of huge developers. I know you're thinking about this, so what's your plan to attract those developers? You're giving them platform now, and the technologies. but those builders, what are you going to do for them? Is it build community, more events, more training? What's the plan there? >> Yeah, and I'd say I think about it in a couple of different context. One is if we were here six years ago, and you would have asked me about open source, right? I mean, VMware's reputation in the open source community wasn't good, right? We hired Dirk, we started to build momentum, make contributions. One of the litmus tests for Joe and Craig on Heptio, 'cause remember, a lot of people could have bought Heptio. Because some was who's going to be the buyer, but also will they be a willing seller. And their litmus test was are you really serious about open source, right? Are you really committed to the open source, Kubernetes tree and development and cloud-native computing foundation? Are you really there? 'Cause they were also looking do I want to be bought by you? Do I want to be part of the VMware family? And we passed the test. That's why Heptio's part of the team. Clearly, this has been central to Pivotal and their views. So we have to be open-source credible. We also have to be developer credible, and those two are tightly linked. And that's why we noted on stage Pivotal, particularly the Java community, is three-plus million developers. Bitnami is two million-ish developers. We now have high volume connections to the developer community, and you're going to see us show up in dramatically more profound ways at places like Kubicon and SpringOne is coming up, just start to be in the developer spaces. And ultimately, you got to do stuff that they care about. At the end of the day, winning developers has nothing to do with great marketing, even though that's important. You have to do great code, right, and bring them value to their development assignments. And we think with the assets that we're lining up, that's why we did Pivotal, Bitnami, Heptio, some of our organic things, Dirk's leadership here. I believe that a year or two from now VMware could be seen as the most developer and open source enterprise company in the industry. And that's the goal that I'm on. >> Well, I have an idea for you. Allocate 1,000 engineers to open source and start having them build new applications, new workloads, give it away to the open source community, and then sell your products and services to them. That would get you in fast. >> Well, by the way, we now have hundreds of engineers who are committed to open source, who their full-time job is open source contributions. So I'm not to 1,000 yet, but I'm now several hundred that their day job, night job, weekend job is open source contribution. So we're becoming very credible, and as you heard me say in the keynote, we are now top three contributor to Kubernetes. This is big, and some areas like the networking area we're clearly the leader in a number of the key networking open source technologies, and you'll see us do more of those kind of projects. >> One of the things you mentioned, I mean you mentioned about open source six years ago, you might have rolled your eyes, or you might not have had an opinion on it 'cause the timing of where VMware was. But one thing you've been banging the drum on since 2012 is hybrid cloud. And so you see certain things early. You see those waves. That's what you're known for, in my opinion. You're really good about it. You see blockchain as a great wave, but as a headline I'm reading on Fortune it says, "VMware CEO Pat Gelsinger, "Bitcoin is bad for humanity." >> Sold all my bitcoin (laughs). >> Okay, so now are you implying then, and blockchain is a lot of open source components there. It's evolving, you've a lot of blockchain projects. So is that an indictment on the unregulated currency market or is it the underlying infrastructure? And are you excited about blockchain as an underlying? Is it one of those hybrid cloud moments for you, or is it more of we'll see how it develops? What's your thoughts? And explain the bitcoin comment too. >> Yeah, the idea of distributed ledger technology, immutable distributed trust, I've said I think of that and blockchain as the underlying technology as almost like public private key encryption, right? If we go back 40 years before RSA or Vashumi and Ari, it's that important. This is breakthrough, innovative technology in how you do distributed secure trust. That's powerful, so we are huge believers, strongly committed to blockchain and distributed leverager technology. Now, why do I make my comments like I do on bitcoin? So bitcoin, as it's implemented, and implementation of blockchain and distributed ledger, I assert is bad. It's bad for two reasons. One is it's an environmental crisis, right? A single ledger, if you and I transacted a penny, right, I would consume enough energy to power your house for half a day. I mean, it's incredible, and I mean, that's why you have these crazy bitfarms being built and people finding GPUs. >> So you think from a sustainability standpoint. >> Absolutely. >> That's where you came from. >> Climate sustainability, right, this is a terrible implementation of blockchain. Secondly, the way it's also done as well in this totally unregulated environment, almost all of its uses are for illicit and criminal purposes. That's who's trading in bitcoin as well. So its purpose is almost all illicit, right, and it's environmental crisis. I say bad. Now, I'm not saying that blockchain is bad. I think this is revolutionizing. >> I want to make sure we clarify that because obviously unregulated outside the United States has been a big problem. We see it in the SEC crackdown, and results are-- >> Studies have shown over 95% of the use of bitcoin is criminal, so say bad. Let's go make it good, and that's what I mean these two phrases, do good engineering, and engineer for good. How do we make blockchain, and this is part of the reason, we had just announced on Sunday a partnership with Australian Stock Exchange and Data Asset, that they're leveraging the VMware distributed ledger technology, right, as part of their go-forward strategy for the stock exchange of Australia. Well, that's good, right? We're making it suitable for enterprises, meeting the regulatory requirements and-- >> John: Are you happy with the progress of where the blockchain is for you guys? >> Absolutely, and we're order-plus magnitude better in terms of performance and energy consumption. So yeah, and we're just getting started. >> And it's consensus-based, which is great. A quick question for you on multicloud. So hybrid cloud you said in 2012, I challenged you on it, and you've been banging the drum since 2012. It's a couple years into it, and hybrid cloud is pretty much standard. People see it, recognize it as the cloud 2.0. Multicloud is all the buzz and all the rage. I hear it everywhere. What does it actually mean is a different debate, so I want to get your thoughts on defining what multicloud is and is it going to have that same gestation period of the same kind of years? 'Cause if it's seven years to get or six years to get hybrid cloud mainstream, is multicloud going to have a similar trajectory? >> Yeah, so let's try to be very crisp with the definition. Multicloud is simply that. Customers using multiple clouds for different business purposes. And what we said is is that we're going to help them manage. That's the center point of cloud health, right? Help customers manage, cost optimize, secure in a multicloud environment where the underlying infrastructure is dissimilar, not compatible, right? And in that sense, you sort of say you can have consistent operations if we do our job well with cloud health, but you're not going to have consistent infrastructure, meaning I can't VMotion between these things, I can't have higher these things. So that's the multicloud. Now a proper subset of multicloud is hybrid cloud. And hybrid cloud is where you have both consistent operations and consistent infrastructure. And that's when we can do things like you saw on the demo today, right? We're running a VMware stack on Azure. We're moving Azure running workloads in real time, right, without stunning them, pausing them, to an Amazon VMC instead of moving workloads from Amazon VMC onto an Azure instance. That's the hybrid cloud, and that's the power at work, from private data centers to multiple different targets in the public cloud where you can be optimizing the location of work nodes based on the proper business requirements. And that might be governance. That might be performance. It might be latency. It might be the time of the day of the week when you have capacity available, right? And that's really what we're saying. Consistent operations and consistent infrastructure, proper subset of multicloud. >> I have a question on something you said yesterday. You said, "Strength lies in differences not similarities." True, I buy that. There's a number of difference between you and your preferred public cloud partner. AWS doesn't use the term multicloud. They say you shouldn't say security's not broken. And there are a number. You want to be the best infrastructure and developer software company. They want to be that platform. They want to be the security cloud, on and on and on. So I see this impending collision course, maybe not tomorrow, but what are your thoughts on the differences and the good or bad that does for the industry? >> Yeah, well, we appreciate Amazon, the investments that we're making. We've both bet big with each other, and they've been a great partner. And in fact, I'm going to talk to Andy before the end of the week, update some of the announcements and some of the things. Great partner, we have regular cadence of our activities with each other. And as we said, they're our preferred public cloud partner. And with it, it's preferred in two senses. It's a go to market and how we position that, but it's also an R&D statement, right? This is where we're doing a lot of core engineering, and that will flow into private cloud embodiments, flow into our other public cloud and our cloud-verified partners. But that's the point of the arrow in terms of the innovations, the go to market, and the R&D aspects of the partnership. And I expect we're going to be here five years from now and we're going to have this conversation, and I'm going to answer it exactly the same way. >> That'll be our CUBE's 15th anniversary, and so we'll be excited for that. It's our 10 year, so I want to last question put you on the spot, looking back over 10 years, pick the moments that you think were key inflection points. What were key notable good things that happened, bad things that happened, or things that didn't happen, right? And then going forward 10 years, you laid out a few of them with Kubernetes. Just past 10 years, could be CUBE memories, but in VMware's world, you were at EMC first, then became CEO, a lot's changed. Paul Maritz laid out the original vision. And where we are today, what's your key moments? >> Yeah, well, I think if you go all the way back, obviously, hey when the first WSX, right, people could run Linux and Windows on their client. Wow, right? The first VMotion, right, oh my gosh, and that sort of ushered in ESX. Obviously the transition from Diane to Paul, the public offering, boy, that was a pretty tumultuous time. And from Paul to Pat was very much we lay it out pretty much this any cloud vision, and that model, it was formative and we're sort of bringing it together. It was get rid of some assets, bring together, so sort of that transition was challenging for the company. But then we've started to sort of systematically say build from the core. What do we have? What do we need as we started to build these layers in the concentric circles? The Nicira acquisition, boom, that was the shot that changed the world of networking. And obviously, that doesn't change quickly, but we have a multibillion dollar networking business, Avi Networks, VeloCloud, we're building that set of assets. >> Software-defined data centers. The Core engine, that was a key point. >> Dave: That was a total game changer. >> You cannot build a software-defined data center if you don't address the networking. It's just that simple, and that's why I was so passionate about that. Obviously, the HCI move with vSAN. Joe Tucci was so pissed off at me, right? (everybody laugh) What are you doing? It's operative. It's part of the ingredients of the data center, Joe. I got to do it, wait. >> John: Just being a software company. >> Yeah, yeah, right, so that was a pretty tense moment. The period of the Dell EMC merger, a tough period, right, as well, and just where the company's going to go. And within a week, right, I'm going to be fired. I'm going to be spun out, right? I'm going to be the new CEO of Dell, right? I mean, it was going to be HP. >> John: All the rumor. >> Stock is 40, obviously the Amazon moment, when we did that partnership. vCloud Air, hey, we had the right idea. We didn't implement it properly, and then we did it right with the Amazon partnership, and that just changed the cloud industry. And I think we're going to look at today, this week, and the moves with Heptio, Kubernetes, Pivotal, those pieces coming together, and to this audience Project Pacific, right, it's just like okay, wow, everyone of them will become Kubernetes enabled. 20,000 selfies with Joe Beda, right, have now been ushered because it is that game changing, we believe. This is the biggest free architecture of the Core platform in a decade, so. >> My favorite quote from you was if you're not out on that next wave, you're driftwood. You said that on the QA, I forget which year it was. >> And mine's security's the do over. (Pat laughs) >> You're doing it over, you're doing it, Mr. Gelsinger. >> Next 10 years, what's the big wave everyone should be on? What's the wave that you identify? You've seen many waves, you've created waves, you've been part of waves. What's the wave for the next 10 years that people should pay attention to, that they need to be on? >> Well, if they're not on the networking wave, get on it, right? They got to be on this multicloud hybrid wave. Could it be louder? The Kubernetes one is the one, right? That's the one I'm going to put at the front of the list. And this move in security, I am just passionate about this, and as I've said to my team, if this is the last thing I do in my career is I want to change security. We just not are satisfying our customers. They shouldn't put more stuff on our platforms if they can't-- >> John: National defense issues, huge problems. >> It was just terrible. And I said if it kills me, right, I'm going to get this done. And they says, "It might kill you, Pat." >> Mount Kilimanjaro right there. Pat, thank you for all your commentary, and great look back 10 years. You've been one of our favorite guests coming on theCUBE, bringing A game, you're bringing the tech chops, the historian aspect, also you're running one of the most valuable open source companies in the cloud. (Pat and John laugh) >> Love you guys, thanks so much. >> Thanks, Pat. Pat Gelsinger here inside theCUBE. Our 10th year, VM's looking good off the tee right now, middle of the fairway, as they say, for the next 10 years. I'm John Furrier, Dave Vallante, thanks for watching. (upbeat music)

>> live from San Francisco, celebrating 10 years of high tech coverage. It's the Cube covering Veum World 2019. Brought to you by IBM Wear and its ecosystem partners. >> Welcome to our live coverage here in Mosconi North Lobby, Of'em World 2019. I'm John for a Student and a Volante celebrating our 10th VM World or 10 years of covering the M world. Dave's stew. What a run been Go back across Mosconi South 10 years ago with the green set. This is 10 years later. 10:10 p.m. World BMC Rule No longer the show, so that kind of folds in the Dell Technologies Man, The world's changed. Pat Nelson had just delivered his keynote as CEO Sanjay Poon and a CEO came on talk to customers stew. A lot of acquisitions, a lot of cloud native, a lot of cloud. 2.0, this is turning into VM. Wear 2.0, where vm zehr kind of only one part of the equation. So let's jump into the analysis, Dave. I mean, you put out some killer research on silken angle dot com, and we keep on dot com around customer spend still, we put out a lot of analysis on all the key trends that Vienna was playing into. Cloud two point. Oh, is what we're calling it. It's enterprise Cloud of fresh scale Day. What? What? What? What do you want? Your analysis, Latino >> John, when you go back. 10 VM Worlds ago, it was all about virtualization, completely changing the deployment dynamics. When when I first saw a VM deployed, I went, Oh, my God, This is gonna change everything. And it did. But while compared to now what's happening with cloud and a I we heard so much about five g. It was also the big, big difference in the ecosystem. Back when e. M. C owned VM wearing 2010 there was that sort of Chinese wall stew. You were working there, you know, just before that. And there wasn't a lot of, you know, swapping of I P, if you will. They were sort of treating them as unequal player to net app and everybody else out there. Tod Nielsen used to say, for every dollar spent on of'em were licensed, 15 spent an ecosystem. You don't hear that kind of narrative anymore, you hear we're crushing the HC. I vendor where number one basically a sort of backhand to Nutanix We heard on the on the keynote Very tight integration VX rail project Dimension So much, much tighter integration since Pat Tell Singer joined VM. Where from the emcee lots has changed >> will be a lot of research on reporting leading up to the show around Cloud two point. Oh, I'll see Dev. Ops is willing to home of the dimension on enterprise scale, the number of acquisitions of'em wears made and then, boom. They dropped two monsters on the table or the 11th hour pivotal for 2.7 billion carbon black for 2.1 billion. Lot of stories in those AK was other acquisitions, your analysis and how that played out today on the >> Kino. As Dave said when we started coming to this event back in 2010 you know, the virtual machine was the center of the universe. What were these servers that it lived on, how to storage and network and get fixed to be ableto live in that environment And the keynote. It was a lot of cloud, you know, John, we brought in a lot of the Cloud camp people that first year and some people were like, Why are we talking about Cloud? This is VM World, and we're like, Well, this is the future. And today we're not talking about V EMS at the center we're talking about containers were talking about cloud native applications, that multi cloud world absolutely something that pack l singer did. Front center actually felt it almost glossed over a little bit of the H C, I and NSX and all these wonderful things. Sure, there was some big del pieces in there. The M word cloud on Delhi emcee the Del Di are, you know, data protection, power protect, you know, into the VM where peace something that you definitely would not have seen under the old emcee Federation model. So Michael Dell, absolutely having his strong footprint here. Dave's done a lot of analysis talking about things like Pivotal getting pulled in and like so many different acquisitions, Pivotal came out of'em wear and, you know, carbon black Boston based companies so many different pieces here to get them talking about applications and where Veum, where the company sits in this multi cloud world where they're trying to be, you know, maintain their relationship with us. >> Let's get into the analysis on the whole ecosystems. I really want to dig into the work. Dave, you didn't and the team did. But let's go through the keynote first. So my personal opinion was it felt like, um, I'll give him a C plus Pat because it just didn't have a lot of meat. In my opinion, it felt like it was too much tech for good, although super important to have that mission driven stuff I think is really valuable as the market tends to look >> at tech >> as bad actors. I thought that was addressing. That was a positive thing, but it felt too much. I didn't see a lot of specifics. It felt do is and David, if they were hiding something, they were putting a lot of it didn't seem like there's a lot of substance coming out specifically around how Kubernetes was going to be impacted. Specifically, how Cooper is going to sit within the VM where ecosystem products specifically I just didn't feel like the product side was there. >> Well, you know what? I'll say it, John and General, I agree with you because Day one usually is here is the company vision. And if the vision is kubernetes, well, we've been hearing kubernetes for a bunch of years. Kubernetes is not the answer. Kubernetes is an enable ionizing technology job. Ada, who we up on stage? You know, we had him on the Cuban. He's like, look committed. This is not a magic layer. It's this thin layer that's gonna help us go between clouds. Getting into some of their future projects is something I usually would expect on Day two, the vision of V. M. Whereas a company, it feels like we're in that transition from who do you want a big tech for? Good? That that's great stuff. You know, Pat has a long history of talking about, you know, that moral compass that he has and wants the company to live. That which is a good change from many of the Silicon Valley companies. But, you know, I didn't get a strong feel for their vision and it was not >> a conservative. They didn't want to actually put a position down there because I think everyone in the hallway that I talked to wants to know how Cooper is gonna impact the sphere for instance, is gonna change the makeup of the sphere. And what's the impact on the product side the head that stat about bare metal being 8%. I was like, a little bit biased. Maybe there, So are they. They tiptoeing. Dave, you think? I mean, the spend numbers show that if you could just hold the line for 24 months and the new trends won't take away from that license, I mean, is it a tactical thing? Or do you think that here's the >> thing? I want to go back? I do want to give'em where? Props on one thing and you've used this term to If you go back to 8 4009 Paul Maritz talked about. We're building the software mainframe and passed them pretty consistent about that they used, they said, Any workload, any app? What's different today than back then is, he said, any workload, any up any cloud. Really. Cloud wasn't as much of a factor back then, but that vision has been fairly consistent it to you. Answer your question, Veum. We're spending remains strong, you know they're spending data that we shared with the GT R on silicon angle yesterday and today is that 41% of the VM were installed. Base is going to spend Maurine the second half of 2019 and only 7% are going to spend less. Okay, that's a real positive. But at the same time, the data clearly shows that cloud is negatively impacting VM wear spend and so that's a real threat. So multi club Pat said today technologists who Master Master Multi Cloud will own the next decade. He's talking to his audience. I'm not sure I agree with that. How much you're mastering Multi Cloud is what's gonna be the determining factor to own the next decade. >> Well, I'm stumped. Stick with my position. That multi cloud is not a reality. I think it's really more overhyped, and our actually just started to be hyped and probably will be then over hypes. And then seven years from now we'll start seeing multiple clouds truly interoperable. But I think multi cloud is we find on the Cuba simply enterprises have multiple vendors and multiple environments that happen to be those vendors have cloud, so I don't think it actually is an operating model yet. But again, just like on the Cube 2012 stew. We talked about hybrid Cloud. I called. I asked, yes. When was it a halfway house of the weigh station? He had a connection. >> So gassy. So, John, here's what I say. Number one is customers today absolutely have multiple clouds. But for multi cloud, to be a reality multi cloud must be greater than the sum of just the piece is that it's made up today and absolutely were not there. Today. VM wear has a strong reason why it should be at the center of that discussion. But they're gonna be right at loggerheads with Red Hat and Microsoft and Google and Cisco in that kind of debate at the multi cloud >> and we had, we had a story on our special report on silicon angle dot com. Check it out. It's called Coping With Multi Cloud. Were coping was by design. Coping as a mechanism used to deal with uncertainty. Coping strategies is what CEOs are going to deal with. But read that post. But in it I kind of see. I mean, I kind of agree and disagree. We have two perspectives, Dave developing. You want to get your thoughts butts do on this C I ose that come from a traditional I t background tend to like multi vendor things because they know they don't want lock. And they're afraid if you then swing to the progressive side si SOS, for instance, who are have a gun to their head in terms of security, they're all saying no, we're betting on one cloud and we'll have backup clouds, but our development staff is gonna build stacks. Have AP eyes, and we'll share those AP ice to our suppliers. Cloud vendors are saying Support our specs. So to spectrums the old school I t. Guys saying Multi vendor equals multi cloud. And then then, on the other end, See says to say, I'm gonna build technology and build a stack, exposed FBI's and let the clouds support my my tooling that not the other way around your thoughts. I >> pulled a quote in my piece That's on Silicon angle as well. From David. If lawyer and he was defining a hybrid multi cloud, he said, any application of application service can run on any note of the hybrid cloud without rewriting re compiling a re testing. My argument would be you're never gonna have that North Star without a high degree of homogeneity. And there's three examples of high degrees of homogeneity in hybrid Cloud. Today it's azure stack. It's clouded customer, and it's outposts. You're so this idea that we're gonna have this diverse set of clouds and yet they're all gonna run is one to me. I ask, Is it technically feasible? And is it Is it practical? >> Well, Steve, Steve Harry was on his Hey had announced the signal. FX has come. Portfolio can be sold on a big deal to split when he was on The Cube with me last week and he said one of them looking back on the 10 years that 1 may be M where great was virtual ization allowed for massive efficiencies and improvements without rewriting the apse. The question today's point is, is that a reality? Can what's next? So that that next gain that's not gonna require people to rewrite their APs >> well and that actually not rewriting the axes where VM or has its strength. Because, you know, I I made a joke during the keynote. It was like you have a V M insert magic. Congratulations. You now have a cloud workload because I just did. VM were cloud and it's the same app. But on the other hand, that's actually been my biggest dig on V M. Where is the long pole? In the tent and modernization is modernizing wraps. And that is that Tom Zoo that Veum were announced. They're taking bit Nami and pivotal because we do need to modernize the application. If you have an application, you've been running long enough that your users are complaining about it. We need to modernize that. VM wear has not been much of enabler of that pivotal. Yes, absolutely. That's what the cloud Foundry Labs, the pivotal Labs has been doing for years. It is a tough thing to do. That's what the developers we hear it Amazon. They're building new abs. I don't hear modern building new app at VM where, but they are moving in that >> direct question for you guys and John you in particular, but also used to as well followed AWS probably more closely than any two people I know, Pat said. Strength, lies and differences, not similarities. I've noted many differences in philosophy between A. W S and V M. where they're both winning in the market place. We know a divorce is growing much faster, but a divorce doesn't believe in multi cloud. A Devil's doesn't believe security is broken. That's that's VM wears narrative VM where says it wants to be the best infrastructure and develop our software company. That's kind of like eight of us is the platform for that. They both want to be the security cloud, and and VM were said today they have 10,000 cloud data centers, and I'm guessing that Andy Jassy wouldn't think that many of those data centers are cloud data centers. Your thoughts on the differences between between A. W S s philosophy and VM wears narrative. And can they both? Is there enough market for them both to win? >> Well, it's strikingly different. I mean, AWS is just in a breed of its own. VM wears hedging and playing there their bets. They're kind of putting, you know, bets on each horse, right? Interesting enough in the cloud thing. There was no mention of Google Cloud. I didn't see that mentioned there. Andi was speculation. Wouldn't Oracle be great partnering with Google? That's not a rumor. I'm just kind of put it out there. That would be a good combination partnership, given the Oracle's cloud is failing miserably, I think v M. Where because of the operating leverage in the enterprise, has that operational layer down to me, Amazon is the model, the future, because they are clearly born with a dev ops mindset. They have an environment where developers can build applications and they could operate. It scale with all the efficiencies of operations. So I think cloud to foreigners were calling. It is all about having developers and operational excellence without a lot of disruption or re platforming. So I think that's where the differences are. You have company that have toe have to work with this world of legacy applications, and that requires first lift and shift, which doesn't become attractive. Then you add containers on the game changes. So I think container ization really was, I think, the seminal moment in the shift where where you got kubernetes and containers. So let the enterprise cloud. Native guys get in and have an operational framework that takes advantage of the horsepower of public cloud, which is computing storage, which is why we think networking and security will be the absolute focus areas for Cloud two point. Oh, and Amazon is just dominating the depth and the ops. And I don't think anyone is coming close. >> I'd love to hear your thoughts, too, but I just got caught. I don't think Oracles Cloud is failing miserably. I think it's I wouldn't say it that way. I think their infrastructures of service is irrelevant and the cloud is all about SAS. But just, you know, that's what I think. Waken debate that somebody >> has been great for the Oracle customers. But in terms of all metrics in terms of public and enterprise, cloud with multiple environments nonstarter. >> So there's a bit of a schism out there if you talk to customers. There are many customers when they deploy in Public Cloud, although uses, you know, compute storage and, like the identity management and that's it. And they'll stop and I talkto you con many customers that are using kubernetes so that if they want to hit the eject button, but they're all on Amazon today, so it's not like they're all fleeing Amazon or doing it. But we talked to lots of developers that are deep in aws they're using those service is they're using Lambda and they're building it. So how deep will they go? And that's where I look at this VM we're offering. And it's if I'm gonna take the sphere and extend that with kubernetes. I saw Cuba. Well, um, actually in the Twitter stream said it is, you know, cloud lock in to Dato is what we get if we do that. Because the whole reason VM were originally created called Foundry. So they didn't have to take that entire V's fear colonel and put it everywhere. So it's a nice bridge. That van, where has the partnership they have with AWS is a great strategy. But I still think it is a bridge to an ultimate solution where they'll still use the M where the embers not going anyway. But that shift of where my application live in what service is I do is going to change a lot over the next 3 to 5. >> Let's not lose sight, Dave, of where we are in the industry. I mean, we're at VM World 2019. We go to reinvents coming up. We kind of live in a tech bubble in the sense that all this stuff is all kind of great skating to where the puck is gonna be. But the reality is in most I tea shops, and again, I use ceases as a proxy in my mind, because they're in the cutting edge of all the real critical nature of security, of the impact that harm that could happen to a company. So I look at sea. So she's more of a canary in the coal mine for trends than the nutritional CEO. At this point, most enterprises are just trying to rationalize kubernetes, generally speaking like never mind, like making a centerpiece of their entire architecture. They're looking at their existing environment saying, Hey, I got V EMS that did great for me. Serve a consolidation enabled more efficiency, not rewriting code. Now what? I gotta do kubernetes and do all this other stuff. How do I suspect my VM with kubernetes? Is it on bare metal? So I think we're way ahead right now. In the narrative, I think the reality is that people catch up. That's where the proof is gonna come into. That's why the customer survey numbers are interesting. >> Keep keep. Townsend is set on the Cube VM, where moves at the speed of the CEO, so they're not moving too far ahead of them, but they are key heating up with them. >> Let me share some data to share some data so you could go to Silicon Angle. Look at the V M World 2019 90 spending survey containers, Cloud NSX and pivotal its data from Enterprise Technology Research that we analyzed. There's no evidence right now that Container's air hurting VM wear. But then that was the narrative that containers are gonna kill the M where but long term. There's real threats there. So that's what the pivotal acquisition, at least in part was about. I want to address the pivotal acquisition cause we haven't dug into it a little bit a cz, Much as I'd like to see. There's really three things there. One pivotal was struggling. You look at the stock price, you look at their buying patterns, you know the stock was down that not even close to their original AIPO price, so they wanted to get out of the public eye right now would not be on that 30 day shot clock. The second is it's a hedge on containers. And the third is it's a financial scheme. I mean, I'll call it that VM wears paying $800 million in cash for an asset that's worth $4 billion. How can that be? Well, they already owned 15% of pivotal there. Give. They're exchanging stock. So their trade trading paper to Adele in exchange for Dell's 70% ownership in Pivotal. So they pick up this asset, and it's basically a forced migration by Michael Del, who controls 96% of the voting shares. So there's all kinds of inside nuance going on there that nobody's really talked about it a >> great deal for Of'em. Where and Michael Dell? It's >> a very good deal for VM wear and Michael Dell. >> Let's unpack that are rapidly. >> Just did the one piece on that, right, because kubernetes it was the elephant, the room that was damaging what Pivotal was doing. VM were made a couple of acquisitions VM where needs to react at, so it made sense to pull out back in. Even if it does go against some of the original mission, that Cloud Foundry and Pivotal had to be able to be that cloud native without that full strong time, >> it's all about building apse, right? It's all about enabling developers. >> Let's on that note. Let's go around the horn and talk about what we expect from the emerald this year. And then we'll kick off three days of wall to wall coverage. I'll start, I expect. And I'm not looking for is how VM wear and its ecosystem and who's really deep in the ecosystem, who's kind of independent and neutral, what they're doing with their containers and kubernetes play. Because I think the container revolution that was started with Dr Absolutely is very relevant to the C i o and the Sea. So so and then how they're using data in that in their applications. So you know how VM Way wants to position themselves on the control plane, how that fits in the NSX. I think containers in the container ization is going to change. I think bare metal is gonna be a super important topic in the next couple of years. Dio I'm kind of swinging back to the my feeling that you know, hyper convergence what it did for server storage networking back when you were calling those those moves. I think that kind of hyper convergence mentality is coming up the stack, and I think Containers and the Kubernetes Chess Board will will play out. >> I think if you my feelings, if you don't own a public cloud, you better convince your customers in your ecosystem that the future is in our definition of cloud, which is multi cloud. And that's what this VM world to me is all about. >> Yeah, you know, Veum wears taking their software state and trying to live in all of those cloud world. So you know, V. Amar has 600,000 customers and they want to be the ones to educate them on the kubernetes containers. You know you're at modernization, but there's a lot of other places customers can learn about this. No one understand where VM wear really adds value beyond all of those pieces, because all the cloud platforms have their kubernetes. >> A lot of other places, like the public cloud. That's where all the action >> exactly comes back down the cloud 2.0 Dev and ops developers and operations all come together with software. Thank you. Breaking it down here for three days. Wall to wall coverage here in Moscow north to set celebrating our 10th year covering VM World. Thanks for watching stay with us from or action after this short break.

