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

>> Narrator: From Nice, France, it's theCUBE covering .NEXT Conference 2017 Europe, brought to you by Nutanix. (electronic music) >> Welcome back. I'm Stu Miniman, and this is SiliconANGLE Media's Production of theCUBE live broadcast from Nutanix .NEXT in Nice, France. To help me wrap up for today's coverage, I'm happy to have Jens Soldner, who is a consultant, does media, writes for some organizations, someone I've gotten to know at some industry events over the last couple of years. So Jens, thanks so much for joining me. >> Thanks to you. Thanks for inviting me, and happy to be here at Nutanix .NEXT Conference. Awesome event and I think the vendor has a bright future in front of him. >> You know, we're a year after Nutanix IPOed. The attendance at this show doubled absolutely. You know, every Nutanix show, and I've been at all five of them, you know, customers are usually, they're enthusiastic. It's self-selecting, right? You go to a VMworld, you come to a Nutanix show, Veritas, some of these, there's VEEMs show, usually the customers, it's a good measure of how the company's doing and barometer is customers are happy, they like what they're doing. One thing I like about Nutanix customers is they aren't just oh, we love everything and we believe everything that Nutanix says. It was like hey, calm, I talked to a couple customers that use it and they're like it's great. But everybody else is like yeah, I'm waiting to get my hands on it and really beat it up and we'll see if it does what it is because Nutanix has proven themselves and needs to continually prove themselves time and again. Really I think something that reminds me of the Cloud Era because if I'm buying from public cloud and I'm buying from a consumption basis, if I don't like something, I'll move, I'll stop paying. What's been catching your ear and eye at the show so far, what have you liked, what are you still questioning and want to learn more about? >> I think there's a lot of good things coming actually, like the new version 5.5 which will be out end of this year also we hear, so that's like brings some good incremental innovation, nothing overly massive, but some good stuff in there. But I of course like the future looking stuff, calm, sigh and so on and so that looks pretty promising, but as you said it's not available right now and we want to get my hands dirty, that's the thing. >> What you like is if you talk to the customers that are deeply involved, they've probably been beta testing a lot of the stuff in 5.5, some of the features get out in the community edition. In the keynote, they talked about MVME was one that had been tested, anything in particular that you've been hearing, customers that chomping at the bit, interested, 5.5 oh great, finally we have that? >> I think the generic compute platform is a good thing so in order to enable new use cases like SAP stuff, HANA, maybe you need for Oracle licensing, this kind of stuff for anything. >> Are you talking about I think they call it AC2? >> Yeah. >> Which that's not in 5.5 I don't believe, no? I think that's a future one. >> Oh then I got the wrong impression, okay. >> To be honest, that's one of the critiques sometimes, if you go look at this and you get the keynote and it's a deluge of so much stuff, you need the cheat sheet so I look through, Nutanix, they did a press release, there's like four blog posts, it takes a little while for those of us that look at this to sort through and be like oh wait, which of this, as you said, 5.5 oh, does that mean I can do it today well it's coming real soon and if you're a beta person, you can do it, as opposed to the object storage and AC2 type pieces, if I remember right and I'm sure Nutanix will watch and tell us if we got it wrong though, was a coming future, we'll let you know when we have a date. Little bit different now as a public company too, a lot of these, they don't pin down on certain quarters or dates because then that impacts financial reporting. Talk to us about you were obviously at the keynote, what else have you been doing, what sessions have you been going to or what's been happening? >> We had a lot of background talks with the Nutanix executive leadership like Sumir Pati, right before our talk here and we talked actually in depth about questions that other journalists and I had about calm, when it will be available, how it will be priced, what can you do, can you move apps from one cloud to the other, not in the near future, maybe in the more distant future. It looks pretty promising and for a cloud management person that is one of my main jobs out there in the normal life, then it looks pretty good actually, but as you said, getting the hands dirty is an essential part and maybe that's coming a little bit too short here to really see what's happening and not just announcements and announcements. >> Absolutely and if you were to place bets on what are the important pieces in the future, calm and Zi, absolutely something Nutanix have been talking a lot, super important that they get it right. You've been tracking calm since the acquisition, any nuances, what do they need to do, what's going to be ready, what do they need to have in the future to really make that work? >> I think actually going to get it right. I think in the grand scheme of things, like delivering it two weeks early or later in five years race with the competition is not making such a huge difference, so rather than delivering a immature and unready product, how do you say, like filing the edges off and making it smooth should take some time, however me as a technical person, I like to get my hands on the stuff and really see it, so that's the downside. >> Getting your hands dirty is something that a lot of customers here like to do, do you get to play with the community edition and the like? >> Not yet, but I have a Nutanix folder trust waiting in our data center, ready for installation and we want to compare it like how it runs with Vsphere and how it runs with AHV so that AHV I think is unlikely work load actually. >> We've been hearing the last couple of shows, AHV has really been front and center, it's an interesting mix for them to balance because even if about a third of customers of Nutanix are running AHV, that means two thirds of customers still are running one of the other hyper visors out there. I put the question to Nutanix and I said, what is victory, what is the ultimate goal and it's not 100% AHV, they're not looking to become a hyper visor company, they want to be a platform, work in the multicloud world, so when you talk to companies, how does that discussion go? Is AHV a central discussion point or is it some of the features that come along with it that help? >> I would say it's rather on the sidelines, I think it makes sense from an economic point of view, not having to pay additional licenses obviously and getting the impression, getting the right kind of experience with the product and even Nutanix, I think they say if the customer wants this and this and this extra, go get Vsphere. We are offering you a standard path, like with 80% of the features that you really really need and those 20 super esoteric stuff, like fault tolerance that nobody is really using, Vsphere they're not bringing it to AHV, they're keeping their product clean, simple, easy. >> You said cloud management, kind of a main focus area of you, what does Nutanix have to do to be a strong player in that market over the next two years? >> I think they are actually on a good vein already with the calm stuff, the thing is we need to see it, if it can compete with the other players out there, Vmware and Red Hat and you name it basically. Then to see if it gets accepted in the market, how the marketplace, the calm marketplace takes off and so on, I think the adoption, if it gains significant adoption, if there is traction in the market, in the blogosphere and so on, I think that's crucial. >> You mentioned Vmware and Red Hat, big companies, gigantic ecosystems. We all know the Vmware ecosystem and Red Hat open source, everybody's there, been at Red Hat summit for many years now. Any others that you'd say who they should be matching up as customers will be? >> I think computer associates has a good valid offering, but we personally see in the German market, most of the time, we realize automation, we've written three books on it, my brothers and I so that's maybe we are opinionated and biased here. In this case, but VMware's doing a good job in this cloud management space and of course they have a tight integration with the other products, like L6 that they have and I think Nutanix is very eager to catch up in these areas where they have gaps. >> One of the underlying, simmering conversations at a Nutanix event is that kind of Vmware, Nutanix relationship and we talked about still, lots of Nutanix deployments are using Vmware, didn't feel that they were bashing Vmware at this event, but what are you seeing when you talk to customers and you use a lot of Vmware, how's that relationship? Are there any challenges there or things that are concerning? >> At the end of the day, it's the customer's decision what they are going for, I think most of the customers might not go all in Nutanix, but only place it in certain use cases and so on. Of course Vmware is not happy, why should they be and they are positioning their VSAM product which is running quite well pretty aggressively but Nutanix has a different storyline, I think it's not only about the IOPS and it's about the simplicity of the whole thing and offering the customer a real, simple path to manage it in a cloud enabled fashion and that's where they're really doing a good job. However, Vmware, they can cover everything and they can figure so many little things and that makes the whole thing huge and complicated and of course you can, any use case can somehow be tailored to but also if you have a vendor who has a real good storyline of simplicity like Nutanix, they have a good chance here. >> Yeah, there was a lot of discussion, it was interesting, we were talking to Nutanix, they were talking about they want to get one click, it's about simplicity, then there's all of this learning from what other customers have done, I've got artificial intelligence starting to help in there. How do you see that trend going as to how, if I'm an administrator, is it reducing the number of clicks or am I going to be able to let go of the reins some and allow some other tooling and knowledge bases really drive some of that decision making? >> I think it's pretty helpful to have these expert knowledge bases built in, there's also a startup that does a similar thing in the Vmware space, Runecast, great guys and so on, so that's good but it's also challenging I would say for partners that they really need to see that with Nutanix of course we are going to sell as a partner, you are going to sell less wrecking and stacking of servers, you as a partner, you really need to refocus, learn the orchestration, learn the automation, get into container stuff in order to offer to your customers a valuable offering, a value proposition. Everybody needs to learn and I think Nutanix