>> Live from Las Vegas, it's theCUBE! Covering VMworld 2018, brought to you by VMware and its ecosystem partners. >> Hello everyone, welcome back, this is theCUBE's live coverage here at VMworld 2018 in Las Vegas, I'm John Furrier, your host, with Dave Vellante my co-host, our next guest, CUBE alumni, special guest, Pat Gelsinger, CEO of VMWare, always comes on every year to share, and talk about the keynote, talk about the news, all the great stuff. VMWare, great, per it's financial performance, great product portfolio, great R&D, pumping on all cylinders, congratulations, welcome to theCUBE, great to see you. >> Thank you. Always great to see you guys, thanks John, thanks Dave, y'know. >> Y'know, it's fun, this is our ninth year doing VMWorld, you've been as the president of EMC and six years ago CEO of VMWare. We've been there, we've been following your journey. >> Hey, y'know, we've been on this path together, so it's been good. >> And, y'know, we've talked candidly around what was going on with Cloud at the time, your vision, getting sorted in. You made some real quick, decisive, decisions on Cloud, okay, Andy Jassy comes on stage, you're personally involved with Andy on the Amazon announcement, which is, I think people don't know how big that's going to be. But VMware and Amazon are seriously deep in a partnership. >> Yeah, absolutely. >> This is a big deal, this feels like a little wind-tell kind of easy, synergies across the board. (Pat laughs) >> Well, you know, in some ways, we'll say number one in public coming together with number one in private, that's a big deal. Yesterday's announcement of RDS on premise to me, sort of finishes the strategic picture that we were trying to paint, where it really is a hybrid world. Where we're taking workloads, and giving people the access to this phenomenal, rapidly-growing public Cloud, but we're also demonstrating that we can seamlessly connect it to the private Cloud and now we're bringing services back from the public Cloud onto the private and your own data centers. And that is so profound because now customers can say, Oh I like the RDS API's, I like the RDS management model. I can now put the data wherever I need it for my business purposes. That hybrid, bi-directional highway is something we're uniquely building with Amazon. And, hey, we're obviously working with other Cloud providers, but they are our preferred partner and we're pretty thrilled. >> Now we'll be talking about last year and what entailing that was. The clarity that allowed customers now to say, okay now I get the Cloud strategy, 'cause it wasn't clear before and boom, double down. >> Yeah, it's just been absolutely great. Customers get it now, and obviously seeing Andy here again this year, you've got a number of customers sort of dipping their toes in the water, you know. Now it's sort of like, okay, I'm ready to go. When we laid the one and a half year road map of availability zones, everybody sort of looking at that. I had a couple of customers saying, hey, you know I would really like that in Q1 rather than Q2. It sort of like okay, let's just sign the deal, we'll figure it out. >> Gov Cloud, we saw that in June. >> Yeah, in the public sector. >> Talk about Andy, because we got to know Andy over the years as well. A great executive, both you guys are great leaders of your team, both great managers. You're kind of both no-nonsense kind of executives, you get stuff done. If this block is in the way, you kind of remove them, you do the right thing. Andy's committed, he's committed to this, you're committed, this in for the, you're in it to win it, that kind of loyalty plus he's also customer-driven, heavily Amazon. You guys are, too, this deal is not just Amazon trying to do hybrid, it's customers. Can you share some inside baseball around the kind of customer demand around Cloud on premise with VM, with specifically Amazon website. This is new for Amazon, they've never done this. >> Yeah. >> They've never done this kind of of deal. >> It really is unique in that way, and because it was unique we went into it kind of trepidously, How's this going to work?" We committed ourselves, we do quarterly business reviews with Andy and I. You know, hey a lot of little action items, they get finished the week before the Andy-Pat meeting. (laughs) >> You know, there we are, every quarter, coming together and really building the teamwork down the teams, right, as well, down the organizations into the field, and just finding all sorts of you know. We're super excited about the RDS announcement, but hey, we have a pipeline of projects behind that. >> We're reporting that customers want this. >> Oh, Absolutely. >> This is a customer, not a kind of like you guys want to take over the Cloud, this is a customer-driven thing. >> Absolutely, Amazon don't do anything, I mean nothing, unless they believe there is meaningful customer demand. They are extraordinarily customer-focused in that respect, you know I think there's something we can all learn from their myopic focus on that aspect. They're engaging with customers, building things that customers like and the response obviously from the RDS announcement was really quite overwhelming. >> So, we've been asking people all week, and I'll ask for your commentary. The conventional wisdom on that deal is it was a one-way trip to the Hotel Cloud-ifornia and it's become boon for the data center. Why the misconceptions, why are you confident that it continues to be a boon for both companies? >> Yeah, hey, and we got to go prove it. At the end of the day, we have to go prove it. The analysts were sort of viewing it, there's this big sucking sound in the public Cloud where everything congregates. Point one, and three years ago, that was the prevailing wisdom, right, that that was going to be the case. Now, everybody, like I had the big CIO who basically said, hey, I've got 200 apps, I tried to move them to the public Cloud, I got two done. I can build new things there, but this moving was really hard until we had the VMC service. So this ability to move things to the Cloud and from the Cloud, I call it the three laws. The laws of physics, the laws of economics, and the laws of the land. The laws of physics, hey if I need 500 millisecond round-trip through the Cloud and the robotic arm needs a decision in 200 milliseconds, eh, you know, physics. Economics, I'm not going send every surveillance picture of the cat to the Cloud, bandwidth still costs, right? Then laws of the land, right, where people say, governance issues, GDPR, other things. Because of that, we see this hybrid world, in particularly as Edge and IOT becomes more prominent we fully expect that there's going to be more of that, not less. As I showed in my keynote last year, this pendulum of centralization and decentralization has been swinging through the industry for 40 years. And we don't see that stopping and Edge will be a force of more data, and computers pushing to the Edge, and that's obviously part of our keynote, as well. >> I wanted to get in a comment about how you talk about bridging technology gaps, or >> Yeah. >> Or segments with that VMware. Before I want to just point out that you're wearing a VMware tattoo for the folks who can see it. Pat is making all his employees have a VMware tattoo. (laughs) Yeah we got a tattoo machine, yeah, we're in Vegas, so. >> Ought to order some more CUBE stickers. What happens in Vegas stays on your arm, remember that. (laughing) You ought to keep the tattoos up, it's funny and clever. Let's get back to the keynote. You said a couple things I want to get your reaction to. One, the bridging of technology successfully has been a transformational gift that VMWare has had with good technologists and good engineers. So I want you to talk about that. Also, you had a quote around the old adage of the network is the computer, that's old, the new adage is the application is a network, I think is what you said. >> Precisely. >> Tell about this bridging and why that quote, that was a really good quote, I want to expand on that. >> Clearly, we think about the history of VMware and it started with this idea of HP, Dell, IBM, etcetera and all of a sudden it became VMWare with different hardware underneath it. We bridged across those hardware islands. Those hardware islands, when they started, weren't bad. Extraordinary innovation but all of sudden customers want to start using them together and VMware bridged that gap. We talked about the device guy, and BYOD, and the iPhone showing up and all of a sudden IT wasn't ready to manage it, but customers wanted it. So we see Windows devices, Macs, and IOS, and Google, and Chromes and so on. How do you bridge it, VMware is doing that. We saw many of the networks, boy, you know what my protocols are about. Okay, Again, we're bridging across that, and that's clearly where NSX is uniquely playing. So this idea of bridging across these elements, right, is deep in our heritage. Right, we do it in an ecosystem-friendly hardware independent now, Cloud-independent way, right. Where we're now saying in the Cloud health acquisition, we're going to bridge across these worlds and make them easier for our customers to consume them, wherever they may be. These are powerful innovations, capabilities that are emerging, but customers say, oh you know, where is that workload running? Increasingly, in the future, I'm going to say, Oh VMware is running it for me, and not actually say, oh where did you run that VMWare? Because we are going to meet their policies, we're going to meet their business needs. >> And that bridges what, the Cloud? The current bridge is what, the Cloud, or ? >> Oh yeah, absolutely. Right, but the Cloud will now be my private data centers as well as different public resources. I think one of the next big challenges that we'll have to lean into more aggressively is the data challenge. Hmmm, where's my data? In a Cloud world, in a SaaS world, I want to be able to use my data for different purposes, I don't want to necessarily locked in a particular SaaS application when I built up an S3 bucket. Maybe I want to run some of my private analytics on that. Oh, the laws changed and I now need to bring that back on premise, and you know... >> Is it going to cost anything? Yeah, and you know, bridging across those worlds. It's both an application statement, a networking statement, and a data center. >> So application is a network? >> Yes. >> I think if it were a network, not the network. >> Yes. >> What do you mean by that? >> I gave you an example, a heads-up display in a construction hat, as you're wearing a hard hat. This AR-VR application running in my display for my hardhat and I'm a factory worker now, right, I'm getting cool new x-ray vision into the machine of what's going on. I'm able to look through walls at what's going on. Wow, that's pretty cool, and I'm getting real-time safety information of what's going... oh, that's incredible. Now think about the application behind that. I'm accessing 30 year old building plan databases, I'm accessing systems of record, system designs that are coming from my equipment suppliers and cool new container-ized AR-VR applications. That's my application, when I think about it in that environment. And what a complex network of different services, legacy applications, modern, new, microservice, >> Data sources, those kind of things. >> All of those things are brought together into my application, and in that sense, the application is a network of these different services, data sources, et cetera. We believe in that, bridging across silos isn't important, its essential to do that because, as you say, security models across that. When that application isn't performing like I expect it to, how do I go, even debug it? Because now, a flag went off, saying the hardhat AR application is not performing well and I have upsets. You know, manufacturing people on the floor not being able to get real-time data: I got to go debug that. You know, what's not working right? It's this network that needs to be able to be analyzed, any metrics across all of those. I need security models, you know, the ability to essentially load-balance across a complex network of services. That's the world we're headed to and we think we have some pretty good opportunities to help customers get there. >> So, Pat, explain how technically does the platform of VMWare change and evolve to meet those needs? Is it sort of embracing those new services or is it rewriting at the core, can you explain that? >> Yeah, it's some of both, I'll give two examples of that: one is that we're embracing the Kubernetes layer. Right? That's what you heard us say. I'm going to make Kubernetes a new dial-tone for the VMWare layer. I didn't create Kubernetes, it's part of open-source community, but I tell you what, we are going to help evolve it, standardize it, make it part of that infrastructure. So that Kubernetes dial-tone, right, (laughs) Hopefully, everybody is old enough to understand what that means, right? You know, boom, it is always there and we're going to make sure it's always there. So I'll say in some cases we're embracing new industry innovations and that one happens to be CNCF, the Cloud  Native Computing Foundation in that community, so we're participating, we're contributing. In other cases, we got to go rewrite things. You know, NXS, the current version of NXS was primarily bound to V-sphere and customers have increasingly said, oh I need to make NXS much bigger then we ever conceived for the first NXS, and I need it to work on all these other environments, including non-V sphere. So that's why we did what we called NXS-T, which is a fundamental re-architecture of NXS. There's probably three or four lines of code that we re-used, but that's about it. (laughing) I mean it is a major architectural redo because now we're saying I need to scale this, essentially, across the planet. I need it to work in VMWare and non-VMWare environments. I need it to be native in multiple public Clouds and I need to stretch it into the container level. That was a big re-architecture project that we undertook. In some cases it will be both, and like in Cloud health, it will be things inorganically go acquire and then figure out how to meld them into the infrastructure that we build and offer. >> So, do you, as the CEO and a technologist, you have a very interesting organizational ownership, governing structure. Do you ever feel constrained writing an 11 billion dollar dividend, do you ever feel constrained in terms of your ability to fund the R&D necessary to do some of those things? >> No. >> Grayson said the same thing off camera, I'm asking you on-camera. >> Generally, no. Am I constrained in how much R&D I can do? Well, hey, I've got a budget, we build a P&L, we communicate it to the street and every day possible, I'm pushing to grow the business faster so I can shove more dollars into one of two places. More dollars into R&D or more dollars into sales and customer facing. If Robin Matlock is here, I keep giving her the table scraps at the end of those things. Build products that are innovative, radical, and break through. Sell products and support our customers using them. That's the two things we're ... >> That's the golden rule. >> And, by the way, you made some M&A, you've got Cloud health, which is a good thing. That was a vertical focus in health care. >> Yeah, and not just healthcare. Cloud Health is a multi-Cloud management platform. They've built their initial focus primarily in cost management of multiple Clouds, but, you know, we're going to build that platform out for every aspect of compliance management, performance management, et cetera. >> Multi-Cloud play, Boston-based. >> So, final question for you: as you look at NXS, it's becoming kind of that feels like a TCPIP moment. Okay, we thought you Andy gotcha to sign a baptism. He was very complimentary of NXS. I asked him what TCPIP did to connecting, inter-networking, creating, and boom, the OSA model stopped at TCPNIP, that created a lot of opportunities and, welp, that's where we are today. Is there a disruptive enable as powerful as TCPIP that you see coming, and is that an NXS mindset? What's your vision on this, because this is what the Cloud needed, it needs interoperability, it needs to go to a level to create goodness in the ecosystem, wealth creation for entrepreneurs. This is the new era, where is that disruptive enabler? >> Well, a couple of comments, and one is: if Andy says it, it's right. (laughs) >> Yeah. >> Yeah, you remember, this is the one Rembrandt of systems design for the last 30 years. Andy is that profound in his contributions to the industry. In terms of technical leadership, visionary leadership, he's very high on my list of seminal figures of Silicone Valley. At the systems level, it's just hard to get better than Andy, so you know, he honored you by coming on theCUBE. He honored us by being here at VMworld. >> He is complimentary of NXS in his position in the marketplace as a leader, he's very candid about that. >> Now with NXS we really are, I think, in this moment where you're saying okay, the old model of networking simply doesn't work. It must all be done from a software level. This isn't just like putting a few APIs on top of my hardware and saying it's now software-based, it is conceiving a globally-distributed control plane that allows you to essentially span multiple Clouds, multiple data centers, multiple services anywhere on the planet, totally consumable for services that run on top of it, transforming every aspect of a layer four through seven service, low balancing, fire wall it, all of those, routing, all of those need to be reconceived in a totally distributive fashion and underneath saying, we support a very, very broad range of different hardware. The hardware can never constrain what you do at that SDN ladder, and that's the core of our virtual Cloud network strategy. Obviously, Velocloud, hot product. ST WAN, branch transformation, pushing that edge of the network out in a fully Cloud-based way, very excited about that capability. >> We know you're probably under a lot of time pressures so we're going to let you go. Five seconds, summarize VMWorld 2018, what's this about, what's the vibe here in five seconds, go. >> Five seconds? >> Or 15, 20, 30, whatever you need, go. (laughs) Alright, take 10. >> It is, the seminal moment where the industry is seeing the value of the multi-Cloud era. Right, and now we're giving them the tools to embrace it. >> And two leaders have, on stage, Andy Jassy C of A WS, Pat Gelsinger, CEO of VMWare, are talking about multi-Cloud validation from customers and strong technology teams in business. Congratulations on your success, okay. >> Thank you. (laughing) >> Pat Gelsinger, we pay you for theCUBE sticker, we get royalties on that. Thank you so much, Pat Gelsinger inside theCUBE, CEO of VM here, breaking it down, great vibe here, VMworld 2018. Stay tuned after this short break, I'm John Furrier with Dave Vellante we'll be right back. (techno music)

>> 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. I'm Stu Miniman joined by my two guest hosts that have spent a bunch of time with us this week. John Mark Troyer and Justin Warren. Thank you, gentlemen for joining us for the wrap. >> Thanks for having us. >> Thanks for having us. >> We get to have a lot of fun. We get to hang out with community people, geek out on a lot of stuff. This is also a really good checkpoint for a lot of the IT industry. VMware, 800-pound gorilla in the data center. I put out one tweet that was like the 800-pound gorilla in the data center or the 800-pound gorilla in the cloud. The partnerships matured quite a bit, in my mind, for the last year. That was one of the big things that I've seen. RDS on-premises is definitely the thing that sticks out to me the most. John, let's start with you as to, checkpoint from last year. What impressed you? What are they making progress with? Let's start there. >> I think the RDS announcement was maybe even undersold here. We'll see in the coming months what actually happens and if everything works the way it's supposed to work. I think a lot of people who are putting chips down on various outcomes and scenarios in cloud world did not cover that one space in the roulette wheel. Cause that's actually pretty interesting. Stu, I kind of see this as a year of promises kept. Some promises that were made in years past are starting to come out. This multi-cloud world seems more real. VMware's relationships with various clouds and the hints that were thrown are there's more to come. It seems real. The cloud starting to come back on-prem. Both EBS on-prem and now Project Dimension with VMware being a service provider. I've talked to a number of vendors and you and I, Stu. Some are here on theCUBE. People starting to do more managed services from the cloud back into your data center. I see the multi-cloud world working and then this kind of blurring of on-prem and cloud even more. That's kind of what I'm seeing. >> Yeah, I've got to agree. It's that idea that cloud is a state of mind. It's not a location. >> We say it's an operating model at it's core, right? >> Right, yeah, and I think we're seeing a lot of those ideas come to fruition now that you can operate like a cloud on-site. It's how you run things, it's not where exactly you put it. With the multi-cloud world, like you said, we can have, some of it can be on-site, some of it can be in one cloud, another cloud, lots of different clouds. Some of it will be at the edge. We're seeing a lot of growth in edge computing, which is essentially just another way of doing on-site. Being able to use the same tools, and that, for me, is the idea around the RDS announcement. It's the same thing that you're used to in public cloud. Now I can do that on-site. We're seeing a real cross-pollination. You can take VMware and run that in cloud. You can take things from the cloud and now run it back on site. It's pretty exciting. >> This is awesome. We have an easy button. Customers just push a button. Any data, anywhere, moves all over the place. Laws of physics, throw them out. Come on, guys. I need some critical analysis here. The trope that I would have, always, when I became an analyst an eight years ago was like well, if it wasn't for management and security we would have this all sorted out. The multi-cloud world is made progress, but when I still look at it. RDS, super exciting. The thing that's most exciting about it? That's on-premises, it's doesn't have connection to Amazon, but I'm doing cool things with the exact same kind of bits there so I can do it here or there. Doesn't mean, necessarily here and there, or spread between there, because petabytes of data don't just float across the ether. We're still using things like the AWS Snowballs when we have to move a lot of data. Yes, it's matured, but when I look at the management of multi-cloud and how simple, there was a great comment from a company that's been around for a couple of decades on theCUBE and he said look, the new companies all say we're going to make this super easy. It's like well, because you don't have the trusted brand to set beside, simple would be nice but cloud isn't simple. Multi-cloud sure isn't simple. >> There was, probably, a surfeit of single panes of glass here at the show. Any app, any cloud, any whatever. Single pane of glass. We'll blueprint it, we'll manage it, we'll do it. That does seem like that probably isn't that real world. >> Multiple single panes of glass. >> Please, Justin, give me a touchpoint. When you talk to an administrator, how do they spell single pane of glass? >> Oh yes, P-A-I-N, yes, a single glass of pain. That's generally what it is. I think that the manageability and the operational side of things, that is where there's a lot more development required. Cloud is, yes it's a state of mind. It's a very different way of operating and a lot of the tools, particularly in the VMware community, a lot of what people are used to here is very much point and click. It's not really as automated as it would be in, say, developer land. I spend a lot of time with developers and a lot of what they're used to is all programmatic, it's driven from the API. We're seeing movement with things like PowerShell and VMware administrators are getting more comfortable with the idea of scripting and so on. But they're not programmers. They still need GUI tools. They still need things that are able to do point and click. Some things are better in that environment. I think we still have a long way to go with things around automation. The other thing that still has a long way to go, I think, is security. Security particularly around the networking of how you inter-connect with all of these things and do so securely at scale. There is a lot of invasion and work that's required to actually make that happen. >> Absolutely. John, do you have some comment there? >> I was going to say I think you're right. Especially on all those points. The community booth back here behind us this year had a VMware code section, which was jam-packed the whole time. For the first time. VMware's been trying to speak to developers for 10 years and not quite connecting. Now, these weren't developers back there, these were admins, and they're not going to ever be programmers, but they're going to start to learn more programmatic paradigms, automation, things like that. It was super popular this year. >> Luckily, we don't actually need programmers anymore, John, cause it's coding, which means you're really just coping, pasting, and modifying things and everything. Heck, I've even interviewed marketing people that are like oh, server-less, I can build with that stuff. Super easy. I don't think we need everybody to learn to even code, as it were. We bridged that gap. It's matured, it's become easier. They pulled over some of the, it was the EMC code team. It's half that team over there. They had some good gamification. >> Stu, I am an optimist and I think the glass is half full or 40% full at least. We've done some CUBE stuff, theCUBE's been all over the world here this spring, all through 2018. I've done a couple shows with you. The difference that I saw this year was that the use cases were real and the time to value was real. People are implementing cloud projects, multi-cloud projects, and they're getting to a good milestone within weeks or months. Admittedly, these are big, multi-national companies, so it's really at the top level where they have the army of people to do it, but sometimes these projects were very small and they were real. They weren't just marketing hokum up on stage. Of course, they're not the full enterprise in a couple of weeks, but that's the difference this year, I see, Stu. I'm 40% full. >> Absolutely, I'd say look. Energy level was up. Two years ago it kind of hit a nadir. It was doom and gloom. We were all over at the eye candy bar saluting the great run that VMware had and wondering who the next CEO was been. Now, energy level's back up. Investment in the ecosystem, oh my gosh. I don't think I've seen this many parties ever at a VMworld. We got to talk about something other than cloud so give me your non-cloud takeaways from the show. Areas that people should learn more about, things you saw in the ecosystem or from VMware or the community. >> I think that's one of the things I've noticed here at the show. Wandering around the show floor, unlike some of the other shows where it's we will have a storage show or we'll have a backup show. There's a lot more balance this year. There seems to be a good mix of some of everything. I think that it shows that in order to run a successful IT shop, you actually need to have a balance of, you need some backup, you need some data recovery, you need to have some software, you need some monitoring, you need to have security options. Go and have a look at all of the different vendors that are at a show like this to be able to make sure you have a portfolio approach to how you run things. >> Totally. I remember there were a couple of years, four or five years ago, it was like oh, it's VM storage world. >> Yeah. >> OK, yeah. John? >> There is a lot of storage here, but the storage is all connected to the cloud now. I think if you look at some of the big booths and some of the start-ups who have gotten funding recently. Large rounds. Cohesity, Datrium, Rubrik, folks like that, they're delivering on promises made in earlier years. Not particularly like oh wow, I never thought of, but this was the vision that we laid out and now we're delivering it this year. Big rounds of funding, big customer movement, connection to the cloud and solid, interesting DR as a service and data, as opposed to storage, ideas. I thought that was one of the more interesting aisles this year over there in the booths. >> To riff on what you said about developers and the bridge to the code idea, we see Puppet is here at the show, HashiCorp is here for the first time. >> Docker's there, of course. >> Docker's here. >> C & CF had a booth. >> Yep, C & CF had a booth. These are people that you wouldn't have expected to see at a VMware show in years past. >> One thing that struck me is companies with a mission for good. Pat Gelsinger kind of sets the bar. Talked about it in his keynote. Do better, do good, sets that example. He climbed Mt. Kilimanjaro for charity earlier this year. They had Malala up on stage with Sanjay Poonen. I did a couple of interviews here which were inspiring. Mission-driven companies and great to see the infrastructure in software companies being like hey, we're enabling and helping it. That was one to me. Takeaways from the community? Other things as we get to our wrap? >> I do wonder about that point. Just to add a little, slightly critical note on that. I think that there has been a bit of a tech lash, a bit of a backlash against tech companies. I wonder whether, I would like to see more from tech companies to show that this is real. That that social conscience is a real thing and it isn't just a bit of marketing that they've spray painted on to the front of the company. The fact that we had Malala here giving a keynote indicates that there is a commitment to it. I would want to see that carry through for the next couple of years, at least, to show that that sort of thing is real. And certainly, from the rest of the ecosystem, I expect that we're going to see a lot more. >> Diversity in the community, absolutely. I do realize we have three white guys of a certain age sitting here. We try to add diversity. I had my first European host on the program. Lisa's been on a lot this week. We're building out our bench, we're looking to add diversity. John, yeah, the community. >> Community, again, yeah, community was good this year. A lot of old faces have stayed around, which is really interesting but also people have left and come back. You saw people who have gone into the AWS and Microsoft ecosystems coming back in here. Again, some of those old faces. Also, new faces. Global diversity from the southern hemisphere and from other countries that you wouldn't expect are here today. That was super interesting. I do see a lot of energy, a lot of excitement about their careers going forward. I do see that tech needs to be, there was some symbolic do-good things here. But I mean, Justin is a little bit involved in your own home country about how the government has the power with technology to do good or bad. I think that may be an emerging thing that we see here now as you get a layer down of not only charity work but the impacts of technology. I bet we'll end up talking about that next year, Stu. >> Guys, we could start talking for a lot longer. The good news is I know how to get in touch with you. For our audience, by the way, you can hit us all up on Twitter, through various social channels. Jtroyer, jpwarren, I'm of course @stu. That's just S-T-U. Blue Cow is on Instagram. Follow the adventures of Blue Cow, showing where Justin's going all over the place. Thanks so much for joining us. Great coverage here. This community's where I get a lot of my guest hosts and still, it's like homecoming coming to this place. Thank you for watching theCUBE. (electronic tones)

>> So, we see this picture, right, of the hybrid cloud. And we've talked about how we do that for the private cloud. So, let's look over at the public cloud, and let's dig into this a little bit more deeply. You know, we're taking this incredible power of the VMware Cloud Foundation and making it available for the leading cloud providers in the world. And, with that, the partnership that we announced almost two years ago with Amazon, and on this stage, last year, we announced our first generation of products. No better example of the hybrid cloud. And for that, it's my pleasure to bring to the stage my friend, my partner, the CEO of AWS. Please welcome Andy Jassy. (crowd applauding) (upbeat music) Thank you, Andy. You know, you honor us with your presence. You know, and it really is a pleasure to be able to come in front of this audience and talk about what our teams have accomplished together over the last year. Can you give us some perspective on that, Andy, and what customers are doing with this? >> Well, first of all, thanks for having me. I really appreciate it. It's great to be here with all of you. You know, the offering that we have together, VMware Cloud and AWS, is very appealing to customers because it allows them to use the same software they've been using to manage their infrastructure for years, but be able to deploy it in AWS. And we see a lot of customer momentum, and a lot of customers using it. You see it in every imaginable vertical business segment. In transportation, you see it with Stagecoach. In media and entertainment you see it with Discovery Communications. In education, MIT and Cal Tech, in consulting, Accenture and Cognizant and DXC. You see it in every imaginable vertical business segment. And the number of customers using the offering is doubling at every quarter. So, people are really excited about it. And I think that probably the number one use case we see so far, although there are a lot of them, is customers who are looking to migrate on-premises applications to the cloud. And a good example of that is MIT, where they're right now in the process of migrating, in fact they just did migrate 3,000 VMs from their data centers to VMware Cloud and AWS. And this would've taken them years before, to do in the past, but they did it in just three months. >> Yeah, it was really, really spectacular. And they're just a fun company, and, you know, to work with, and the team there. But we're also seeing other use cases, as well. And, you know, probably the second most common example is, well I'll say, on demand capabilities for things like disaster recovery. And we have great examples of customers using it for that. And, one in particular is Brink's, right? Everybody knows the Brink's security trucks, and you know, armored trucks coming by. And they had a critical need to retire a secondary data center that they were using, you know, for DR. So we quickly built a DR protection environment for 600 of the VMs. You know, they migrated their mission-critical workloads, and voila, stable and consistent DR, and now they're eliminating that site, and looking for other migrations, as well. >> It saved 10 to 15 percent in the process, doin' it. >> Yeah, it was just great. You know, one of the things I believe, Andy, customers should never spend capital on DR, ever again, with this kind of capability in place. It is just that game changing. You know, and, obviously we've been working on expanding our reach. We promised to make the service available a year ago, with the global footprint of Amazon. And now we've delivered on that promise. And, in fact, today, or yesterday if your an Aussie, right down under, we announced in Sydney as well. And now we're in US, Europe, and in APJ. >> Yeah, it's really, I mean it's very exciting. Of course, Australia is one of the most virtualized places in the world, and it's pretty remarkable how fast European customers have started using the offering, too, in just the quarter that's been out there. And probably, of the many requests customers have had, you've had, probably the number one request has been that we make the offering available in all of the regions that AWS has regions. And, I can tell you, by the end of 2019, we'll largely be there, including with GovCloud. So, GovCloud-- >> Oh yeah, you guys have been, that's been huge for you guys. >> Yeah, it's a government-only region that we have, that a lot of federal government workloads live in. And, we are pretty close together having the offering, FedRAMP authority to operate, which is a big deal and a game-changer for governments, because then they'll be able to use the familiar tools that they use in VMware not just to run their workloads on premises, but also in the cloud as well, with the data privacy requirements and security requirements they need. So it's a real game-changer for government, too. >> Yeah, and as you can see by the picture here, basically before the end of next year, everywhere that you are, and have an availability zone, we're going to be there running on top of you. >> Giddyup! >> Yeah, let's get with it (laughs). Okay, we're a team, go faster, okay. You know, and, it's not just making it available, but this pace of innovation. And, you know, you guys have really taught us a few things in this respect. And since we went life, in the Oregon region, we've been on a quarterly cadence of major releases. M2 was really about mission-critical at scale, and we added our second region. We added our Hybrid Cloud Extension. With M3, we moved the global rollout, and we launched in Europe. With M4, we really added a lot of these mission-critical governance aspects, started to attack all of the industry certifications. And today, we're announcing M5, alright? And, with that, I think we have this little cool thing that we're doing with EBS and storage. >> Yeah, well you know, two of the most important priorities for customers are cost and performance. And so, we have a couple things to talk about today that we're bringing to you that I think hit both of those. On the storage side, we've combined the elasticity of Amazon Elastic Block Store, or EBS, with VMware's vSAN. And we've provided now a storage option that you'll be able to use that is much, it's very high-capacity and much more cost-effective. You'll start to see this initially on the VMware Cloud native USR5 instances, which are compute instances that are memory-optimized. And so, this will change the cost equation. You'll be able to use EBS by default, and it'll be much more cost-effective for storage or memory-intensive workloads. It's something that you guys have asked for, it's been very frequently requested, and it hits preview today. And then, the other thing is that we've worked really hard together to integrate VMware's NSX along with AWS's Direct Connect, to have a private, even higher performance connectivity between on-premises and the cloud. So, you know, very, very exciting new capabilities that show deep integration between the companies. >> Yeah, you know, and that aspect of the deep integration has really been the thing that we committed to. You know, we have large engineering teams that are working literally every day, right, on bringing together, and how do we fuse these platforms together at a deep and intimate way, so that we can deliver new services. Just like Elastic DRS, and the vSAN EBS, really powerful capabilities. And, that pace of innovation continues. So, M Next maybe, maybe M, maybe six? I dunno, we'll see. Alright, but we're continuing this toward pace of innovation. You know, completing all of the capabilities of NSX, you know, full integration for all of the direct-connect capabilities, really expanding that. You know, improving license capabilities on the platform. We'll be adding PKS on top of, for expanded developer capabilities. >> Yeah! >> So just, oh, thank you. (audience applauding) I think that was formerly known as storage Chad, so anyway, alright. And, you know, we're continuing this pace of innovation, going forward, but I think we also have a few other things to talk about today, Andy. >> Yeah, I think we have some news that hopefully people here will be pretty excited about. We have a pretty big database business in AWS, and it's both on the relational and on the non-relational side. And the business does billions of dollars in revenue for us. And, on the relational side, we have a service called Amazon Relational Database Service, or Amazon RDS, that we have hundreds of thousands of customers using, because it makes it much easier for them to set up, operate, and scale their databases. And, so many companies now are operating in hybrid mode, and will be for a while. And a lot of those customers have asked us, can you give us the ease of manageability of those databases, but on premises? And so, we talked about it, and we thought about it, and we worked with our partners in VMware, and I'm excited to announce today, right now, Amazon RDS on VMware. (audience applauding) And so that will bring all the capabilities of Amazon RDS to VMware's customers for their on-premises environments. So, what you'll be able to do is, you'll be able to provision databases, you'll be able to scale the compute, or the memory, or the storage for those database instances. You'll be able to patch the operating system or database engines. You'll be able to create read replicas, to scale your database reads. And you can deploy those replicas either on premises or in AWS. You'll be able to deploy in high-availability configuration by replicating the data to different VMware clusters. You'll be able to create online backups that either live on premises, or in AWS. And then, you'll be able to take all those databases, and if you eventually want to move them to AWS, you'll be able to do so rather easily. You have a pretty smooth path. This is going to be available in a few months. It'll be available on Oracle, SQL Server, MySQL, Postgres, and MariaDB. I think it's very exciting for our customers. And I think it's also a good example of where we're continuing to deepen the partnership, and listen to what customers want, and then innovate on their behalf. >> Absolutely. Thank you, Andy, it is thrilling to see this. (audience applauding) And as we said when we began the partnership, it was a deep integration of our offerings and our go-to-market. But also building this bi-directional hybrid highway to give customers the capabilities where they want it. Cloud, on premise, right, on premise to the cloud, it really is a unique partnership that we've built, the momentum we're feeling to our customer base, and the cool innovations that we're doing. Andy, thank you so much for joining us here, >> Yeah, thanks for having me. >> At the Emerald 2018. >> Thank you guys. Appreciate it. (upbeat music)

>> Narrator: Live from the Mandalay Bay Convention Center in Las Vegas, it's theCube, covering VMworld 2016. Brought to you by VMware and its ecosystem sponsors. Now, here are your hosts, John Furrier and Stu Miniman. >> Hello, welcome back everyone. We're live here at VMworld 2016 in Las Vegas, the Mandalay Bay Convention Center. We're actually in the hang space, broadcast booth It's theCube's SilliconANGLE's flagship program, we go out to the events and extract the signal from the noise. I'm John Furrier and my co-host Stu Meneman, our next guest, Pat Gelsinger, CEO of VMware. Great to see you again. Every VMworld, every year that we've done the VMworld, you've been on theCube. >> Well, it's always a pleasure. You guys are fun. You do your homework. I enjoy our time together, and I can't imagine VMworld without theCube. Look, we are really impressed with the vision you've laid out, because the number one question we get asked on theCube and in backchannels like CrowdChat and Twitter, is VMware ecosystem is looking for the straight and narrow, they want that, they want to see the path, the 90-mile stair if you will, so they can actually accelerate their business. >> Pat: Yeah. >> Can you laid that out, and just quickly review what your key points were for the folks that didn't capture the full keynote. >> Well, clearly we said, boy, we gave clear data with regard to what the cloud market looks like, what it's going to look like today, 2021, 2030, crossover points, and really the key summary of that is it's a complex world. It's going to be a multi-cloud environment for our customers, and they want to know, how do I not only build hybrid clouds, private clouds, and how do I take advantage of public clouds? And we gave a comprehensive view of what that looks like, the cross-cloud architecture. Here's a way that we can bring all cloud embodiments into a common framework. Cross-cloud architecture, two big components are part of it, build your private cloud, enable that as a service, that's a cloud foundation, bring it together, vSAN, vSphere, NSX, along with new lifecycle management capabilities, making that easy, do it as a service with IBM and our partnership that we announced there, but we expect many more of those with other vCloud Air Network partners, and then the cool new Cross-Cloud Services. Make those available, embrace any cloud, and then give our enterprise customers the tools to manage in this cross-cloud or multi-cloud environment. >> John: What's the catalyst for this announcement? Was it an epiphany, was it more that the market was ready for it? Because now, multi-cloud, but how you talk about it, any device anywhere, that's been the previous message. But now it catalyzes around this positioning. What was the moment of truth where you said okay, this is, we're going with this. It doesn't seem like you're betting the ranch on this, but it is betting the ranch on this in a way, because this is, as you said, the future, and it's going to be mostly your journey. So why did it come together? >> A couple of things happened. If you remember last year's VMworld, we did this little NSX demo where it says, we can connect NSX onto the cloud, you remember that? >> Yeah. >> Literally, Guido comes into Raghu and I, about two weeks before VMworld last night, and he says "we've got to work it. And can I demo it in my session?" Right, at the thing. Raghu looked at each other and he says, "Okay, let's do it. Let's see how people respond to it." So that was one catalyst. The second catalyst, we had a couple of customer meetings where the customer said to us, and he says, "This is my best. I'm doing this on Amazon, I'm exploring Azure over here, I've got a boatload of VMware, I'm doing this many- help me solve these problems. So it was clearly customer feedback, and there's a vibrant response we had from this little last-minute demo that we did at last year's VMworld, and sort of out of that, we said, "Let's really take this seriously. Let's go dive deeply into it." And as Guido said in the keynote, we've now talked to about a couple hundred customers and a huge response, and some, you know, usually when you do a cool new product, people say let me try that. In this case, the response we've gotten is, I need that now. I mean, it's a very definitive response. These are the kind of things I need to manage today's problems, so I guess Guido's already late in getting it done, so I've got to crack the whip harder and get this in the market. >> So it's not so much retooling, though we did talk about yesterday at the things, you're kind of mid-flight but you're adjusting to the market. >> Absolutely. Absolutely. And clearly our cloud journey's been one where, you know, if you go back and I gave some of the data 2011, no one expected the public cloud to be where it was, where it is today. I mean, it clearly accelerated faster, some of the ease of use, efficiency characteristics, hey, this is a capability that nobody quite expected to grow this rapidly. And it's now permeated Enterprise customers who are starting to take advantage of it. But they don't have the tools to really take advantage of it. >> So some key leads we were reading yesterday in your keynote, you know we always like to read between the lines, kind of like the messaging inside of it. >> Sometimes you get it right, sometimes, you know. >> We get it right most of the time. Your comment, your sit-down with Michael Dell was really interesting, okay. Because this is an open ecosystem play. His first point was about open ecosystem. You've been banging on this from day one since you've been CEO of VMware, since the throw of the first pitch of the NetApp event that got viral with that jersey on. >> I went to the NetApp customer partner event last night, every year I'm there as well. Just like theCube, I go to the NetApp event. >> He could say that you have been hardcore about open ecosystem from day one, and with the merger now set for the 7th, the merger that you can transact on the 7th, you still want to be independent. The open ecosystem is super important to you, and Michael, I heard it right from his mouth. Share some color on why and how that's going to evolve. Will everyone have untempered access to VMware, will all partners have the same level of access and visibility? >> The simple answer is yes. We're going to continue exactly on that strategy as we go forward. And clearly I'm going to do more with Michael and the Dell team, you know, as we see that going forward. But it's incumbent upon us, even as we do more with Dell, that we lean in more aggressively to our HP, to our Lenovo, to our Fujitsu, and our other partners as well. So we see that as a critical part. And I say the VMware ecosystem is evolving. Five years ago, would you have had the cadre of security and networking vendors? No. Would you have expected to have all the system integrators? No. I mean, we're clearly expanding. Service provider partners, our ecosystem has broadened our product portfolio, it's becoming a broader statement as well. So that's a commitment. We're going to remain a platform play, an ecosystem play, and obviously, with Michael's comments onstage, he's cheering us on. He's saying, I'm going to grow my business with VMware faster, and I hope all of the other ecosystem partners grow faster than I do. >> Is this going to be a persona change? Because now, if you look at VMware's ecosystem, which has been robust, there's some good salivation going on, there's a change-up as the ecosystem shifts. vCenter was once the big thing, now you've got NSX and all this other stuff in the cloud. Is there a persona changeover in who the target customers are in the ecosystem? >> Well, clearly, I mean, the customer's the same. It remains sort of that IT buyer, which increasingly, as I talked about in the keynote, is becoming a business buyer, but it's that core IT Enterprise customer. We're not a consumer company, we're not an app company, we're an infrastructure company and we're going to satisfy that broadly across the industry. >> John: Yeah. >> But in that context, I mean, look at it. You know, over here we have the Internet of Things. Wow, you know, we have the NFV zone. We're having a broader and broader set of who is our ecosystem, and that's absolutely going to continue as we go forward because solutions to things that we do are permeating more and more of the entire business landscape as we go forward. It's a really fun time. You know, even though I like to joke with Michael that he was younger when I first met him. And against that, you know, he and I have both been at this for over three decades. But in many regards, it feels like we're just getting started. It really is a fun period. >> So Pat, the management suite has been a challenge for the industry in general. VMware has, as John said, strong presence with vCenter. As you start reaching out to some of these environments, why does VMware kind of have the right to think that it's going to be at the center of this discussion for some of your customers, especially as they talk about like Microsoft, they've got strong pieces there. Big partners like Intel, Amazon in the play, so why VMware? >> Well, I think there's a couple of aspects to it. And, who is better to be a neutral player, to enable people to have cloud freedom? Right? If you just start with that question, and we'd say hey, we enable people to have hardware freedom. It's in our ethos to have this platform play, to have a broader ecosystem, open APIs, it's what we do. And in the cloud world, hmm, Amazon, okay, they have a legitimate role. But are they going to be the best ones to do private and public, or enable Azure or AliCloud? I think we have a very legitimate position there to say, hey, we're a neutral player, we can be cross-player, cross-industry. Secondly, the technology assets that we have, what we demonstrated on stage yesterday with Guido, think if you didn't have NSX and vRealize and some of the storage assets? That was many, many years of engineering and we pulled all of those pieces together for a comprehensive demonstration of all of those pieces in nine months. That's because we have a rich set of technologies that we can bring to this Cross-Cloud Services. >> So VMware's got a pretty sophisticated stack there, lots of customer options. When we look at the cloud native states, things change a lot. You've got a lot of open source in there, most customers don't buy shrink-wrapped software, they take a lot of components, they tend to put some things together. There's been a little open source, but we've talked for many years about, open source isn't one of the primary revenue drivers for VMware. It's not kind of core to the business. Is that changing? How do you keep making money in the open source world? How do you compete? >> I think there's two different aspects to that that I'd like to, you know, one is, essentially our strategy is, enable these new environments on the VMware franchise. So what's my revenue model? I'm going to keep selling vSphere, I'm going to sell NSX, I'm going to sell vSAN, our management tools, et cetera, even as I add more open source components into those environments. And hey, I'm pretty happy. What's the price point of it going to be? It's free, if you're an Enterprise Plus customer. We're just adding it as another set of capabilities on top of it. It's all open source bits, you've, you know, Stu, have you downloaded it yet off GitHub? >> I have not. >> Pat: You have not? I'm disappointed to hear that. Get on it, right? Get back to work. >> You've got to code tonight, Stu. No party. >> Right? You know. Too much partying for you, Stu. But it's going to be available. We're engaging this open source community, in an open source way, but we're adding our industry rock-hard components, and that's important. Because enterprises are going to start deploying containerized applications. And then you're going to start asking questions. Are they secured? Are they managed? Do you have, like it said onstage, are they monitored? How are you going to network them? And all of the sudden, it's not going to be some lightweight stateless application, you're going to start saying, this is a better way to do stateful applications. What about resilience for that? Get back to the rock-hard questions that infrastructure guys know how to handle. So this is a way to saying yes to those problems but also saying yes to these cool new developer things as well. And in our sense, you know, we think we're well-positioned to go do it, but hey, some of it may be open source projects, and hey, we're showing that we're going to support those, we're going to deliver those, we're going to embrace those as well. So I'm sure that we hired Dirk Hohndel, a longtime friend. I hired him before at Intel, so now we brought him over here to VMware. Because we clearly see, we have to enhance our position overall in the open source community. Not a strong point for VMware in the past, and we're quite committed to changing that perception going forward. >> A lot of great code in the open source, but you mentioned those things about the infrastructure. I want to get back to that point. Those complex things. Automations now playing a big role, we saw the demo today with vSAN,Yanbing was just, one push of a button, a lot of policy, automatic policy automation, that's a great direction. >> Pat: Oh, yeah. >> So, I like that direction. But now I want to bring that back to Cross-Cloud. NSX with security and automation, and protection with the vSphere and then Cross-Cloud. How do you look at this? Because I know you're a strategist, so I think we'll get the strategist angle here. It's like the inter-networking data, I was riffing with Stu earlier about inter-networking has spawned because of all these networks needed to be connected together. And that became >> A whole industry. >> A huge industry. A lot of wealth created, a lot of innovation. Inter-clouding, or Cross-Cloud as you call it, is that dynamic. How do you play well? IBM's onstage, there's no Amazon onstage. I didn't see Microsoft. Are we going to see the other clouds come in to the fold, or are you going to go to them and partner with them? >> So let's, you know, one of the architectural principles of Cross-Cloud is public APIs. So I'm not requiring any unique support from Amazon and Azure, and that's an important statement as well, because now I go to a customer who's taken advantage of Amazon, and they can look at some of those Cross-Cloud Services and then says, well, what if Amazon doesn't support you in the future? And we say, these are standard APIs. They're supporting hundreds of customers on those APIs. It's important, right, that we're engaging with, I'll say, the way that the cloud is being presented to customers and giving them better tools to manage. Now that does not mean I'm not going to do more work in integrating more deeply and partnering with them. >> So does that support like the Amazon S3 API then? >> Pat: Of course. >> Okay. >> John: Well, Sling API's a little bit different. >> Management APIs is actually more appropriate to look at it in that respect as well. How do you spawn, how do you stop, how do you manage VMs, how do you do availability cells, those are the things more appropriate to a management tool in that regard. But those are public API, public interfaces, we're taking advantage of all of those. And we are going to work more closely with the Azures and the Amazons as well, we're going to invest in those partnerships. And there may be areas that we compete with them, but we're going to go do as much as we can, because that's what our customers are asking us to do. Give me better support for those environments, which workloads can I put there? Can I network? Can I secure? Maybe in some cases I don't want my groups using nonpub, or non, you know, multi-cloud APIs. Another case is, hey, I am fully comfortable saying, >> Pick the right cloud for the job kind of thing. >> Absolutely. Right >> Is your philosophy. So slinging APIs is pretty trivial relative to interfacing with the cloud, but the customer might want to go deeper, and, because