makes your life easier in these mundane, day to day activities, so that's I would say a good benefit of getting such an environment. >> Again, we're about at the halfway mark of the event, any other key takeaways, customer conversations that you'd want to share? >> I talked to a couple of partners, friends of mine from the Vmware instructor community and they say we are going all in Nutanix, so that was pretty impressive here and it's also what I heard not only from those who are actually doing it but of course from the Nutanix management, easy to understand why they say this, so I think there is a huge traction, some partners seem to have got the message and seem to say yeah, we are going all in. That was one of the things and of course I'll go a little bit more technical tomorrow so today was really packed with the official schedule, tomorrow is a little bit more free, so I'll have a couple more conversations with actual customers from a large Swiss bank, where we'll be doing the Vmware's implementation soon but they are also into Nutanix, so they are both a Vmware and a Nutanix partner so we'll meet up later on and yeah, that's pretty much the schedule. >> All right I never do this, but you got any questions for me for the wrap? >> What I would like to know is what's your take on the microsegmentation part of Nutanix, can it compete with the other offerings and I have not really looked at it so far. It looked pretty impressive to me in the keynote. >> Look, I'll say two pieces, one is, it's one of the top items that I've heard from users that they are super excited about. There was a bank I just interviewed earlier today, I think financial services and service providers were really excited for the microsegmentation. That being said, I've also talked to a bunch of the partner community and of course it's the typical, well how much is Nutanix doing versus what the department, oh we've had this and ours is much more future rich and the like, so it's good to see Nutanix moving down this line, they need to balance how much they'll do versus what some of their partners that are especially deeper in the networking space can do there. It's definitely one that you talk to customers that are getting into it, digging into it, but yeah it's a good one and definitely when you talk about those features coming out, one that customers have been asking for a bit. Like Vmware has done in the past, there's probably a lot of customers that what's built in is going to be good enough but then if I really need the Cadillac of it, I might need to pull in some best of breed partner to be able to compete it, so cool. >> That could also happen this year for us, if you look at the partner ecosystem, it's also pretty impressive and most of their named guys are here. >> All right well Jens Soldner, a pleasure catching up with you, thanks for helping us here on the Cube. We're wrapping up day one of two days of live coverage on the Cube. I'm Stu Miniman, you're watching the Cube. (dramatic music) (acoustic music)

>> Announcer: Live from New York, it's theCUBE, covering the IBM Machine Learning Launch Event, brought to you by IBM. Now, here are your hosts, Dave Vellante and Stu Miniman. >> Welcome back to New York City, everybody. We're here at the Waldorf Astoria covering the IBM Machine Learning Launch Event, bringing machine learning to the IBM Z. Bryan Smith is here, he's the vice president of R&D and the CTO of Rocket Software, powering the path to digital transformation. Bryan, welcome to theCUBE, thanks for coming on. >> Thanks for having me. >> So, Rocket Software, Waltham, Mass. based, close to where we are, but a lot of people don't know about Rocket, so pretty large company, give us the background. >> It's been around for, this'll be our 27th year. Private company, we've been a partner of IBM's for the last 23 years. Almost all of that is in the mainframe space, or we focused on the mainframe space, I'll say. We have 1,300 employees, we call ourselves Rocketeers. It's spread around the world. We're really an R&D focused company. More than half the company is engineering, and it's spread across the world on every continent and most major countries. >> You're esstenially OEM-ing your tools as it were. Is that right, no direct sales force? >> About half, there are different lenses to look at this, but about half of our go-to-market is through IBM with IBM-labeled, IBM-branded products. We've always been, for the side of products, we've always been the R&D behind the products. The partnership, though, has really grown. It's more than just an R&D partnership now, now we're doing co-marketing, we're even doing some joint selling to serve IBM mainframe customers. The partnership has really grown over these last 23 years from just being the guys who write the code to doing much more. >> Okay, so how do you fit in this announcement. Machine learning on Z, where does Rocket fit? >> Part of the announcement today is a very important piece of technology that we developed. We call it data virtualization. Data virtualization is really enabling customers to open their mainframe to allow the data to be used in ways that it was never designed to be used. You might have these data structures that were designed 10, 20, even 30 years ago that were designed for a very specific application, but today they want to use it in a very different way, and so, the traditional path is to take that data and copy it, to ETL it someplace else they can get some new use or to build some new application. What data virtualization allows you to do is to leave that data in place but access it using