that might create a complexity issue around, and also functionality might not be as robust as, say, deeper stack integration for data management and whatnot. Are you worried, or we're watching, certainly, like Microsoft, if they feel the proprietary aspect of their stack around data for instance, that's the holy grail, it can get sticky, but still be quote 'open' but not proprietary. >> Yeah. >> So the lock inspect is the lack of openness, per se, to say with data. >> And by the way, you know, I mean, in that respect, what we want to do is present to customers the tools that they can manage those decisions. For instance, a customer may say, hey, I love that machine learning API that Google offers. It's giving me a great competitive advantage, it's not available on any other cloud, and we're going to say, hey, it's proprietary API, if you use it and your data's there, you've picked that service, but we're still going to help you manage and secure it. Another workload, the customer might say, Hey, this workload, I want to make sure has multi-cloud landing zones associated with it. So we're going to help him manage those decisions as well, because if you stay in this domain, I can make it run anywhere, I'll be able to do cross-optimize it, maybe geo-optimize it, et cetera. So it's giving them the tools to manage those decisions. Because I think, hey, you know, Microsoft, they're going to do really well with things related to collaboration of 365. I think Google, I think they're going to do really well around data machine learning. IBM Enterprise, great cloud. Amazon, hey, they've won this round of the developer cloud. Each of them has sort of staked turfs that are very clear, they're going to present value to customers, and our view is, we're going to make those all more readily consumer, suitable for enterprises to run, manage, secure, and connect their workloads into those environments. And build the connectivity into their private clouds, their vCloud Air Networks, their manage clouds as well, that's what we can uniquely do. >> Amazon is going strong in the enterprise. I agree they've won the developer cloud, but they're aggressively going after the enterprise. Mainly Oracle for now, but I'm sure they might think about speech ed that you have. >> Oh, sure. Sure, absolutely. But, you know, in that space, moving a lightweight application, okay, done. Right, you do an OEF conversion, you're done, man, you sell it like that. Oh, you've got to move the full network configuration, IP address ability, right? I've got to deal with different- oh my gosh. Those are hard things to do. The easy stuff moves pretty easy. The hard stuff, okay, that's where we're at now as we address Enterprise customers, and you just don't pick those up and relocate those onto Amazon, Azure, or anyplace else. You know, that's really where the strength of VMware lies. >> So Pat, Dave Vellante is, you know, just at this point, he can't be here for the interview, so I'm a surrogate for him. >> I refuse this interview, not having Dave here. >> John: He says, Pat, I love you forever. That's what he says. >> He asked me to have your commentary on the new era of IT. Officially announced today, the Dell EMC deal, September 7th it will go down, you know, of course that has ramifications on VMware. HP split recently. Lots of, I mean, major signal changes to the industry. What's your take? >> Yeah, you know, as I described before, this is a very disruptive period of the IT industry. Consolidation of portions of it, we think as the hardware industry has matured, stabilized, you know, not growing, still cashflow rich but not growing, we think consolidation is a very natural phase of that industry's maturation. And against that, the Dell move, it's a very bold move given the size of it, but if you look at the cashflows of the companies, as Michael says, it's pretty easy math. It wasn't that hard to, you know, this is how much the cashflow is, this is how much the debt payment is, the math works. Do the deal. >> And Michael said, if you don't understand that VMware is hugely important to that, you don't understand the math. >> Right. For that, you know, clearly, having a controlling interest there, he gets it. We have a lot of growth potential as well, evaluation increase, potential strategic role, but he also realizes that the independence of VMware is critical as well. A software company is very different than a hardware company and our position in the industry, the ecosystem, he respects that greatly. We also think that we're far from done with disruptions elsewhere. We just saw Rackspace go private. Wow, you know, that's another structured shift. Changes in the structure of Citrix as a company, at Five, as they go through their transitions in this next phase of growth, Palo Alto, a good friend Mark McLaughlin, they're driving their software and service revenue growth from hardware. Lots of changes in the industry. Collectively, we look at those and we say, boy, this period of change, disruption, radical growth, consolidation of different places, VMware sits now at a very stable and comfortable place. I've got a great battle sheet, I've got a clear path in front of me, going back to the beginning of the interview, and, right, behind my battle sheet, is this huge turbo-charged engines that is cheering for our growth, distributing us, and even a bigger battle sheet behind us. So we sit in a very uniquely wonderful position. >> I have a final question for what a great, I know you've got another point, and thanks for, first of all, thanks for your time again. What's the biggest disruption that you're watching that's motivating you, whether it's lighting a fire under your feet, or just something that you see that's so epic, and get out for that next week, as you said, if you're not out for that next week, you're driftwood. >> Can I give you two? >> John: Yeah. >> So the one that I think is clearly the biggest is the shift to the public cloud. And I'll just say, that's why the Cross-Cloud announcement was so critical. Also, I wanted to demystify some of the numbers in the keynote. So we went out there and said, very specifically, this is where it's going to be, SaaS, and IaaS, and where it's going to be at different points in time, because I think there's been all sorts of numbers floating around the industry of what it's going to look like over time. But clearly, this public cloud's becoming a big deal. If we have to present ourselves as relevant and critical to our customers in that transition, so I'll say that's the one that we have to navigate through to really position VMware for the next couple decades. The other one that I point out is really, as we talked about, the IoT and the device picture. Wow, we're going to have more machine-connected devices in 2019, >> Love that stat, by the way. >> Than human-connected devices. And that presents enormous business opportunity, right, security threats and opportunities, data infrastructure to go with it, IT, as I would say, IT has left the nest. It's now permeated, >> And software's, a primary function of all the new software that has to be written to handle those situations. >> And in that sense, you want to say, even though I'm three and a half decades in the industry, it sort of feels like we're just getting started. >> You had a spring in your step until you had a cast on it, so you still, you've got to be careful you don't break down. As you get older, your bones get a bit more hard to recover. >> That's right. >> Pat, thanks so much for spending the time, great to see you again. >> Always a pleasure. >> Pat Gelsinger, inside theCube, here in VMworld 2016 in Las Vegas. >> Mr. Vellante must be here next year. >> Dave, man date. Stu Miniman and I, Stu, you did good. You held your own. Pat, as usual, great. This is theCube, you're watching theCube at VMworld, I'm John Furrier and Stu Miniman. (techno beat)

>> Covering VMWorld 2015. Brought to you by VMWare, and its ecosystem sponsors. Now your hosts, Jon Furrier, and Dave Velante. >> Okay, welcome back everyone, we are here live in Muscone North Lobby at VMWorld 2015 San Francisco, this is theCUBE, SiliconANGLE's flagship program. We go out to the events and extract the signal from the noise. I'm John Furrier the founder of SiliconANGLE, joining my cohost Dave Velante, confounder of Wikibon.com Our next guest is Pat Kelsinger, CEO of VMware. Welcome back to theCUBE. Again every year. >> Hey my pleasure. >> Six years now in a row. CUBE alum in all our CUBEs. Thanks for taking the time. I know you're super busy. Thanks for-- >> My pleasure. >> Number one for the record. Number one guest. Number one CUBE. >> That's on the record. >> Yeah I was bugging you guys yesterday, that you tell that to all your guests. >> It's definitive that you are number one. >> Now you're the only one who's outlast us. 34 minutes is a record and your handlers were so mad at us. But that's okay. Thanks for coming on. >> My pleasure. >> So keynote was great. Just everyone who didn't watch the keynote, go check out the replay. It's on siliconangle.tv, on VMware.com under vmworld. Really good speech this year. I like how you laid out the future. Really set the canvas for the next generation. So was that kind of by design? Were you thinking hey I want to paint the picture. A lot of talk about VMware in the news that recently, speeds and feeds, Vcloud, all this product stuff. On day one. What was the purpose of the speech? >> Yeah and it really was as Rob and Carl and I were sort of architecting the speeches, and this whole idea of run, build, deploy, secure, and how we were trying to carry that theme through everything that we were doing. And having me kick it off would have been very traditional, right, and we says well what would it mean if I was wrapping it up with a much more visionary and future looking speech and ask Carl to set context. And the more we tried that idea, right it really sort allowed me to I'll say go to a different altitude, and you know rise up from some of the more techy things that I love but to put it in a context that's much more industry and futuristic. So the more we played with the idea, the more we liked the idea, and given the good response from this morning, I think it worked pretty well. >> And it brings a long term perspective, versus the short term myopic you know, what we can do and stock prices, all that stuff today so congratulations. But one of the things I noticed was this asymmetric messaging around the future. And I want to ask you because I asked you three years ago, Pat is hybrid cloud the resting, full destination or is it just a way station in between public, private cloud. Oh it's the future. So hybrid cloud I've been asking all the guests. What is hybrid cloud and what is it today, because clouds are different. Every company will have a different cloud. Is hybrid cloud a product or the outcome of deployment or engineering like distributed computing? >> You know clearly from our perspective is, you know it is the culmination right, of bringing together these capabilities. And to deliver to our users the ability to treat a range of different clouds, you know from SAS providers, through what they're doing in their own private data center, and be able to treat that in a homogeneous way. That they can look at the set of resources, they can manage across those secure, across those environments right, and in many cases have increasing flexibility of how they run their workloads and you know scale them across. That is the vision of what we're off to build. That is what unified hybrid cloud is about. Now obviously underneath that right, there's a whole lot of work to get done. And from us and a product perspective, hey that means our management products got to be heterogeneous. Right it means that they networking layer, hmm there's some things I can do when it's Vcloud Air on the other end of the wire, and you know VMware stacked within the data center, and you know wasn't that cross cloud VMotion, wasn't that cool? You know to me that was my favorite demo of the show. And then in other cases, boy there's more limited things. And we are starting to demonstrate even connectivity at the core networking layer into Amazon, right and one of the work bench will show let me show you how we can extend the NSX connection all the way into an Amazon node, I mean so those pieces are part of that broader set of vision, but we want our customers to be able to say, VMware you are my best partner to deliver that complete set of cloud services that I require. >> I like how you brought in the history lesson there, brought us some early intel days, and I want to ask you this question, the futuristic question around what's possible, because really you laid out the future. And I want to bring in kind of the Moore's law analogy. I just interviewed Jerry Chen at Graylock, and he said I was talking about cloud, and VMware's role potentially in the future, whether it's openstack today or containers tomorrow, he said, "Is this technology the best "of the last generation, or the first "of the next generation?" And I want you to take that quote in context. Talk about what Moore's laws could look like in the cloud, in the future if you assume that the market's going to be you know 10x improved, 100x improvements in these areas. How does Moore's law apply to the cloud, because the cloud is an accelerant? >> Yeah, and you know the beauty of Moore's law, you know I mean if you go down to it's fundamentals, right it's not a law in the physics sense. Right it's an observation in the economic and technology sense, right, this doubling every two years. And the power of the cloud though, is it allows you to benefit from both the scale, right you know the performant capabilities, as well as the economics right, because it's saying you know you can scale out, as well as scale up in each processor capacity. And that really is the magic of the cloud, and you're able to do that dynamically. And essentially I can rent the biggest computer in the world now I mean for ten bucks I can rent the largest supercomputer that's ever been built. It might be only for you know a few milliseconds, right but the ability to aggregate essentially an unlimited scale resource for my application you know is just fabulous. So you really benefit from Moore's law both economically as well as the scale. Each node gets bigger and faster as well. And that ability right is why every cloud is built on x86 is because you see this engine of innovation that has not stopped. >> So do you see creativity being unleashed on that, because I mean I know there's all these different themes of them over the years of unleash your creativity, but unleashing now think about that concept of unlimited as you were pointing out. What are some of the things that you see, and you guys on the VMware team see around what creatively is going to get done in that new world? >> Yeah and you know clearly some of the things that we described here as well, I mean some of the things with respect to security. Right you know these are very much game changing, and you know people as they build more and more of their mission critical environments, you have to address it. You know enabling some of these forward looking analytics environment that we described, and very much the proactive future that we described that you know, I mean you know it's not like machine learning and some of these AI algorithms. I mean these are 30 year kinds of investigations, and now you've just got this enormous compute resource that I can even take some mediocre algorithms with extraordinary amounts of data, and start bringing some incredible insights that predict behavior and opportunity. Right I mean those are exciting capabilities. If you start going into different domains as well, where all of a sudden you're, I mean you can ask almost any question, and get an answer very quickly to those when you've put your services and capabilities into the cloud. So it's so many ways, you know we're just creating you know this next phase of innovation that, as we described the proactive phase of the internet. >> You said recently, "We've committed ourselves "to the heterogeneous management strategy, "which allows us to be managing "in a multicloud environment both on and off premise, "including AWS and Microsoft Azure." Two questions. How much of AWS and Microsoft Azure are you managing today, and do you expect to be managing in the future? Let me start there. >> Yeah, and you know today we have a small amount that is being managed by a lot of customers. Right and you know it's interesting because almost every customer's asking, right but it's putting those CMP layers in, those cloud management platforms layer using those in the day and many cases it's I want to do a little bit, so I know that it works. Right I want to know that the proof point is there, that I can use it in that capacity. But what we're finding for customers is okay I need the promise of where I might go, but I got so much work to do just to operationalize my own private cloud environment that the reality of how much they're really doing in that way is fairly modest. Right now we're not bothered by that. In the sense that you know they are going through this fundamental transformative phase, and most of the private cloud automation for our management stack today is in this phase where they are going from ITIL, CMDB, trouble ticket dominated environments to self-service automated provisioning catalog environments. And they are so deep into that transition that taking advantage of some of the heterogeneous cloud things is sort of number four on their list and they haven't clicked off number one two and three yet. But that promise is definitely there, and we're seeing an increasing amount of customers taking advantage of it. >> So the second part of my question, and I want you to help me square a circle. So we've heard Joe Tucci in the past talk about the advantages that some of the big hyperscale guys have in homogeneity, and part of VMware strategy over the years has really been to get VMware out into the cloud service provider space. At the same time we live in this heterogeneous world, so how can you achieve that vision, with all that heterogeneity? What is the underlying strategy and technology that enables you to do that? >> Yeah in different layers of the stack, you need to do different things. And for instance at the lowest layer, cross cloud VMotion, that's going to be homogeneous for quite a while, right? (laughs) Just is, right and there's lots of things in terms of copying page tables, synchronizing page tables. Fail forward, fail back environments. >> You've got your best people working on it, but. >> Yeah. >> It's not trivial. >> And yeah right and that kind of stuff. But at higher levels of the stack, depositing work loads, observing work loads, getting telemetry on work loads, okay there you can be highly heterogeneous, so really I'd say the higher you are in the stack, the more heterogeneous you can be. Right the lower you go in stack, you know to deliver a value proposition, right you know it's exciting the customers, the more homogeneous you tend to be. And obviously technologies tend to sediment down over time. So our commitment is you know, a broader and broader set of cloud capabilities across other party clouds, and of course we want to enable as many of our partner clouds as well, and those technologies. I mean one of my most exciting products NSX, right you know one of the fastest growing segments, is into service providers who are running that as part of their cloud as well. So that's going to build some of those hybrid networking capabilities into non-VMware hosted cloud environments as well. >> You talked in your keynote about your Cinderella career. Is VMware your glass slipper? >> Is it my-- >> Is it your glass slipper? (all laugh) >> Well you know I'm loving what I'm doing right now. It's a great place to be in the industry. I don't expect to go anywhere else, so you know at this point in time I'd say yep sure is. >> Well so you were asked yesterday on CNBC, you know they want to know about how you touch consumers, and you gave some very good examples of ways that you power companies that power consumers. You also gave some internet of things, I would call internet of things examples, you said, "There are 7,200 objects orbiting the earth." And IT in your bloodstream were two, sort of two examples that you gave, so you upleveled your keynote this morning. Wondered if you could talk about VMware's role in powering things like the internet of things, and things like consumer technologies. >> Yeah you know one of the, maybe my favorite examples right now on some of the internet of things that we're doing, one is a medical devices. You know heart monitors, you know being able to pain medication injection devices and so on. It's ends, you know the next generation of those is going to be managed through a cell phone. Right you know so you'll be able to go to your cell phone, you click oh, my pacemaker kicked me three times last night, right kind of things. But those devices need to be managed and secured. So how's the next generation going to be done? The leveraging, air watch and our horizon suite. We're going to be doing that kind of capability. Right and those things are just, you know I mean we're talking about people's lives, and changing the lives, but then it's also about the telemetry that goes on the other end. You know my wife has a heart monitor in right now. Just, and you how painful it is to get access to that data? Right you know. >> It's my heart. >> Yeah and you know why is it so hard. It's going to be hosted in the cloud, and we're building those clouds for those environments and to me, some of those applications, you know it's not just about going to an IT guy and let me tell you how you can save a bunch of money. You know let me go to that IT guy and say let's go partner into your line of business and say how can we change your business? Right and that's really where I try to end this morning's speech is very much, right that is the role that everybody at VMworld gets to play. You're the smartest tech guys. Go be the evangelists, the entrepreneurs, inside of your business. Because you are the person who's going to enable them to take advantage of these core trends to change their business. >> Yeah one thing on that point is that people looking at, we talked to some, a lot of customers and CIOs, and they're looking at the different vendors. Oracle, you know they're looking at VMware, wherever, IBM, HP and everyone else. But the trend that we're seeing is kind of pivoting off the appliance and engineered systems concept and end to end, you mentioned homogeneity and heterogeneous at the top of the stack. They want an end to end solution. They want it to work so it can kind of outcomes you described. In order to have that they need developers, and you guys have an ecosystem that has a big focus on dev ops. So very geeky company, a lot of engineering at VMware. A lot of people know what dev ops is. Is that servicing up at the top of the senior management team where dev ops is top priority? The API-ification, these kinds of things. Can you share some of the mindset and some of the conversations you're having at the senior level with dev ops and developers. >> Yeah I find the conversation, by the way I'd be very interested in your guys' perspective on this. You know with one of the recent dev ops conferences recently that we had a team go and attend, and we're presenting some of our products and value propositions there, and a survey was done of how many of those were IT folks versus how many of those were developers. And what was the answer? >> Ops dev. >> It was almost all IT folk. >> It's, yeah. >> Operations guys. >> Right because do developers really want to carry pagers at midnight? Right you know it's. You know, no. Right you know and there's this funny-- >> No they're too busy writing code. >> Exactly, right. >> They write code at night. >> And so there's this aspect of hey, they want programmable infrastructure, right because they don't want some long, trouble ticket kind of model to go get infrastructure, so they want API access that's automated, self provisioned and so on. But do they really want to take over infrastructure operations? And that the answer to that is no freakin' way. >> Yeah, no way. >> At that point of way. >> Because they you know, so it's very much they don't want to be bottlenecked right, they want to be enabled by infrastructure right for it. And so a lot of this dev ops is how do we bring those two worlds together so the developers can go do what they want to do, right develop, innovate, and at the pace of that that they are never limited by any of the infrastructure deployment or lifecycle management capacities. So as we're having those conversations, it's very much how can we present more and more API access to a more, and more automated set of our products. And that's why we've embraced openstack. That's why we've embraced containers. It's why we've done the cloud foundry. Right it's why we continue to have our own traditional vsim interfaces that we've supported forever. We're just going to give them more API surface area than any other guy on the planet, and the next thing that comes up, right if the Volante development environment emerges, hey we're going to support that. If they get more than 10 developers on it, we'll be there. >> Right, CrowdChat. >> You support CrowdChat APIs, so I got to ask, the development's a good point, I love that point, because IT is where your wheelhouse is. Certainly in the ops side of VMware's install base. But now you bring up the developer community, those guys have embraced containers. That's changed the game a lot, because now you can abstract away the complexity you guys can provide, and kind of harden that top. So how do you see that market? So two questions. Containers, comment on the containers. We asked that last year. And where's the line on the hardened top? Where's the line where developers, hey don't look here you're cool, programmable interface whatever you want to call it, infrastructurous code, where's the line on the stack? And then develop this new developer ecosystem that's developing? >> And I think as I said last year when I was on the CUBE that you know we see the container trend as a more significant, a long term one even than openstack. Right and I think it really does become the biggest issue in the future for developers because it's an application value proposition right and at that level, how can I make application development, deployment, lifecycle management in a more effective and productive way. And software does eat the world, and everybody needs to become more productive in their application experience. And then the hardened top question. You know it's a great question because developers, do they want to reach, I mean do they want to go worry about infrastructure? No they don't, but they don't want to be hindered by infrastructure right at that level, so the question is can we present in a light way, open way that they can take care and not worry about oh how do I get enough storage for this. How do I secure that network, how do I connect to this other thing, what is my directory service. We're trying to present an infrastructure that gives them the surface area that they require, so that they don't need to go down the stack. Because they're not going down the stack because they want to but because there isn't a flexible, easy way for them to get there another way. >> To them it's just like smashing rocks, I mean they don't want to do that. They want to program some code. >> That's right you know. They want application code, interface code, you know things that create business value. So our job is to present them a capability that makes those things easy. And that's what the Photon platform announcement was all about, making it easy. Making it easy for traditional IT. >> NSX is playing a role there, too, big time. >> Oh yeah absolutely. NSX you know we're doing the bindings in the storage layers. We're absolutely bundling in the right way so that IT gets visibility into that environment so they can manage and secure it, you know deploy it, but the developers get the flexible interfaces that they like as well and really, sort of, if you remember the old Oklahoma movie, can the cowboys and the farmers be friends? Right you know and that's our objective is to bring those two worlds together. >> So I got to bring up the cloud native question, because we're seeing this transition now to, Dave and I were talking in theCUBE on the intro here about the old mini computer trend and how that spawned a whole level, you know you had Sun, HP, back, and Intel writing chips and this x86 servers. The whole SAP, workflow, ERP systems, manufacturing got innovated, all this new automation happened. So we're seeing cloud native take on a similar role there where you're seeing people at the services level, the big consulting firms want to deploy more apps fast. And you mentioned the apps are taking over Hollywood. So where do you see the pressure point for the services-- >> Bird Man or Angry Bird, I don't know. >> So that trend's happening right now. So what's the pressure, what's holding back that explosion of new services that are going to roll out, consulting services, big firms rolling out apps for banks and every vertical, as you said they're being disrupted. What in the infrastructure is holding back that? >> You know I think that, and part of the reason we're so excited about some of the Photon announcements in that sense is because it is too hard and too slow today. You know at the, it's heavy, complicated. Right the IT processes aren't nimble, and you know self service environments are minimally deployed. Right you got the application guys over here, hey they're innovating at pace, and these scale outs, container oriented microservices architectures that are beginning to, they're not scalable, they're not manageable, they're not secure. Right so the problems are so obvious on both sides of it. Right but it's these worlds are coming together, some of the early embodiments you know of the new applications et cetera are so thrilling that people are really are moving into the space. So the fundamental limiters right we think are, you know an agile, light weight infrastructure with the right set of northbounds APIs that give programmatic access to the infrastructure. And on the other end is a developer environment that can take advantage of those, that's highly productive with the level of software skills. I think ultimately you know on that side of things, you're going to be developing, you're going to be limited by software development capacity. And that's what we are finding when we meet, and particular Pivotal meets with the largest companies in the world right their biggest issue is, do I have the software development skills to do that? Can I be productive at that level? You know the app is now more important than the color and the warrantee on the car. You know that's the shift that's occurring. >> Pat I want to ask you a couple public policy questions. I don't want to get into politics, but as a CEO in Silicon Valley, you know you hear folks like Donald Trump sort of saying well we should really clamp down, he goes after Zuckerberg for example. >> Build that wall. >> Right build a wall. But he goes after Zuckerberg in particular. I'm talking about H1b visas so. What's your take I mean presumably, you want more talent, we educate talent, what do you say as a CEO of a public company regarding educating and then keeping folks here? >> I think it's wonderful that the world wants to export our top talent, their top talent, to the United States right. And almost-- >> Right, thank you. >> I mean please. >> Where's your best. >> Absolutely. >> And smartest people. >> And the fact that we want to close our doors to the most talented human beings on the planet that want to come and work, develop, create the next generation of startups in our, right in our communities and on our soil, right to me that's a stupid policy. >> Yeah great, and then the second question. You mentioned self driving cars. I wanted to ask you about, you know for decades, millennia, we've seen machines replace humans. And we're seeing now that GDP grows, you know income grows, but the average, median income has dropped from $55,000 down to say $50,000. From '99 til today. Yet you guys and I'll be interested in you, too John. You live out in Silicon Valley. And it's like okay well there's always opportunities. Because you guys live in a virtual reality field, and you're positive thinkers right. So are you concerned as again a CEO of a public company, and somebody who's pretty prominent, about that effect and what's the answer? Is it more education, and what can companies like VMware do to support that? Not that trend, but to reverse that trend? >> You know at the heart you know you mentioned education, to me that's so right, you know so foundational at that level and increasing you know STEM education, beginning at the earliest ages, you know we need more software programmers. We need more women in software programming in particular. I mean we have almost half the population is excluded from that potential right today by the very low entry rates into those areas. We got to fix those issues. The quality of U.S. education at the secondary level, you know at the collegiate and university level's unmatched on the planet, right. You know at the high school and junior high level it's pretty weak on a world scale. Those things are fundamental, got to be fixed in that respect. I also believe that you know many of these technology shifts are actually going to enable a, let's say a renaissance of some of the communities that some of the areas that have been not available for American workers and this whole idea of, I'll say just briefly mention in my speech this morning, the idea of customized, automated manufacturing. Well as that emerges you know now, right if I can have highly automated, customized manufacturing, you know 3D printing, et cetera that occurs, boy you know I believe we will see a resurgence of some of the manufacturing sectors you know back onto mature market, to soils, to back onto American soil as well. Because it isn't just going to be a cost arbitrage question anymore to find the lowest cost labor on the planet. Transportation costs become you know, essentially a barrier to export. >> And you're unlocking like, see big data as an example. You're unlocking new jobs around data analysis, and development. >> Right. >> You know that's very much what we see as one of the huge opportunities associated with internet connectivity in a global basis, whether it's health care, education, or unlocking new jobs-- >> Internet of things. >> I mean machines like airplanes, throwing off data, they're going to need people to analyze that. So I got to ask the question along with Dave, is that you know when I was talking with some young college kids and my wife and I talked to our two youngest, who are, one's in eighth grade, and one's a freshman in high school, around how to think about technologies. Not just oh you need to be computer science and have two daughters, so obviously we're talking to them about hey don't be bullied out of computer science. If you love technology there's plenty of things. So what's your take on that? What's your view on different opportunities for young people? Women, boys, girls. All across the board. It used to be just programming, electrical engineering, computer science. And now it's kind of like the two pillars. But now what new opportunities do you see to a young physics major, or someone in high school who just loves technology? Because they're all connected. They're all on Instagram, they're doing their thing. >> Uh-huh. >> They're breathing technology, they're natives. >> Yeah. >> So what academic, what things might inspire young people? >> Yeah I think some of-- (coughs) Excuse me. You know some of it is taking down some of those, I'll say false barriers or perceptions as well, and John Hennessy, president of Stanford, you know he and I have a great relationship, and Stanford now is almost 50/50 in the incoming class for women into computer science. I mean obviously they put huge emphasis on that, and so they said you know getting away from first player shooter games as the first touchpoint of technology and into much more social experiences has changed the perception, right, of you know females into that sector. Excuse me. You know I've still got two more days of VMWorld to go. I need a voice. >> The CUBE is tiring. >> We might outlast you this time. You beat us last time, 34 minutes that was a record. >> I think it was longer. >> It was more like 50 minutes. >> Yeah, right at that-- >> But there's a lot of >> opportunities to your point. I mean there's not just programming. There's a lot of interdisciplinary stuff now. >> Yeah and that was exactly the next point I was going to make. Because computer science and programming ends up being cool in every aspect. Right you know whether you're in economics. Hey you know I mean you got to build models. Hey if you're in the medical field. Hey there's an increasing amount of telemetry, big data, other things coming into it. Every field is touching on it, and to me that cross disciplinary view of the impact of technology, into every segment and every interest, becomes more and more powerful going forward. And I think some of those are the ways that we can actually change the perception even right that everybody, it's sort of like, imagine if you would go to school, and you would say our school does not teach math. I mean would you send your kid to that school? Of course not. >> Only if they had programming on top, instead of math. >> Right but... And they say, but you know your daughter, she wants to be a psychologist. But you're not going to teach her math? You know it's a basic life skill. She got to learn math. That is the essential of technology and computer science going forward. It is a basic life skill that we have to teach everybody, and have to participate in it regardless of what field that may pursue. >> So we're getting crunched on time here. I want to ask you my final question. Dave probably may have a final, final question. Seems to be the new thing going on here at the CUBE. This year at Vmworld, what do you think will happen this week when you look back down the road? You've got a great career here. Looking great with VMware, we love working with you on the CUBE here and the keynotes. What about this year is so transitional for VMware? Is it the fact that now we have full dev ops, now the cloud is mainstream? Is it the fact that the company's transforming itself into a whole, another power. Is it because the ecosystem, all of the above? What's your take on this year's kind of inflection point for VMware? >> Yeah I think you know obviously at the front of the list for us is this whole unified hybrid cloud. And really getting people to view, because you know three years ago, cloud was ooh I'm an enterprise customer. Now it's really how can I take advantage of these resources that will be heterogeneous across multiple environments and the value proposition that we can be and everybody needs to be doing that. So that's one of the takeaways. You know second is the engagement into the developer community, the Photon announcements are probably the most second, the second most important shift to thinking that we've delivered here. Maybe the third is you know the thing that I'm always thrilled about when I show up at VMworld is the ecosystem. You know friends and foe alike here show up to talk about how they're collaborating together to bring more from the things that we do, and that's what's just so energizing about it. When you go around the show floor it's just overwhelming. >> And you've got investors too after the VCs. Top tier VCs, NEA's here. Graylock, XL, all of them are here. >> Well a lot of startups coming out of the woodworks, too. >> Oh yeah. >> They launch at VMworld. >> Absolutely. >> You know it's just wonderful that way, and this ecosystem effect just couldn't be more powerful, and alive and well than it is here at the show this year. >> And we're six years here, we love watching the transformation. We've seen everyone. Palmer has produced that first slide that was there and now here so great job. >> Yeah and thank you for expanding our space this year. That's really great. >> Hey you know what. >> Us going north. >> You know. >> You said you were in a corner of Moscone North. I mean I said this is the CUBE. (all laugh) I think you mispositioned that. >> We were in the lobby, the big lobby of Moscone North. >> Half the lobby. >> We have the lobby. >> Thanks for everything, we appreciate six years. And great to see you every year, and thanks for taking the time out of your busy schedule to share your insight, >> Oh thank you I love it. and the data, and your vision, and product news. Thanks so much. >> Thank you. >> Pat Kelsinger here live inside theCUBE, here in San Francisco, Moscone North lobby. We got the big lobby here, and of course it's Vmworld 2015. I'm John Furrier with Dave Velante. We'll be right back. (light rock music)

(upbeat music) >> Live from San Francisco, California, it's theCUBE at VMWorld 2014. Brought to you by VMware, Cisco, EMC, HP, and Nutanix. (upbeat music) Now, here are your hosts, John Furrier and Dave Vellante. (upbeat music) >> Welcome back, we're here live in San Francisco for VMWorld 2014, I'm John Furrier with Dave Vellante. This is theCUBE. We expect to sue for the noise, get the tech athletes in from CEOs, entrepreneurs, startups, whoever we can get that has that signa. We have Pat Gelsinger, the CEO of VMware here in the house. Pat, great to see you again, great keynote. >> Hey, thank you. >> You've been a great friend of theCUBE, five years now running, just want to put a plug in. >> Five years? Wow. >> I want to thank you for this amazing gift of pens we got from the VMware Opening Campus Day. Great pens, celebrating you guys opening up, officially, the Palo Alto campus, how's that going? What's happening with the campus? >> Well first, the campus opening was great, thank you for joining us there for it. It really is just a fabulous place. I mean, a beautiful campus, and we have the greatest employees, so we wanted to give them the greatest place to work. The campus has gone fabulous, we've opened up almost all the buildings now on campus. Just two more to build out, and we're hosting all sorts of wonderful people who want to come in and see the coolest place in Silicon Valley now. >> It's like China over there. New cranes going up, and putting new buildings up there. Are you guys done with construction there? What's happening? You guys are expanding like crazy. >> Two more buildings to go. >> (laughs) Two more buildings to go. >> Then we're done for a while, so (laughs) almost there, almost there. I got worried when there's so many cranes going around. Do I need all my employees to wear hardhats or something? It's like, no, we're soon done with that, and we can get everybody to work. >> Robin kicked off the keynote before you came on, she talked about staying the course, and use a computing hybrid cloud server to find data, so then you came out and laid out, essentially, the vision of this transformation that's happening. What's the state of your vision there? Expand on that keynote, and share with the folks who might not have caught it live. What was the crux of the presentation? 'Cause it had a lot of Pat Gelsinger vision, it felt like it's transformative. We've even had some guests on talking about commentary, the announcements. Are they playing defense, offense? You're not a defensive player. You're an offensive player. So talk about the offensive moves for VMware, and how that keynote struck a chord there. >> The first one really started with this phrase, "brave, new IT," and the nexus of that was all of our VMware faithful. The V admins, the people who've been using this. They are becoming critically important to the businesses that they serve going forward because not only is it about them doing their job, but with SDDC, Hybrid Cloud, end-user computing, it's them redefining the entire infrastructure for the business. And when the CEO looks down, across his leadership team, who's the most competent person there to navigate through all of these IT trends that are merging to, necessarily, redefine their businesses? And we call this liquid business that's changing. So very quickly, we're seeing that businesses redefine themselves from education, to government, to transportation. Uber, today, not owning any assets, has a market cap equal to that of Hertz and Avis combined. We're just seeing these things emerge so quickly. And who's the smartest guy in technology in the room? The IT guy. Out of that, we laid out, obviously, our continuing progression with the Software-Defined Data Center, updates on major projects, bringing those components together in a big way. One of our first, and I think, most significant announcements today, was a lot of the choice announcements. We are adding an OpenStack distribution, so if you're a vCloud user, I'm going to have the programmatic ability of infrastructure through the OpenStack API's, you now get it with VMware. We also announced an embrace of containers. Containers, this 20-year overnight success where all of a sudden, lots of discussions around containers, and how can I use containers as a new app delivery model? Well, the best way to deliver apps for an enterprise, on top of the VMware infrastructure. So we announced a relationship with Google and Kubernetes, with Docker, one of the leaders in that space early, and how we're going to make them containers without compromise in the data center for enterprise customers. >> On the container piece, last year, we asked you, here, on theCUBE, about Docker and containers. You were like, oh, containers have been around for a while. What made you go, hey, this Docker thing's got legs? Was it the community thing? Part of the Open Source tie-in? Was it the interoperability? Containers is not a new concept, as you had pointed out, but what's changed for you and VMware over the past year to make that happen? >> And it still is very early. Let's be clear, John, that we're very much in this early, nascent phase, right in the hype cycle curve, you know. We're way up, we're probably going to go through the valley of despair in this technology, but very quickly, there's a broad set of these third gen developers that are saying containers is a cool way for me to package, deliver, and manage app deployment over time. We're saying if that is how people want to be able to deliver apps, then we, the preferred infrastructure for delivering apps, we're going to embrace and enable that, as well. So very quickly, it came together, and we engaged with Docker and Google as partners, and they said absolutely, we want to partner with you in this space, so all of the pieces just snapped together overnight. We've been working with them, making meaningful contributions in the space. >> That's a DevOps ethos, right? That's basically a cloud, right? >> DevOps is a funny term. It's funny, I had a bunch of my guys at the DevOps conference here, you know who was there? It was all IT guys, not developers. It's really a progression of developers to DevOps into IT, and we really say that DevOps is where developers and IT come together. We really are trying to enable DevOps to satisfy the business guys. In fact, go back to my brave theme. You're seeing Shadow IT, and developer, and line-of-business go around IT, and IT is now being through announcements, like today, armed with the tools to go to developers and say, oh no, I'm your friend. >> Step out of the shadows. >> I'm going to enable you with the coolest, most efficient infrastructure, and I'm still going to have it secure and managed, as well. You don't need to be running in these environments that we can't scale, manage, and secure. Your apps, now, can operate in an enterprise-worthy way. >> That right once run anywhere concept is very powerful, is the premise, if I understand it correctly, that you'll bring that enterprise capability, the security, and other management capabilities to that concept? >> Yeah, the VM doesn't change. We're adding Docker on top of the VM, and enabling it with some cool, new technologies, like I mentioned, Project Fargo, that actually make that delivery of the container on the VM more efficient and lighter-weight, than a bare, metal, Linux implementation of Docker. That's really powerful, it's really cool that we can do that, and we have some cool technologies that we're showing off that enable that, and will be part of our next major vSphere release. >> So you touched that base, you touched the OpenStack, you got some action going on there, and sort of, embracing, OpenStack. More developers in OpenStack. VMware has a touch act to follow when you think about the whole where we've come from. It seems so simple now. Servers underutilized, you had a 10x disruptive factor. Now, you've got to do it again. I remember Moretz used to talk about this deeper business integration. He'd talk about it like this was grand vision, but you actually, now, have been executing on that. Is that where the next wave comes from? That deeper business integration? You talked about transforming infrastructure, so how do you do it again? Is it a cost reduction, is it a business integration, is it, as you say, transforming that infrastructure? What does that mean to the customer from an operational standpoint? >> If you're the IT guy, do you want to spend a lot of your time worrying about the infrastructure? Actually, what you want to do, is have this programmable, scalable, flexible infrastructure that enables you to go worry about the business problems, which are in the apps. Because you want the IT guy spending all of his time, and most people say, how can I do new application services? How can I enable new business models, et cetera. So he wants this flexible, programmable, secure, managed infrastructure, and he wants to worry less and less about it. E.g., it needs to become more automated, more efficient, more scalable. And we walk into that discussion, say, you know, we've earned the right, CIO, because we've demonstrated more value, more efficiency, more quality of software, and we now have 80 percent of the world's applications running on top of the software that we do enlist for you. We've earned the right to show that we can do that for the full data center. To be able to do that both on and off premise, in a reliable, scalable, managed, and secure fashion, so that we enable you, Mr. IT, to go deliver the environment for the developer. To deliver the environment on or off premise, to secure all those next generation devices and applications, as well. And that's what we're off to do for you, and we deserve a seat at your table to help you do that. >> The Federation helps you with that seat, although, you guys got a pretty big role in the Federation. >> Yeah, yeah, we do. >> I wanted to ask you about the financial analyst meeting, did you get a lot of questions about that? About the whole spin-out thing, and how was that addressed? >> Actually, surprisingly-- >> Didn't come up? >> Not a question. >> 'Cause it's already come up. >> We've talked about it before. Largely, EMC is addressing those things. We've been very proactive in our position. We think the Federation is the right model. It's working, it's delivering value, we're quite committed to it, and we're showing quite a number of cases where we're adding value, as a result of it this week. We announced EMC as one of our EVO:RAIL partners. We announced the ViPR-based object service for the vCloud Air service, that we announced this week. Announcing new solutions that we're doing with them, so lots of different areas that we're just demonstrating the value that comes from the Federation. >> Well, we know Joe a little bit, we know that's not going to happen anytime soon. So what kinds of things did come up? Were they nitty gritty things around enterprise license agreements, 2015 guidance, share with us what you guys-- >> Lots of questions around 2015. >> And you guys shared a little bit more, maybe, than in the last-- >> We gave them framework to go look at 2015, lots of questions about the strategies that we've laid out. How well this NSX thing play out? How rapidly is that going to grow? vSAN, how rapidly are you seeing that grow, as well? vCloud Air, how are you going to win in that business, and do it in a margined, effective way for VMware? And how does this vCloud Air network partnership work? Based on that, how should we look at your growth profile going forward, with your traditional business, as well as these new business areas, and what's that going to look like over 15 and beyond? So those are sort of the nature of the questions. >> The Air piece is interesting to John and me because we've been trying to parse through, on a long-term basis, you guys are software everything, you talked about that, at quite some length, and the business model's great. Marginal economics, go to zero. You see some of that happening with the public cloud. The traditional outsourcing is starting to fall, that software marginal economics line. My question relates specifically to how your, whatever it is, 4,000 partners, can you replicate that kind of marginal economics at volume, or is it more of a high touch belly-to-belly model? >> We definitely are viewing this as the potential for a very scalable model, working with service providers who invest substantial capital, who have data centers, who have networks, have unique, governed assets in their own countries that they participate in, as well. We're building the stack, being prescriptive in the hardware, building the software layer that we need to go with it, so that we can operationalize the seven by 24 service that scales, and do so with this hybrid model. Not be over here in the race to the bottom, with Amazon's and Google's, we're over here focused on enterprise customers to deliver value of how these things work across the boundary of on and off premise, the Hybrid Cloud, and enable which enterprise-class services on top of the platform. We're going to do so with what we do, we're going to leverage partnerships, like Savvis, CenturyLink, like the SoftBank partnership, and we're going to enable those 3,900 partners with additional service offerings, as well. It's a very effective business model. >> But you will build out your own data centers, or... >> No, we're not building our own concrete, air conditioning, and networks, we're doing Colo for the core vCloud Air offerings for those, but we're enabling our partners to do that, as well. Here are the recipes, you go build it, and operate it, as well. >> So that's a technology transfer, IP transfer? >> For that, we get a recurring revenue stream as they go run our software in their data centers and services. The combination of the two, we think, gives us a very effective business model for the future. >> Pat, last year, I asked you about the, you announced the Hybrid Cloud, all in. I made a comment, kind of off the cuff, that's a halfway house, got you agitated. Halfway house? (laughs) And you said no, it's the final destination. I took a lot of heat for that, I fall on my sword, I'll eat my own words there, but it turns out absolutely correct, right? That's absolutely the destination. That is the number one conversation, it's Hybrid Cloud, certainly on-prem, off-premise, new economics, value creation. I got to ask you, and the question from Twitter has come in, along the same lines, is ask Pat about moving up the Stack. And I also want to hear about the end-user piece, but inside the Hybrid Cloud destination, what is the VMware vision of moving up the Stack mean, and what does that mean to you? >> Anybody who lays out a strategy, to me, it's more important to answer what you're not doing, than what you are doing. For us, we're not doing hardware, making that clear, we're enabling hardware partners. We're not doing consumer, we're focused on the enterprise customer, and we're not doing apps. We are enabling more services, enterprise services, like DR-as-a-Service, Desktop-as-a-Service, but we're not going into the app space. That's the line that we're trying to draw. Everything that's an enterprise-class service, where people need enterprise capabilities, an identity, a DR, storage capabilities, things that really are common services for apps to utilize, that's what we're doing, but that's as far north, or far up the Stack that we'll go. >> I asked Steve Herod on our Crowd Chat pregame on Friday, what the hot opportunities are for startups, he said security, or mainly, not getting caught at this perimeter-base security. What's your view on that? >> The hard, crusty exterior, and the soft, gooey inside is how I described it this morning. My morning breakfast everyday, and with it, this whole idea of micro-segmentation, NSX, really redefines how you build networks, and that's going to allow us to re-factor every aspect of security, every aspect of routing, and load balancing, et cetera. We announced the five partnership. The Palo Alto Networks partnership is really enabling us to execute on the micro-segmentation use case. It's transformational about how services and networks are operated inside of data centers, and we have the poll position here with the NSX platform. >> One of the most common question we're getting from the crowd, is when are you going to get a Twitter handle? (groans) (laughs) >> I've never been a good social guy. (talking over each other) >> We'll show you the engagement container-- >> Thank you, you can help me out with that. That'll be good, thanks. I appreciate it. (laughs) >> On end-user computing, let's go to the part because Sanjay is onboard, the acquisition, give us the update, what's coming through that? >> What a team. Sanjay has been a great leader, we brought together a great leadership team, Sumit and John Marshall. Their passionate and aggressive in that space. The combination of the new assets, the AirWatch team, Revitalization of Horizon, DaaS as a service on the platform, we just announced Cloud Volumes. It's a very cool, dynamic app capability, so overall, really coming together. Momentum increasing in the marketplace, Sanjay's done a really fine job at driving us in that area. What a difference a year makes. >> Pat, I wish we had 34 minutes, which was your record on theCUBE-- >> We're just getting started, John. (laughter drowns out speaker) >> We appreciate your time, but I want to give you the final word, and we talked about this briefly earlier, everyone always wants to ask, is this a defensive move, what's the strategy? I've never seen you as a defensive player. In all the interviews we've done, knowing your history, you're an offensive player. You talked about, years ago, get out in front of that next wave, or you'll be driftwood. I don't see that defensive. What is the VMware offense? If you could describe the offense for VMware, as a company. And answer the question, offense, defense? Are you making defensive moves, or am I off-base by categorizing it offense? >> I think we're absolutely playing offense. If you think about it, we're transforming networking, we're transforming the entire data center operation, we're delivering the first, truly hybrid cloud, enabling secure, managed environments on those devices. Unquestionably, overall, we are playing offense. Now, some things I think we should've done sooner. We should've been in the public cloud space earlier, and we're having to catch up in that space. The moves that we've taken in OpenStack, I think they're pretty well-timed. The moves that we're taking in containers, I think we are way ahead of anybody else, in terms of delivering enterprise container environments, in that respect. >> M&A activity looking good right now? (laughs) >> I just announced one last week, I got more in the pipeline, we're never finished. Organic innovation, inorganic innovation, we're playing both, and we're absolutely playing offense 'cause here, we're playing to win because our customers want the very disruptive nature of the products that we deliver with the quality, the brand of VMware. That's what they want from us. >> And more open source is part of that playbook? >> Yeah, absolutely. >> Seeing that grow? >> Absolutely, we will use open source every place that we can to accelerate the offerings that we bring to our customers. We don't mind fundamentally changing our business model, but we can add open source components to it, and we will, and today's OpenStack announcement is a great demonstration of that. >> Pat, put the bumper sticker on this to end the segment. What's the bumper sticker say for this year's VMWorld? What's on the bumper right now? What's it say for VMWorld-- >> Enabling brave, new IT. >> Pat Gelsinger, CEO of VMware here, inside theCUBE. Always great to have him. Our fifth year, we love having him on. Great tech athlete. This is theCUBE, be right back after a short break. (dull dinging)

(upbeat music) >> Hey welcome back to VMWorld 2013. This is theCUBE, flagship program. We go out to the events to extract the signal from the noise. I'm John Furrier, the founder of SiliconANGLE. I'm joined with David Vilante, my co-host from Wikibon.org and we're kicking off today with an awesome interview. CEO of VMWare, Pat Gelsinger, CUBE Alumni. Been on the theCUBE with Dave and I multiple times. So many times. You are in like the leaderboards. So in terms of overall guest frequency, you've been up there, but also you're also the top dog at VMWare and great to see you again. How are you feeling? >> Thank you, thank you. Good morning, guys. >> Pleasure. >> Good to see you. >> So what's new? I mean obviously you're running the show here. You're running around. Last night you were at the NetApp event. You ran through CIO, R&D. You got to go out and touch all the bases out here. >> Yeah, yeah. >> What does that look like? What have you done and obviously, you did, the key note was awesome. What else is going on? >> You know, everything, you know, VMWorld is just, it's just overwhelming, right? I mean 23,000 people almost. I mean you know the amount of activities around that and it really has become the infrastructure event for the industry and you know, if you're anything related to infrastructure, right, what's going on, right in the enterprise side of IT, you got to be here, right? And there's parties everywhere. Every vendor has their events. Every you know, different particular technology area, a bunch of the things that we're doing, and of course to me, it's just delightful that I can go touch as many people and you know, they get excited to see the CEO. I have no idea why, but hey I get to show up. It's good. >> You've been in the industry for a long time. Obviously you've seen all the movies before and we've talked about the seas of change in the EMC world when you were there, but we had two guests on yesterday that were notable. Steve Herrod who's now a venture capitalist at Generalcatalyst and Jerry Chen who's a VC at Graylock, and we have a 10-year run here at VMWare which is esteemed by convention, but the first five years were a lot different than the last five years, and certainly, the last year you were at the helm. So what's changed in the past 24 months? A lot of stuff has certainly evolved, right? So the Nicira acquisition certainly changed up, changed everything, right? You saw software-defined data center now come into focus this year, but really, just about less than 24 months, a massive kind of change. What, how do you view all that? How do you talk to your employees and the customers about that change? >> Well you know, as we think about the software-defined data center vision, right, it is a broad comprehensive powerful vision for rearchitecting how the data center is operated, how customers take advantage of it. You know and the results and the agility and efficiency that comes from that. And obviously the Nicira acquisition is sort of the shot heard 'round the world as the really, "Okay, these guys are really serious "about making that happen." And it changes every aspect of the data center in that regard. You know and this year's VMWorld is really, I'll say, putting the beef on the bones, right? We talked about the vision, we talked about each of the four legs of it: compute, networking, storage and management of automation. So this year it's really putting the beef on the bones and the NSX announcement, putting substance behind it. The vSAN announcement, putting substance behind it. The continuing progress of management and automation. And I think everything that we've seen here in the customer conversations, the ecosystem of partner conversations are SDDC is real. Now get started. >> Can you, I think you've had some fundamental assumptions in that scenario, particularly around x86 in the service business. Essentially if I understand it, you've said that x86 will dominate that space. You're expecting status quo in the sense that it will continue to go in the cadence of you know, cores and Moore's Law curve even though we know that's changing. But that essentially will stay as is and it's the other parts, the networking and the storage piece that you're really, where you define conventions. Is that right? >> Yeah certainly we expect a continuing momentum by the x86 by Intel in that space, but as you go think about software-defined everything in the data center really is taking the power of that same core engine and applying it to these other areas because when we say software-defined networking, right, you need a very high packet flow capability and that's running a software on x86. We need to talk about data services running in software, right? You need high performance. It's snapshots, file systems, etc. running on software, no longer bound to you know physical array. So it really is taking that same power, that same formula right, and applying it to the rest of the elements of the data center and yeah, we're betting big right, that that engine will continue and that we'll be successful in being able to deliver that value in this software layer running on that core powerful Silicon engine. >> So Pat, so obviously when you came on board, the first thing you did was say, "Hey, the pricing. "I want to change some things." Hyper-Visor's always been kind of this debate. Everyone always debates about what to do with Hyper-Visor. But still, virtualization's still the enabling technology so you know, you kind of had this point where the ball's moving down the field and all of a sudden, in 2012, it changed significantly, and that was a lot in part with your vision with infrastructure. As infrastructure gets commoditized, what is going to change in the IT infrastructure and for service providers, and the value chains that's going to be disrupted? Obviously economics are changing. What specifically is virtualization going to do next with software defined that's going to be enabling that technology? >> Yeah, you know and I, you know, we're not out to commoditize. We're out to enable innovation. We're out to enable agility, right, and then the course of that, it changes what you expect and what the underlying hardware does. But you know, it's enabling that ecosystem of innovation is what we're about and customers to get value from that and as you go look at these new areas, "Hey, you know, we're changing how you do networking." Right, all of a sudden, we're going to create a virtual network overlay that has all of these services associated with it that are proficient just like VMs in seconds. We're creating a new layer of how storage is going to be enabled. You know, this policy-driven capability. Taking those capabilities that before were tightly bound to hardware, delivering it through the software layer, enabling this new magnificent level of automation and yesterday's demo with Carl. I mean Carl does a great CTO impersonation, doesn't he? And he's getting some celebrity action. He's like, "I got the bottle." >> Oh yeah. >> Steve Herrod gave him a thumbs up too. >> Yes, yeah Steve gave him a good job. But you know, so all of those pieces coming together, right, is you know, really, and you know, just the customer and the ecosystem response here at the show has been, "Oh, you know, right, "SDDC, it's not some crazy thing out there in the future. "This is something I can start realizing value for now." >> Well it's coming into focus. It's not 100% clear for a lot of the customers because they're still getting into the cloud and the hybrid cloud, I call it the halfway house to kind of a fully evolved IT environment, but you know. How do you define? >> No it is the endgame. Hyper cloud is not a halfway house. What are you talking about? What are you talking about? >> To to full all-utility computing. That is ultimately what we're saying. >> Halfway house? >> I don't mean it that way. (group laughs) >> Help me. >> Okay next question. >> (chuckles) When you're in a hole, stop digging, buddy. >> So how do you define the total adjusted mark at 50 billion that Carl talked about? >> Yeah you know, as we looked at that, we said across the three things, right that we said, software-defined data center, 28 billion dollars; hyper cloud, 14 billion; eight billion for the end-user computing; that's just 50 billion opportunity. But even there, I think that dramatically understates the market opportunity. IT overall is $1.7 trillion, right? The communications, the services, outsourcing, etc. And actually the piece that we're talking about is really the underpinnings for a much larger set of impact in the part of what applications are going to be developed, how services are delivered, how consumers and businesses are able to take advantage of IT. So yes, that's the $50 billion. We'll give you the math, we'll show you all the details of Gartner's and IDC's to support it. But to us, the vision and the impact that we're out for is far more dramatic than that would even imply. >> Well that's good news because we said to Carl, "It's good that your market cap is bigger than--" (Pat laughs) >> Oh yeah your TAM is bigger than your market cap. Well okay now we-- >> Yeah, that's nice, yeah. Yeah, we're out to fix the market cap. >> Yeah he said, "Now we got to get the 50 billion. So I'm glad to hear there's upside to the TAM. But I wanted to ask you about the ecosystem conversation. When you talk about getting things like you know, software defined network and software defined source, what's the discourse like in ecosystem? For guys like, let's take the storage side. EMC, NetApp last night, they say, "Hey you know, software defined storage. "We really like that, but we want to be in that business." so what, talk about that discussion. >> Yeah, clearly every piece of software defined, whether it's software defined storage, software defined data services, software defined security services or networking, every piece of that has ecosystem implications along the way. But if you go talk to a NetApp or a EMC, they'd say, "You're an appliance vendor." And they would quickly respond and say, "No, our value's in software, "and we happen to deliver it as an appliance." And we'd say, "Great, let's start delivering "the software value as a software appliance "through virtualization and through the software delivery "mechanisms that we're talking about for this new platform." Now each one of them has to adjust their product strategies, their, you know, business strategies to enable those software components, right, independent of their hardware elements for full execution and embodiment into the software-defined data center feature. But for the most part, every one of them is saying, "Yes, now how do we figure out how to get there, "and how do we decompose our value, embody it it in new ways "and how can we enable that in "this new software-defined data center vision?" >> And they've always done that with software companies. I mean certainly Microsoft and Oracle have always grabbed a piece of the storage stack and put it into their own, but it's been very narrow, within their own spaces, and of course, VMWare is running any application anywhere. So it's more of a general purpose platform. >> Absolutely. >> Is it a tricker fit for the ecosystem to figure out where that white space is? >> Absolutely. Every one of them has to figure out their strategy. If you're F5, you know, I was with John McAdam this morning. "Okay, how do I take my value?" And you would very quickly say, "Hey, our value's in software. "We deliver it as mostly as appliances, "but how do we shift, you know, your checkpoint?" Okay, you know, they're already, right, you know, our largest software value or Riverbed, you know, the various software vendors and security as well. Each one of them are having to rethink their strategies and the context of software define. Our customers are saying, "Wow, this is powerful. "The agility and the benefits that I get from it, "they're driving them to go there." >> So what's the key to giving them confidence? Is it transparency? You're sharing roadmaps during integration? >> Yes, yes, yes. >> Anything else? Am I missing anything there? >> You know, also how we work with them and go to market as well. You know, they're expecting from us that, okay, "you know, if this is one of our accounts, "come in and work with us on those accounts as well." So we do have to be transparent. We have to the APIs and enable them to do integration. We have to work with them in terms of enabling their innovation and the context of this platform that we're building. But as we work along the way, we're getting good responses to that. >> Pat, how do you look at the application market? Now with end-user computing, you guys are picking that up. You got Sanjay Poonen coming in and obviously mobile and cloud, we talked about this before on theCUBE, but core IT has always been enabling kind of the infrastructure and then you get what you get from what you have in IT. Now the shift is, application is coming from outside IT. Business units and outside from partners, whether they're resellers. How do you view that tsunami of apps coming in that need infrastructure on demand or horizontally scalable at will? >> Yeah so first point is, yes, right, we do see that, you know, as infrastructure becomes more agile and more self provisioned, right, more aligned to the requirements of applications, we do see that it becomes a tsunami of new applications. We're also working very hard to enable IT to be the friend of the line of business. No longer seen as a barrier, but really seen as a friend, partner enabler of what they're trying to do because many of the, you know, line of businesses have been finding way. You know, how do I get around the slow-moving IT? Well we want to make IT fast-moving and enabling to meet their security, governance, SLA requirements while they're also enabling these powerful new applications to emerge and that to us is what infrastructure is all about for the future is enabling, you know, businesses to move at the speed of business and not have infrastructure being a limiter and as we're doing things, you know, like the big data announcements that we did, enabling infrastructure that's more agility, you see us do more things in the AppDev area over time, and enabling the management tools to integrate more effectively to those environments. Self-service portals that are enabling that and obviously with guys like Sanjay in our mobile initiative, yeah that's a big step up. Don't you like Sanjay? He's a great addition to the team. >> Yeah Sanjay's awesome. He's been great and he has done a lot on the mobile side. Obviously that is something that the end users want. >> That's an interesting way that I put him into that business group first. (group chuckles) >> Well on the Flash side, so under the hood, right? So we look under the hood. You got big data on the dashboard. Everyone's driving this car to the new future of IT. Under the hood, you got Flash. That's changing storage a bit and certainly reconfiguring what a DaaS is and NaaS and SaaS and obviously you talked about vSAN in your key note. What is happening, in your vision, with compute? I mean obviously as you have more and more apps hitting IT, coming in outside core IT but having to be managed by core IT, does that change the computing paradigm? Does it make it more distributed, more software? I mean how do you look at that 'cause that's changing the configuration of say the compute architecture. >> Sure and I mean a couple of things, if you think about the show here that we've done, two of them in particular in this space, one is vSAN, right? A vSAN is creating converged infrastructure that includes storage. Why do you do that? Well now you have storage, you know, apps are about data, right? Apps need data to operate on so now we've created an integrated storage tier that essentially presents an integrated application environment in converged infrastructure. That changes the game. We talked about the Hadoop extension. It changes how you think about these big data applications. Also the Cloud Foundry announcement. Right on/off premise of PaaS layer to uniquely enable applications and as they've done that on the PaaS layer, boy, you don't have to think about the infrastructure requirements to deploy that on or off premise or increasingly as I forecast for the future, hybrid applications, born in the hybrid, not born in the cloud, but born in the hybrid cloud applications that truly put the stuff that belongs on premise on premise, puts the stuff that belongs on the cloud in the cloud, right and enables them to fundamentally work together in a secure operational manner. >> So the apps are dictating through the infrastructure basically on demand resources, and essentially combine all that. >> Absolutely. Right. The infrastructure says, "Here's the services "that I have already, right, in catalogs "that you can immediately take advantage of, "and if this, you fit inside "of these catalogs, you're done." It's self-provisions from that point on and we've automated the operations and everything to go against that. >> So that concept of "born in the hybrid" is a good one. So obviously that's your sweet spot. You're going from a position. >> Yeah and this stupid halfway house hybrid comment. I mean I've never heard something so idiotic before. >> One person, yeah. (group chuckles) >> I don't know, it was probably an Andreessen comment or something, I don't know. (group chuckles) >> He's done good for himself, Marc Andreessen. >> Google and Amazon are obviously going to have a harder time with that, you know, born in the hybrid. What about Microsoft? They got a good shot at born in the hybrid, don't they? >> Yeah, you know and I think I've said the four companies that I think have a real shot to be you know, very large significant players for public cloud infrastructure services. You know, clearly Amazon, you know Google, they have a large, substantive very creative company. Yeah Microsoft, they have a large position. Azure, what they've done with Hyper-V and ourselves, and I think that those, you know the two that sort of have the natural assets to participate in the hybrid space are us and Microsoft at that level, and obviously you know we think we have lots of advantages versus Microsoft. We think we're miles ahead of them and SDDC, right, we think the seamlessness and the compatibility that we're building with one software stack, not two. It's not Azure and Hyper-V. It is SDDC in the cloud and on premise that that gives us significant advantages and then we're going to build these value rate of services on top of it, you know, as we announced with Desktop as a Service, Cloud Foundry as a Service, DR as a service. We're going to quickly build that stack of capabilities. That just gives substantial value to enterprise customers. >> So I got to ask you, talk about hybrid since you brought it up again. So software defined data center software. So what happens to the data center, the actual physical data center? You mentioned about the museum. I mean what is it going to look like? I mean right now there's still power and cooling. You're going to have utility competing with cloud resources on demand. People are still going to run data centers. >> You're talking about the facility? >> Yeah, the actual facility. I'm still going to have servers. This will be an on premise. Do you see that, how do you see that phasing out to hybrid? What does that look like physically for someone to manage? Just to get power, facility management, all that stuff. >> Yeah and in many ways, I think here, the you know, the cloud guys, Googles and Amazons and Yahoos and Facebooks have actually led the way in doing some pretty creative work. These things become you know, highly standardized, highly modularized, highly scalable, you know, very few number of admins per server ratio. As we go forward, these become very automated factories, right, of cloud execution. Some of those will be on premise. Some of those will be off premise. But for the most part, they'll look the same, right, in how they operate and our vision for software defined data center is that software layer is taking away the complexity, right, of what operates underneath it. You know, they'll be standardized, they'll be modularized. You plug in power, you plug in cooling, you plug in network, right, and these things will operate. >> Basically efficient down to the bone. >> Yeah. >> Fully operated software. >> Yeah and you know, people will decide what they put in their private cloud, you know, based on business requirements. SLAs, you know, privacy requirements, data governance requirements, right? I mean in Europe, got to be on premise in these locations and then they'll say, "Put stuff in the public cloud "that allows me to burst effectively. "Maybe a DR because I don't do that real well. Or these applications that belongs in the cloud, right because it's distributive in nature, but keep the data on premise. You know, and really treat it as a menu of options to optimize the business requirements between capex to opex, regulatory requirements, scale requirements, expertise, mission critical and all of those things then are delivered by a sustainable position. Not some stupid hybrid halfway house. A sustainable position that optimizes against the business requirements that they have. >> Let me take one of those points, SLA. Everybody likes to attack Amazon and its SLAs, but in many regards. >> Yeah, I'm glad I got your attention. >> Yeah, that's good, we're going to come back to that John. (group chuckles) >> In my head right now. >> I don't think we're done with that talk track. (laughs) So it's easy to attack Amazon and SLAs, but in essence, the SLA is, to the degree of risk that you're willing to take and put on paper at scale. So how transparent will you be with your SLAs with the hybrid cloud and you know, will they exceed what Amazon and Google have been willing and HP for that matter have been willing to promise at scale? >> Oh yeah, absolutely. I mean we're going to be transparent. The SLAs will have real teeth associated with them, you know, real business consequences for lack of execution against them. You know, they will be highly transparent. You know, we're going to have true, we're going to measure these things and you know, provide uptime commitments, etc. against them. That's what an enterprise service is expected, right? At the end of the day, that's what enterprises demand, right? When you pick up the phone and need support, you get it, right. And in our, the VMWare support is legendary. I'm just delighted by the support services that we offer and the customer response to those is, "Hey you fixed my problem even when "it wasn't your problem and make it work." And that's what enterprise customers want because that's what they have to turn around and commit back to their businesses against all of the other things as well. You know, regulatory requirements, audit requirements, all of those types of things. That's what being an enterprise provider is all about. >> John wants to get that. Talk about public cloud. (Pat laughs) >> I want to talk about OpenStack because you guys are big behind OpenStack. You talk about it as a market expansion. Internally what are some of the development conversations and sales conversations with customers around OpenStack instead of status, what's it doing, how you guys are looking at that and getting involved? >> Yeah, you know, we've clearly said you know, that you have to think about OpenStack in the proper way. OpenStack is a framework for building clouds, and you know, for people who are wanting to build their own cloud as opposed to get the free package cloud, right, you know, this is our strategy to enable those APIs, to give our components to those customers to help them go build it, right and those customers, largely are service providers, internet providers who have unique scale, integration and other requirements and we're finding that it's a good market expansion opportunity for us to put our components in those areas, contribute to the open source projects where we truly have IP and can differentiate for it like at the Hyper-Visor level, like at the right networking layer and it's actually going pretty well. You know, in our Q2 earnings call, you might recall, you know, I talked about that our business with the public OpenStack customers was growing faster than the rest of our business. That's pretty significant, right, to say, "Wow, if it's growing faster, "that says the strategy is working." Right, and we are seeing a good response there and clearly we want to communicate. We're going to continue that strategy going forward. >> And the installed base of virtualization is obviously impressive and the question I want to ask you is how do you see the evolution of the IT worker? I mean they have the old model, DBA, system admins, and then now you have data science on the big data side so with software defined data center, the virtualization team seems to be the center point for that. What roles do you see changing with hybrid cloud and software defined data center and user computing? >> Well I think sort of the theme of our conference is defy convention. Right and why do we do that? Because we really see that the, you know, the virtual admin and the virtual infrastructure that they have really become the center of IT. Now we need the competence of networking, the security guys, the database guys, but that now has to happen in the context, right, of a virtualized environment. DBA doesn't get to control his unique infrastructure. The Hadoop guy doesn't get his own unique infrastructure. They're all just workloads that run on this virtualized infrastructure that is increasingly adept and adaptable, right, to these different workload areas and that's what we see going forward as we reach into these new areas and the virtual admin, he has to go make best buddies with the networking guy and say, "Let me talk to you about virtual networking "and how we're going to cross between the virtual overlay "domain and the physical domain and how these things "are going to stitch together for making your job better "right, and delivering a better solution "for our line of business and for our customers." >> One thing you did to defy convention is get on stage with Marc Andreessen. So I want to talk about that a little bit. You guys had I would call it, you know, slight disagreements and, into the future. >> Just a little. >> But I thought you were kind to him. And he said, you know, "No startup that I work with "is going to buy any servers." And I thought you were going to add, no never mind. I won't even go there. (group laughs) I won't even go there, I want to be friends. No so talk about that a little bit, that discussion that you had. Your view of the world and Marc's. How do you respond to that statement? Do they grow up into VMWare customers? Is that the obvious answer? >> I mean I have a lot of regard. You know, Marc and I have known each other for probably close to two decades now and you know, we partnered and sparred together for a long time and he's a smart, successful guy and I appreciate his opinions. You know, but he takes a very narrow view, right, of a venture seed fund, right, who is optimizing cashflow, and why would they spend capital on cashflow when they can go get it as a service? That's exactly the right thing for a very early stage startup company to do in most cases, right? Marc driving his customers to do that makes a lot of sense, but at the end of the day, right, if you want to reach into enterprise customers, you got to deliver enterprise services, right? You got to be able to scale these things. You got to be cost-effective at these things and then all the other aspects of governance, SLAs, etc. that we already talked about. So in that view, I think Marc's view is very perspective. >> Also Zynga and those guys, when they grew up on Amazon, they went right to bare metals as soon as they started scale. >> They had to bring it back in right 'cause they needed the SLAs, they needed the cost structures. They wanted to have the controls of some of those applications. >> And rental is more expensive at the end of the day. >> There you go. Somebody's got to pay the margins, right, you know, on top of that, to the providers so you know, I appreciate the perspective, but to me it is very narrow and periconchal to that point of view and I think the industry is much broader and things like policy and regulation are going to take decades, right? Not years, you know, multiple decades for these things to change and roll out to enable us a mostly public cloud world ever, right, and that's why I say I think the hybrid is not a waystation, right? It is the right balance point that gives customers flexibility to meet their business demands across the range of things and Marc and I obviously, we're quite in disagreement over that particular point. >> And John once again, Nick Carr missed the mark. We made a lot of money. >> I think Marc Andreessen wants to put a lot of money into that book. Everyone could be the next Facebook where you you know, you build your own and I think that's not a reality in enterprise. They kind of want to be like Facebook-like applications, but I wanted to ask you about automation. So we talked to a lot of customers here in theCUBE and we all asked them a question. Automation orchestration's at the top of the stack. They all want it, but they all say they have different processes and you really can't have a general purpose software approach. So Dave and I were commenting last night when we got back after the NetApp event was you know, you and Paul Murray were talking in 2010 around this hardened top when you introduced that stack and with infrastructure as a service, is there a hardened top where functionality is more important than which hardware you buy so you can enable some of those service catalogs, some of those agility features in automation because every customer will have a different process to be automated. >> Yeah. >> And how do you do that without human intervention? So where is that hardened top now? I mean is it platform as a service or is it still at the infrastructure as a service model? >> Yeah, I think clearly the line between infrastructure as a service and platform as a service will blur, right, and you know, it's not really clear where you can quite draw that line. Also as we make infrastructure more application aware, right, and have more application development services associated with it, that line will blur even more. So I think it's going to be hard to call, you know, "Here's that simple line associated with it." We'd also argue that in this world that customers, they have heterogeneous tools that they need to work with. Some will have bought in a big way into some of the legacy tools and as much as we're going to try help them move past some of those brittle environments, well that takes a long time as well. I'd also say that you know, it's the age of APIS, not UIs, and for us it's very much to expose our value through programmatic interfaces so customers truly can have the flexibility to integrate those and give them more choice even as we're trying to build a more deeply integrated and automated stack that meets a general set of needs for customers. >> So that begs the question, at the top of the stack where end user computing's going to sit and you're going to advance that piece, what's, what's the to do item for you? What needs to happen there? Is it, on a scale of one to 10, 10 being fully baked out, where is it, what are the white spaces that need to be tweaked either by partners or by VMWare? >> Yeah and I think we're pretty quickly finishing the stack with regard to the traditional PC environments and I think the amount of work to do for the mobile environment is still quite enormous as we go forward and in that, you know, we're excited about Horizon getting some good uptake, a number of partner announcements this week, but there's a lot to be done in that space because people want to be able to secure apps, provision apps, deprovision apps, have secure work spaces, social experiences, a rich range of integrations to the authentication devices associated with it to be able to have applications that are developed in that environment that access this hybrid infrastructure effectively over time, be able to self-compose those applications, put them into enterprise, right, stores and operations, be able to access this big data infrastructure. There's a whole lot of work to be done in that space and I think that'll keep us busy for quite a number of years. >> This is great. We're here with Pat Gelsinger inside theCUBE. We could keep rolling until we get to the hook, but a couple more final questions is the analogy of cloud has always been like the grid, electricity. You kind of hinted to this earlier. I mean is that a fair comparison? The electricity's kind of clean and stable. We have an actual national grid. It doesn't have bad data and hackers coming through it so is that a fair view of cloud to kind of look, talk about plugging electricity in the wall for IT. >> I think that is so trite, right? It came up in the panel we had with Andreessen, Bechtolsheim, Graeme, and myself because you know, it's so standardized. 120 volts AC right and hey you know, maybe it gets distributed as four, 440, three phase, but you know, it is so standardized. It hasn't moved. Sockets standards, right, you're done. Think how fast this cloud world is evolving. Right the line between IA as in PaaS as we just touched upon, the services that are being offered on top of it. >> Security, security. >> Yeah, yeah, all these different things. To me, it is such a trite, simple analogy that has become so used and abused in the process that I think it leads people to such wrong conclusions right, about what we're doing and the innovation that's going on here and the potential that we're going to offer. So I hope that every one of our competitors takes that and says, "That's the right model." Because I think it leads them to exactly the wrong conclusion. >> I couldn't agree more. The big switch is a big myth. I wanted to get tactical for a minute. I listened to your conference calls. I can't wait to read the transcript. I just go, I got to listen to the calls, but just observing those and the conversations around here, I just wanted to ask you. I always ask CEOs, "What keeps you up at night?" They always say execution so let's focus on execution in the next 12 to 18 months. I came up with the following. "To maintain dominance in vSphere, "get revenue beyond vSphere, "broaden end user license agreements, "increase end user computing adoption "and proof points around hybrid cloud." Are those the big ones? Did I miss anything? >> That's a good list. >> Yeah? >> That's a good list. >> So those are the things an observer should watch in let's say 12 to 18 months of indicators of success and of what you're doing and what you're driving. >> Yeah and you know, clearly inside of that, with SDDC, obviously we think this environment for networking, right, and what we've really, I'll say delivered that. That would be one in particular inside of that category that we would call out you know, with regard to our hybrid cloud strategy. It's clearly globalizing that platform. Right, we announced Savvis here, but we need to make this available on a global basis. You go to an enterprise customer and they're going to say, "I need services in Japan, I need services in Singapore. "I need to be able to operate in a global basis." So clearly having a platform, building out the services on top of it is another key aspect of building those hybrid user cases and more of the value on top of it and then in the EUC space, we touched a bit on the mobile thing already. >> So we'll have Martin on later, but his PowerPoint demonstration. >> What a rockstar, what a rockstar. >> He is a rockstar and we've had him on before. He's fantastic, but his PowerPoint demonstration is very simple, made it seem so simple. It's not going to be that easy to virtualize the network. Can you talk about the headwinds there and the challenges that you have and the things that you have to do to actually make progress there and really move the needle? >> Yeah it really sort of boils down in two aspects. One is we are suggesting that there will be a software layer for networking that is far more scalable, agile and robust than you can do in a physical networking layer. That's a pretty tall order, right? I need to be able to scale to tens, hundreds, millions of VMs, right? I need to be able to scale to terabytes of cross-sectional packet flow through this. I need to be able to deliver services on top of this, right, that truly allow firewalls, load balancers, right, IDSes, all of those things to be agile, scale. Yeah, it is ambitious. >> Ambitious. >> This is, right, the most radical, architectural statements in networking in the last 20 or 30 years and that's what gets Martin passionate. So there's a lot of technical scale and we really feel good about what we've done, right, but being able to prove that with robust scalability, right, for which like the Hyper-Visor, it is more reliable than hardware today, in being able to make that same statement about NSX that just like ESX, it is better than hardware, right, in terms of its reliability, its resilience. That's an important thing for us to accomplish technically in that space, but then the other pieces, showing customer value, right? Getting those early customers and what a powerful picture. GE, Citigroup and eBay, right? It's like wow, right? These are massive customers, right, and being able to prove the value and the use cases in the customer settings, right, and if we do those two things, you know, we think that truly we all have accomplished something very very special in the networking domain. >> Pat, talk about the innovation strategy. You've been now a year under your belt at VMWare and you were obviously with EMC and Intel and we mentioned on theCUBE many times, cadence of Moore's Law was kind of the culture of Intel. Why don't you tell us about the innovation strategy of VMWare going forward, your vision, but also talk about the culture and talk about the one thing that VMWare has from a culture that makes it unique and what is that unique feature of the VMWare culture? >> We spent time as a team talking about what is it that drives our innovation, that drives our passion, and clearly as we've talked about our values as a team, it is very much about this passion for technology and passion for customers and how those two coming together, right, with fundamental disruptive "wow" kind of technologies where people just say, like they did when they first used ESX and they say, "Wow, I just didn't ever envision "that you could possibly do that." And that's the experience that we want to deliver over and over again, right, so you know, hugely disruptive powerful software driven virtualization technologies for these domains, but doing it in a way that customers just fall in love with our technologies and you know as, I got a note from Sanjay and I just asked him, "You know, what do you think of VMWorld?" And he said, right, "It is like a cult geek fest." Right, because there's just this deep passion around what people do with our technology, right, and they're not even at that point, they're not customers, they're not partners. They are deeply aligned passionate zealots around what we are doing to make their lives so much more powerful, so much more enabled, right, and ultimately, a lot more fun. >> People say it's like being a car buff. You know, you got to know the engine, you want to know the speeds and feeds. It is a tech culture. >> Yeah, it is absolutely great. >> Pat, thanks for coming on theCUBE. We scan spend a lot of time with you. I know we went a little over. I appreciate your time. Always great to see you. >> Great to see you too. >> Looking good. >> Thank you for that. >> Tech Athlete Pat Gelsinger touching all the bases here. We saw him last night at AT&T Park. Great event here, VMWare World 2013. This is theCUBE. We'll be right back with our next guest after this short break. Pat Gelsinger, CEO on theCUBE.

(upbeat music) >> Work, sorry. >> Okay, we're live here at VMworld 2012. This is SiliconANGLE.tv's exclusive continuous coverage of VMworld. Day two, we're here, excited to have the new CEO of VMware, a long time, seven time Cube alumni when he was a lowly president of the EMC, Pat Gelsinger, with my cohost Dave. And welcome back to theCUBE. >> Hey, thank you very much guys, great to be here. >> Pleasure to see you again. >> First time as CEO, so first of all, how do you feel, tell us what it's like. Obviously, just for the folks who haven't watched the EMC World interview, I asked you a pointed question. I said Pat, if you were running VMware, what would you work on? So we'll get to that later, but. >> Okay. >> It turned out to be true. >> Turned out to, yeah once again, theCUBE got it nailed, like always, right? >> Absolutely. >> So just give us some personal color around the transition. So you know Paul, obviously you guys had great rapport, obviously, on stage yesterday. You got a standing ovation, he's being called the King on Twitter, he's got a huge respect. You guys work together, just take us through emotionally, the Pat Gelsinger, inside Pat, what went down there? How did it feel? >> And the way he, said handing over the custodianship of the community, to Pat Gelsinger, that was really, I think a great way to put it. >> Well you know, first thing, Paul and I are just great friends, you know? For 30 years, we've worked together. It's like you know, a great pick and roll team in basketball right, you know he knows when to pick, I know when to roll. You know, we just have really learned how to work together over the years. And just great respect for each other's talents. And Paul embraced me, and really endorsed me to the VMworld, and the community, in that sense, is powerful, right? But it also was intimidating. A bit of a responsibility as well. And you know, I had dinner with Tom Jorgens last night. Right, it's sort of like oh, two weeks ago, we were trying to kill each other. Now, my new best friend, right? So it is this very rapidly shifting role. As well as, we laid out a pretty bold vision this week. >> And you were at Intel too, you understand the whole partnership dynamic, we talk about this in theCUBE, the ecosystem, obviously VMware, the beginning of this massive opportunity of extending beyond the VMware look. I mean you announced, as an example, people who not VMworld, that's always been about VMware, they've been dominant in the enterprise. But yesterday you announced changes to the pricing. I mean you guys are thinking bigger now. Is that part of the plan, to think bigger, beyond VMware, and extend to other vendors? Obviously great love fest on the CEO panel yesterday, and also the demos up on stage. So talk about that mindset, and what you plan to do to take it beyond just VMware. >> Well it is very much a community. And when you think about what we're doing with software defined data center, right we're always touching everything, as Paul said. It's virtualizing the data center. And to do that, you know it's the networking guys, the security guys, the storage guys, the management guys, the new application vendors, right? It really is this ever broadening community. And as part of that is both a great opportunity, as well as a great responsibility too, all of those community players. And how can we innovate together, collectively, to bring about this next layer of fundamental innovation, agility, and speed, for the software defined data center of the future. >> So we want to get to that in a second. I want to ask you about about Paul Maritz again, just to kind of come back to the Paul thing. He has yet to be on theCUBE, so we're trying to get him on theCUBE and say it's a safe place. >> Does he not like you? What'd you do, you offended him? >> We haven't-- >> I don't know, he's... >> People want to know about him, he made some really, kind of cool, tongue in cheek comments yesterday about Facebook's valuation and VMware, everyone had a good chuckle out of it. But talk about Paul Maritz as a person. He's rarely doing public appearances, he's a total tech geek, he's a cool guy. So share with the folks out there, what's he like? >> Well you know, I think of Paul as sort of the Michael Jordan of strategy and technology, right? You know, he is just, you know, I don't think of myself as a bad strategist, this is like, the best strategist operating in the industry today around technology, and it's somebody who's deep in the technology, but also strategically very, very broad. And in that sense, his new role is really to allow him to really go focus on what he truly loves, his longterm strategy, understanding the technology trends and really going deep in that area. >> And the technology right, and he's also a huge technologist. >> Oh yeah right, you know he's sort of like, tops and bottoms, right, he's higher in the stack, I'm lower in the stack and boy, right between us, we sort of cover from sand to solutions. >> Well you said it's somewhat intimidating. And you're a lifelong hardware guy, now taking over a software company, how do you think about that, and how do you think you might change the way you approach your leadership? >> Well I think in some ways, I've always thought of myself as an infrastructure guy, right? And you know, most of silicon is done in software these days, so in that sense, I don't see it as that radical in that regard. But I have had the opportunity to really build the hardware infrastructure that every aspect of cloud is built on, and now to be able to put tops on bottoms, right, to be able to layer that software on top of it, to me is just a great opportunity, to take on this next piece of finishing that overall portfolio. >> How does he fit with Joe Tucci? Because I just love the dynamic was on there yesterday. You know, and we've had a chance to, Joe's been on theCUBE, and we've talked to him in person. Great guy, he's just such a great executive CEO. He's been around the block. Paul's like his sidekick now, and those two guys are going to cause some trouble. What's your prediction on the Joe Tucci, Paul Maritz dynamic, because you've got a strategist that no one's ever seen before in the tech business in Maritz, now with a canvas, painting a new canvas. He's done VMware, he's got that thing kicked off, laid out the roadmap in 2010, it's all filling in nicely. It's all going great, you're going to take it from there and ride that ship, and sail into good waters. But now he's now painting a new canvas. What is Joe and Paul talking about? What's that next canvas? >> Well, if you sort of think about Joe right, he's really become, at this point of his career, I'd say the elder statesman of the industry. Where everybody likes Joe, he makes everybody comfortable with him. And you know, there's just this comfort that Joe really brings to any situation. So here you have the big brains of Paul being combined with the experience, the relationships of Joe, and to me, I expect it to be a really powerful combination. >> You know I was commenting to Dave on a lot of things yesterday, and tying in some kind of trendy stuff, like Apple's market share value, and looking at that percentage of market share. And then also when you guys were up on the panel, one of the observations was, you've got the elder statesman in Tucci, and the senior experience of Joe with Pat, you and Paul, and a lot of the companies like Facebook, are run by people under the age of 35. So there's a generation of kids out there running big companies that have market caps of a billion dollars, so that's now coming on to the scene. How do you see that all playing out? Is there a trend towards business value, some kind of digs around the social media discontent, and the markets changing? You made a comment about that. But is it shifting to business value? Is that kind of what you guys are trying to get there? What do you say to those young leaders out there? And also what's happening in that market? >> Well I do think that there is this aspect of you know, building infrastructure, data centers, right, there's just this piece of okay, it's hard work, right, you have to transition people over time, your customers or CIOs, there is a level of security, confidence, et cetera, that needs to occur on that side. And then you have the dynamism of the consumer trends. And you know, Cook at Apple clearly is the elder statesman of the consumer social side of the world as well, and you know, he's not a teenager anymore, in that sense. But clearly it's this ability to generate extraordinary growth, extraordinary new valuation, as we've seen with Google and with Facebook. And how all of that matures, for social to become a sustained monetization model in the industry, isn't really proven yet. >> You know I was really liking Michael Dell on stage, trying to really make his point, I'm not going away, yeah we did a direct business model, we're the PC guys. And then he's advocating, and it's good to see him back in the game like that-- >> Yeah, me too, I think Michael, over the last two years, you know he has a tough job. HP has a tough job, to really transform those companies. And we have to say okay, Michael, he's really made progress. >> A lot of the CEOs in that PC era, they put a lot of East Coast mini computer companies out of business I think, don't want to see that happen to themselves, are a lot more paranoid to these (chuckling) year olds companies firms, and really more aggressive about staying the course. >> Yep, and Michael I think, has clearly said, I'm up for this challenge, and I'm going to take my namesake company through that challenge. >> So I got to ask you a hardware question. Because you know that business. Now you're going to be moving more into the different kind of this, with virtualization and apps. But HP and Dell are classic PC vendors. They've innovated, they were part of the whole Wintel generational shift. They have huge market shares, still. Margins yeah, are tight, but the market's changing. You guys' point about that, a new way. Apple has huge market value, and they have single digit share and growing, in hardware, yet they're so valuable. So the logic is, if you connect the dots, small, single digit share, yet huge profits. Really great, good products obviously. But they're wrapping services in other business models around the hardware, what's your take on that? I you were at Dell and HP, and saying hey, don't give up that PC business, just move fast, don't become driftwood, but what kind of services are they going to have to wrap around these products? Because the end user computing world, yes it is changing, multiple devices, but Apple has demonstrated that you can have a very strong hardware business and wrap around it. So what's your advice to those guys? >> Well I don't think of Apple as a hardware business, in that sense, I think Apple has been focused on a user experience that happens to be embodied in hardware and services, right? And in that sense, they have owned the user experience. They're maniacal about industrial design, they're maniacal about that whole experience, and have really innovated in how consumers buy, utilize, their products, and I think any aspect of things that touch the user have to have that in mind. It's all about the user experience, and they've done it well, and they've said, it's not hardware, it's not software. It's that integrative platform and experience. And my advice to anybody in that space, whether it's Dell, HP, Lenovo, RIM, Nokia, Microsoft, you have to really take that very aggressively in mind. >> So you had your put your man on the moon moment up in your keynote, you said let's get to, virtually 100% of applications, versus, I think you said 90%. That's intimidating, I'm reminded of the climber who's climbing to the top of the mountain and it's like this false summit, right? So, my question is, to get there you're going to have to lick the complexity problem. And over the years in IT, we think we've got that problem solved, and then you peel the onion, and and oh boy, there's more complexity there. To get to that 90%, you're going to have to solve that complexity problem, are we, have we solved it, are we on that path? >> Well, I think we're beginning to lay the foundation for it. And I think some of the software defined data center pieces, okay you know, we got to attack management and orchestration, we got to attack the network and security. So clearly those are elements of it. We have to make storage easy and available. But we also have to attack some of the higher level problems as well. Some of the cloud foundry, the PAZ layers as well, because it's not just about modernizing the old, with things like GemFire, and Data Fabric, and rebuilding the database environment, but it's also enabling the new, and enabling those across the multi cloud environments. And you know, so it's a lot of work to go do. But I think we've laid out the core pieces of the vision, and now my job is really to refine, execute and accelerate that endgame. >> Pat, I got to ask you about disruption and change. Joe Tucci made a comment that I thought was pretty Joe Tucci-like, when asked about the trends. And he said the horizontal's getting shorter, and the vertical's getting steeper in terms of the time, the change and the disruption. And he's hyper focused on that. I know you are too, and you tend to move fast and executive in watching your career. So let's take this software defined networking trend. I know we reported that you were in, when you took over EMC Ventures and looked at that, and you guys moved on some of those deals. So that's really key success, and we talk about it on theCUBE, but that's a game changer for VMware, like SpringSource was acquired, acquisition changed the developer landscape, now you got the Nicira deal as a game changing statement, but you have existing stuff going on like VCE, which is pioneering a lot of the vBLock stuff right? So you got VCE out there, and now you got the software defined data center at the merging side. So how do you sort that out? I know you're you know, first week on the job, or first second day on the job, but I mean you know the history. So, VC obviously, is a flagship offering is the vBLock, how does that fit into this change? I mean it's quickly, the disruption's positive. But they got to react, so a lot of the moving parts have to kind of, get tweaked. What do you see there for VCE? >> Well, and clearly you know, we have, on the SDN side, before I answer the VCE piece of it, you know we have two incredible assets. Right, we have the whole vShield, VXLAN capability, which you'd say, inside of the VMware environment was already well down the path of SDN, and now we have the Nicira assets, and NBP, and Open vSwitch, et cetera, so now, job one for us is bring those together as the most complete offering for the SDN space in the industry. You know we got two great teams. Bring those together, and unquestionably, we got the top talent in the world. So we got to make that happen, and then, we have to make that available for our partners to be able to then innovate with us, underneath us, and on top of us. We announced Sisco partnership yesterday, around how we're going to work together on that hardware, software boundary. And then with VCE, it's used them as the world class delivery vehicle for converged infrastructure, but now from the VMware role, it's hey guess what, you know HP just did a great integrated demo of their converged integrated. How are they going to participate with our SDN assets? And how do we enable them, how do we enable Dell, how do we enable the rest of the industry? >> And VCE now, how's that relationship, that's a separate company, but it's well funded and they've knocked down some good deployments. It's pretty solid, is it a high end offering? Is it more of, I mean how do you sort that out product wise? >> Well you know, VCE vBLock has always been a higher end offering, that's where UCS is positioned. It really is the premiere platform in in the industry. And we expect to continue to invest in that and partner with them, and VCE's doing well, hitting a billion dollar run weight, so we're happy with them. But as I'm quickly learning, I've got other great partners as well. >> So ecosystems obviously, are organic, they're ever changing. How do these acquisitions that you make change the balance of the ecosystem? >> Well everyone of them is aimed at, can we do it through partnership, or should we do it as an integrated offering? And that, where that line is, is never the same. Right, and we might make a decision that hey, it's better done in ecosystem today, and two years from now, hm, it's time to integrate into the core operating system of VMware, that's just the nature of how software and operating systems are built over time. Now that said, hey we're going to be an ecosystem friendly company, and even where we choose to integrate will always have OpenAPIs that enable industry innovation around us because there's more bright people outside of VMware than there are inside of VMware. So, and if we don't allow people to innovate with us, well yeah, they're going to go innovate somewhere else. >> Well, they have to move fast. You can't predict every innovation that's going to come down the road, and boom, something like Nicira was started in 2007, I mean-- >> You know, and I did a speech last year. I called it the Golden Triangle of Innovation. And there are are three primary pools of innovation. What we do organically, inside of an enterprise, like VMware, what happens in the university community, and what happens in the startup community. And we believe that we effectively have to participate in all three of those. Yeah we have our roots from Stanford and that community, and Nicira comes from Stanford and Berkeley, so clearly we see the university piece of it. We see the inorganic piece of acquisitions, and obviously organic, cool things we're that doing like VXLAN inside of the company. >> You've done a great job, I mean we can honestly say, we've been tracking you from the original interview, you did those things, and every year we ask you, we'll ask you at the end of this interview, what's your plan for the next 12 months? So congratulations on that. The question I want to ask you is, yesterday we heard abstract, pool, automate, which kind of is like code words for operating system. And you know you got to abstract away complexities, have resource management, and then automate and make all of that link and load together. >> You're pretty smart, that's good. >> (chuckles) I had to look that up this morning on Wikipedia, so that's cool, and you've also talked about your historical experience at Intel, cadence of Moore's law, so the question I want to ask you is, as you take over the helm at VMware, you have a different kind of OS cadence going on that's very rapid, as Joe Tucci pointed out. What's your Moore's Law for applications look like? Because now you have an enabling infrastructure in the VMware products and technologies as well as the ecosystem, and you've got to foster that enabling technology. So what is the cadence of the app market? >> Yeah, and you know first I'll say at the operating system level, with VMware, we say boy, we like this yearly cadence. And it's nice that it sort of matches with tick-tock model at Intel which I helped create. And sort of the major, minor releases of VMware are sort of in lock step with that. And you know, because what sets a cadence? Why shouldn't it be three or four years? What should be the right thing? And hey you know, we sort of set, we built on a firm foundation of SILICA, and we're going to align heavily on that. To me this tick-tock through through the stack, and then if I look to the next level of the stack, clearly you know, agile and sprints and so on, have allowed app development to occur, I'll say in a social, crowd sourced model in an effective way, but I think fundamentally, you got to say what is your foundation? And I'd say boy, you know a yearly major release cycle, I think there's good, solid technical foundations for that. And then making sure that you have an effective ability to continue to do continuous innovation. >> So Pat, for the last five or seven years, this industry obviously, has focused on doing more with less, operational efficiencies, obviously the conversion infrastructure trend. John talked about abstracting, automating, or pooling and automating, all those things really driving efficiencies, and you know the story with IT spending. It's flat, it's been down, but there's a thinking out there, with big data, and with new Flash architectures, that we can have major impacts on productivity. When John asked you at EMC World, what would you do if you were running VMworld, you answered, part of your answer was more tighter storage integration. I want to ask you specifically about a top down storage integration, in other words, bringing Flash, really managed from the server level, doing atomic writes, and driving new levels of productivity for organizations that go beyond just sort of cutting costs and better TCO. Can you talk about just the vision of, is that the right place to do it? In other words, controlling the metadata from fast servers versus slow storage? You know, it's an interesting transition from a storage company to now where you are as the head of VMware. >> Yeah, unquestionably, you know we have to do a better job at VMware of taking advantage of Flash on the server side, the performance capabilities of that, the IO gap that's opened up. In-memory data applications, but at the same time, we're seeing the polar extremes become more polar. The size of big data, will forever drive these larger and larger pools of scale out data on the one end, and now with in-memory and Flash technology on the server side, the things that you can do with extreme performance characteristics, at the server, at the application level, and VMware has to do a better job of making that available. And some of the things that Steve talked about with vFlash is an example of that. And we are going to do a lot better job of enabling those high performance, in-memory characteristic applications on this end, while an agent with larger and larger pools of shared storage on the other end. >> And embracing Hadoop you get one in further, you're going to bring big data analytic applications, and actually potentially feed those transaction applications that you're virtualizing in near real time, is that direction. >> Oh yeah, absolutely, but to me, the phenomenal thing is the extremes that are emerging here, where everything used to be just in a shared storage array, we're now sort of blown apart, right? Now we have high performance and memory on one end, and these massive scale platforms, and multi petabytes on the other end. It's pretty spectacular, and I said I essentially want to operate on both of them in essentially real time. >> What's interesting Pat, when we were at EMC World, I asked you can there be a red hat for Hadoop, and you said, you know, editorialized, you said you don't think it could be. We recently had that debate on SiliconANGLE and pretty much the crowd is weighing in that there is no red hat for Hadoop, mainly because just the market conditions are different. So just, I wanted to share that with you, and that we're going to continue to do that-- >> I'm glad they agree with me, I like that, so. >> You've made some good calls on big data. The question I want to ask you is though, is in the major presentation yesterday, you guys laid out the new experiences, and you talked about old way, new way. Access, it was access, app, and infrastructure, PC users, to mobile users, existing apps to new apps and big data, service to cloud. So I wanted to ask you about converged infrastructure. Because that's the old way, so a lot of the definitions around converged infrastructure has been defined as part of that old side, that side of the street that's old. Yet, in the new operating system future that we talk to everyone about, data's now a key kernel part of the design. So I want to ask you, data infrastructure, define what data infrastructure is as it relates to the new converged, if it's not replacing converged infrastructure, how has converged infrastructure changed from old to modern with data at the center of the value proposition? >> Yeah, you know, my EMC World keynote speech touched on this a little bit, this idea of data gravity. Where data gets bigger and bigger and heavier and heavier, and as the networks become agile, and VMs become mobile, things sort of move around that gravity well of the data. And I expect that to continue forward. So today, converged infrastructure, you'd say what's at the center of a vBLock? Right, you say well, sort of the UCS servers, because that's where the apps run. And I think increasingly in the future, the center of converged infrastructure's more around the storage infrastructure, because VMs are so mobile and light in comparison. But the idea of collapsing the boundaries between server, network and storage, I think is still a very fundamental concept. And when you go look inside of a Google data center, they don't quite think about it the same way. It's this array of infrastructure that is agilely available for their different applications. And I think that's fundamentally the right model. And a cloud scale version of converged infrastructure makes a lot of sense as well. >> And highly homogeneous, and many have observed, obviously, the advantage that Amazon and Google have. And you're clearly, the software defined data centers moving toward a homogeneous environment. >> Right, one common software layer across a set of services that are embodied in converged infrastructure hardware. >> And historically, homogeneous has meant you don't get best of breed. So how do you achieve best of breed? Is that through the ecosystem? Maybe, if you could elaborate on that a little bit. >> Well I think in this case, the scale operation characteristic swamp, the individual characteristics are best of breed in that sense. And they become enabled through this layer. But that hardware, software boundary is always a point of innovation. When virtualization of VMware first emerged, Mendel had this paranoia, we would rely on no hardware. We'll make it work on anything. And then over time, the hardware got better at doing things like page table mapping, memory breakthroughs, et cetera, for virtualization. All of a sudden, it's sort of like, oh the hardware's enabling better virtualization. You took advantage of it. And the same thing will emerge as you go think about converged infrastructure for networking and storage as well. The hardware will continue to evolve to better enable this virtualization layer of software and automation above it. >> We're starting at the hook, but you know we want to go, you got multi core, high megahertz clock speed right now, with Pat, we have a couple minutes left. I have two questions, one is around the future of virtualization, we're following, on SiliconANGLE.com, some of the new advances around large data centers that have commodity gear. So obviously, the usual suspects are Google, Facebook and whatnot, having a lot of commodity machines. And low level virtual machines is a really big trend now, looking at how to deploy VMwares at a programmatic layer. I don't know if you're following that. So I want you to comment on what you're following relative to some of the new trends around VMs. Obviously down to the low level, low level virtual machines and how they're playing up the stack, and then my final question after that would be, in the next 12 months, what's on your to do list? >> Yeah, well you know, I think you know, part of our task is sort of today, the leader in virtualization, is continue to leading the trends in that sense. Continuing to reduce the overhead of virtual machines, IO stack improvements, the Flash example that we gave before is a big piece of that. And continuing to enable better app affinity. You saw the Hadoop work, you know some of the big VM work around databases as well, and saying now how does, because in many ways, databases, VMs operate on, under provision hardware, and be able to over provision, and databases are over provisioning in memory for an under provisioned resource of the database, it's almost the inverse. So how do we address that? The Serengeti Hadoop work is another example of that. So there's lots of things to continue to innovate at the virtualization layer, both as you look down toward the hardware, as well as as you look up toward the application, and I think in that sense-- >> Is that where the software kind of tie in, that's why you're not seeing software-defining networking, more stuff with defined data centers? You have some ranges there, is that the part? >> Well that's a big piece of it yeah. Right, and you wanted all that to become policy based. Because you want essentially, what Steve likes to call the virtual data center to associate the policy of the application requirements as well as with the policy mechanisms of the underlying infrastructure. So that you know, the virtualization, the networking, the security elements, all of those become embodied in that as a set of services to the VM or this virtual data center. Next 12 months, obviously job one is make the transition smooth. Job two is get plan 13 in place, as the year concludes here. And then some of the key agendas of those we already talked about, operate on the SDN. We just made 1.3 billion, I better make a good use of that. Figure out our storage and security virtualization strategies, our management stack, and some of the horizon things today are really pretty thrilling for that next generation end user experience. >> Pat Gelsinger, always a blast on theCUBE, now as officially the CEO, great to have you on. >> Well actually I'm not official yet, T-minus three days now, September 1st, so I got-- >> Three days, okay September 1st. (chuckles) >> Well congratulations on the-- >> Pat Gelsinger. >> Thank you very much. >> CUBE alumni, great guy and tech athlete for sure. This is theCUBE, SiliconANGLE.com's flagship coverage of all the events extracting the signal from the noise. We'll be right back with our next guest after this short break.

continues coverage of vmworld live 2010 on the scene at the Moscone Center South with special guest Pat Cal singer from EMC the president former Intel 30-year veteran welcome back to the cube back with the bloggers will upgrade from our last gig VMworld rockin here in VMware so Pat back back at the cube we'll go and we know you're really busy so so you've been at EMC now for almost a year what's it like there and you just acquired greenplum you've been busy since we last met so tell us quick update what you're doing the one-year is coming up and you got green Flint under your belt what does all this mean for EMC and then we'll talk about the keynote okay so well you know overall I think things are going on schedule if you think about it that way you know we said and coming into it we had certain agendas we did product announcements last week that we'll talk to you know that I'll cover in my super session today we've said we're gonna be acquisitive right we did art early in the year we just a green plum VMware's continued their quiz in nature they announced two acquisitions this morning you're personally I said we were going to be a disruptive entity in the industry well I think service model right he laid out key strategic directions for things like security right and how that starts to implement through the V shield directions also this model of IT as a service for IT as well as for service providers the key partnerships there so you know a major delivery through the Redwood technology that they did and and then here following up with you know some of the substance - you know showing the clear tangible progress against the directions that Paul was describing very consistent with a lot of the things you've been talking about sort of in preview fashion for shocking yeah we taught that UNC Rose storage is sexy and that what that went over real well since then M&A has been off the charts sizzling hot storage now we're here and and what we're seeing is proof points and you've done some things with green plum talk about what it all means in terms of proof points what proof points do you see that absolutely established the reality of cloud and that this is a mandate going forward as a future architecture whether it's developers mobility and talk about those proof points yeah and I think you know let's be careful I don't want to be too what while I am gonna answer your question I don't want to get too far ahead of my skis in the sense that there's still a lot more cloud washing than there is cloud substance and you know if you go back to the theme right to us you know virtual you know virtual roads actual clouds are trying to say there is some substance to it but still there's a lot of visionary directions here no that's said right as part of the be plowed a partner program that Paul described today you know these customers these part are putting up real cloud offerings today and those are becoming very real things like vCloud director real tools to implement those in place real customers like the Levi's example there were they're implementing this and what they do yeah we had Tom Peck on down at sapphire our CIO Levi's great story there yeah and you know I met with customers like Telstra yesterday right who is absolutely implementing services and delivering them to enterprise clients so I think that we've clearly in the hype cycle where you know the height great it's often well in excess of the reality and I think that's been the case for the last two years and now we're seeing in that hype cycle that the reality is starting to build where our real customers real services real applications are being deployed against this cloud model and sort of the mantra that we've been laying and we're seeing increasing industry momentum saying yes indeed we all need to rationalize our products our services against that cloud strategy so you've seen a lot of inflection points in your day as have we where do you see this one rating based on in the context of what you just said the whole cloud computing inflection point is it bigger than all the previous ones in your opinion or still remains to be seen well any anybody making such a prediction right you should think twice about right you know the validity of their claim that says but I think there's two aspects to it that I think indicate that it could be bigger than anything before yeah the first one is just the industry is bigger right IT and as the economy has grown an IT has grown as an percent of the economy we're just big now and IT truly is just a huge sector of the economy particularly for United States right Silicon Valley area you know this is our agenda for the world so as the economy's bigger and secondly this is disruptive in multiple dimensions of the industry the changes the infrastructure it changes the application model it changes the service model it affects service providers that affect system integrators many of the prior changes were not as disruptive across all of the strata of the industry so because it's bigger because it is more in across all dimensions of the industry I believe and certainly you know as Joe has talked about Joe touchier CEO has said this is the biggest how big I don't know but as this one feels like you know this is sooo not Amica last wave if I was a surfer yeah Joe's famous wave slot we had Microsoft on yesterday who's actually here but they can't really show anything and we talked about them about their hypervisor I asked a specific question about as the PC era reached the Stu glass ceiling the bloated PC chained to the desk the PC centric view you've lived that generation it's not so much that it's irrelevant it's just that it's changing and and we're in a new era so what VMware is putting forth with this architecture and some of the things you've been working on you have a platform and you have agnostic devices that really changes the game on this PC centric I mean what do you see on them on the on the user centric side the key variables in the industry well I think you know number one any of these waves you know I predicted in 1990 the end of the mainframe varied 20 years later it still hasn't quite gone away right and that's that's it's not like these waves become the death of all prior you did some damage but it doesn't like immediately eliminate those prior technologies but the Nexus of innovation the foci of the industries new capabilities productivity applications is shifted and I think all of us today would say the PC right isn't that foci of innovation hey lots of apps are using it use it yeah hey I am much more productive on my laptop than animun iPad or iPhone or Android I mean you know I just you know just much more productive in that sense but you know I can't carry my laptop around in my pocket right clearly we're seeing the shift of innovation new application models new consumer centric usage models both the devices and the applications and I think as Steve Harrods akino talked about very much hey I want an app store like thing for my enterprise applications right where you see much of that consumerization coming to corporate IT as well so it has shifted right applications usage models will be device independent right they will become more sumer focus and essentially let's just say they're gonna be more iPhone like greater than how we'd get them and consume that at at to Orlando we sat down and we chatted about at a great chat and at the Cuban Orlando I asked you a question about apps and infrastructure and I asked you specifically our apps leading the way and showing the infrastructure and you answered no infrastructure as always was a leading indicator to apps but apps seem to have more momentum what is the VMware announcement today how does that shape that that thesis that you mentioned I mean obviously it looks like more enablement at the software level what can you share with it cuz that's real as a great point and what I want to bring that out again yeah yeah and the point I made there was hey you know we know a simple structural hardware guys right we create capabilities and then the apps guys come in and use them inefficiently and poorly but to enable new things a sort of that you know that gap right of capability in the infrastructure that then gets filled in by application vendors and I still believe fundamentally that's the case you don't write apps for infrastructure that doesn't exist yet you can't run an applications business that way so our job is the infrastructure guys is always to create these new gaps these new vacuums for the app guys that come and fill in and I think everything we're seeing is very much that case where all of a sudden there's lots of performance that's easily readily available you know think about how easy it is to deploy a VM today right literally you know if I would have had to go provision things buy some new servers get the port's alakay to get a network reroute you'll build up a new storage infrastructure it might be months for me to allow a major new application to occur literally now a few clicks we what do you see in the VMware announcement today given what you guys are doing in at the app level as the core enabler the disruptive enabler that's gonna really tip that over in terms of the innovation yeah they're anything new there well I think there are two aspects to it you know if you take the redwood the vCloud director and I think it really is this idea being able to rapidly with essentially no cost be able to create new virtual data center infrastructure be able to do it with the security model with policy based capabilities with the provisioning environment in the manager let's go with that is way profound right the second thing is all of all the things about spring right is not just being able to do infrastructure more rapidly it's not just encapsulating existing applications it's also enabling a new developer model for tomorrow's applications as well and that is truly right thrilling to anybody who's doing enterprise application development some of the CIOs we had on we're saying that they actually benched themselves against the cloud service providers do you see those two worlds the cloud service providers and big IT coming together or do you see the cloud service providers always having an edge over a big IT well I think there's an aspect to that that you it's not our job is to make the infrastructure as efficient on both sides of that equation as possible so that an IT guy isn't making the decision based on cost he's making the decision based on business relevant factors you know this is something hey you know I need to guarantee compliance in this application this is a business critical infrastructure element for me I'm gonna run into my infrastructure but I know the cost of doing so is still highly efficient I might Feder a tit with an external service right I might do tests and dev externally and when that's done I might bring it internally I might use Federation of outside compute capacity so that I don't need to build for peak I build for average and I spill over to rent VMs at quarter close or month close I might say boy I want to actually be able to take advantage and federated some of my key customers or channel partners or business partners I'm gonna have and I'd actually be able to them to be able to view me as their service provider right so hey just operate and utilize my applications right as one of my business partners as well and that's really the power of the vision that we're laying out it's not public versus private it's public and private and allow them to be federated together into hybrid services that give you the best of both worlds in a seamless agile manner Pat the M&A activities been hot you did a greenplum acquisition DMC bought cream plum which is a nice acquisition and rate act was very nice come on this is a game-changing acquisition by EMC to the cube we treat our guests nicely so it's hot so the horses are on the track I tweeted that and said hey everyone's out in the track right now the big guys Oracle EMC net AB so talk about what's happening why is the M&A activity so hot is it an indicated the fact that people have to retool faster is it an activity that they're behind is an activity that they need to move faster all of the above what is your view on that and you know what's next in M&A well I think it's a couple of different factors are at work and one is if you show up at my super session later today you know one of my slides is the three views of the cloud right the uber cloud model the Google's Amazon's I'll call it the vertical cloud model HP IBM and then I'll call it the virtual cloud model even seen anywhere right you know and of course you're right we contrast those three and what we're seeing I would say is those business models those industry structures those strategic frameworks are driving the consolidation of all of the medium and small players into one of those pictures so I think you can look at that lens and say everybody is taking M&A acquisitions to better implement and solidify their view of that strategy of these three different views of the cloud so right one is its industry structure that's going on second is you know after the downturn everybody's coming out of it cash rich right you know yeah yo people got money to spend there's a good time to do it right you know in that sense and you know so right there is a clear right earnestness to people saying okay right I can pay dividends I could buy back shares boy that's pretty innovative strategy isn't it right or let's go start you know taking more aggressive steps I think it also indicates that there are only so many exciting assets available right you know good assets that people could take actions on so you know and any buyer and seller market right prices get crazy when there's more buyers than there are three party people who followed your career know that you had Intel you were very Pro ecosystem and we just had some VCS on yesterday top DC's and cloud talking about how hot it is and they're looking for startups not the angel stuff but like real money real real technology talk about the ecosystem that's emerging in the startup community because so there are guys developing new cool stuff that very cloud centric that's yeah new so talk about your view there what you see and what your general opinion is well I think like any these waves there isn't just the wave of what goes on in terms of what the big guys do right there's new university research that's going on as some of that's exciting there's also than the adventure community great and with this wave you know it is so disruptive it changes consumer computing new consumer devices new consumer applications new enterprise infrastructure new enterprise applications and you know all of a sudden we're seeing a new round of dramatic VC activity again and they're not going into you know startups that are building a six and semiconductor sort of I grew up sort of saying let's go build new infrastructure components new applications that live on this new model and virtualization yeah absolutely it's all riding this cloud virtualization trend and you got just a stunning you know 17,000 people at VMworld I have one final question I know you I know you want to get a final question actually let me get my final question first in a new close I'll give you less word so you've been spend a lot of time in New England lately do you like it there you're gonna get a movie stir well we cry you out of here we've taken a second home Oh faster half time and my wife is actually loving this bicoastal a couple weeks a couple weeks there back and forth excellent ball season starting absolutely maybe the Red Sox so we had some readers point out on the blog that the Pat gal singer has the same exact track that Joe Tucci had CEO president CEO anything you want a nice they want you I want to say anything do I have no announcement that's great thanks so much I know you're super busy and coming on the show always thank you guys thanks thanks we right back