APIs that developers want to use today. They want to use JSON access, for example, or they want to use SQL access. But they want to be able to do things like join across IMS, DB2, and VSAM all with a single query using an SQL statement. We can do that relational databases and non-relational databases. It gets us out of this mode of having to copy data into some other data store through this ETL process, access the data in place, we call it moving the applications or the analytics to the data versus moving the data to the analytics or to the applications. >> Okay, so in this specific case, and I have said several times today, as Stu has heard me, two years ago IBM had a big theme around the z13 bringing analytics and transactions together, this sort of extends that. Great, I've got this transaction data that lives behind a firewall somewhere. Why the mainframe, why now? >> Well, I would pull back to where I said where we see more companies and organizations wanting to move applications and analytics closer to the data. The data in many of these large companies, that core business-critical data is on the mainframe, and so, being able to do more real time analytics without having to look at old data is really important. There's this term data gravity. I love the visual that presents in my mind that you have these different masses, these different planets if you will, and the biggest, massivest planet in that solar system really is the data, and so, it's pulling the smaller satellites if you will into this planet or this star by way of gravity because data is, data's a new currency, data is what the companies are running on. We're helping in this announcement with being able to unlock and open up all mainframe data sources, even some non-mainframe data sources, and using things like Spark that's running on the platform, that's running on z/OS to access that data directly without having to write any special programming or any special code to get to all their data. >> And the preferred place to run all that data is on the mainframe obviously if you're a mainframe customer. One of the questions I guess people have is, okay, I get that, it's the transaction data that I'm getting access to, but if I'm bringing transaction and analytic data together a lot of times that analytic data might be in social media, it might be somewhere else not on the mainframe. How do envision customers dealing with that? Do you have tooling them to do that? >> We do, so this data virtualization solution that I'm talking about is one that is mainframe resident, but it can also access other data sources. It can access DB2 on Linux Windows, it can access Informix, it can access Cloudant, it can access Hadoop through IBM's BigInsights. Other feeds like Twitter, like other social media, it can pull that in. The case where you'd want to do that is where you're trying to take that data and integrate it with a massive amount of mainframe data. It's going to be much more highly performant by pulling this other small amount of data into, next to that core business data. >> I get the performance and I get the security of the mainframe, I like those two things, but what about the economics? >> Couple of things. One, IBM when they ported Spark to z/OS, they did it the right way. They leveraged the architecture, it wasn't just a simple port of recompiling a bunch of open source code from Apache, it was rewriting it to be highly performant on the Z architecture, taking advantage of specialty engines. We've done the same with the data virtualization component that goes along with that Spark on z/OS offering that also leverages the architecture. We actually have different binaries that we load depending on which architecture of the machine that we're running on, whether it be a z9, an EC12, or the big granddaddy of a z13. >> Bryan, can you speak the developers? I think about, you're talking about all this mobile and Spark and everything like that. There's got to be certain developers that are like, "Oh my gosh, there's mainframe stuff. "I don't know anything about that." How do you help bridge that gap between where it lives in the tools that they're using? >> The best example is talking about embracing this API economy. And so, developers really don't care where the stuff is at, they just want it to be easy to get to. They don't have to code up some specific interface or language to get to different types of data, right? IBM's done a great job with the z/OS Connect in opening up the mainframe to the API economy with ReSTful interfaces, and so with z/OS Connect combined with Rocket data virtualization, you can come through that z/OS Connect same path using all those same ReSTful interfaces pushing those APIs out to tools like Swagger, which the developers want to use, and not only can you get to the applications through z/OS Connect, but we're a service provider to z/OS Connect allowing them to also get to every piece of data using those same ReSTful APIs. >> If I heard you correctly, the developer doesn't need to even worry about that it's on mainframe or speak mainframe or anything like that, right? >> The goal is that they never do. That they simply see in their tool-set, again like Swagger, that they have data as well as different services that they can invoke using these very straightforward, simple ReSTful APIs. >> Can you speak to the customers you've talked to? You know, there's certain people out in the industry, I've had this conversation for a few years at IBM shows is there's some part of the market that are like, oh, well, the mainframe is this dusty old box sitting in a corner with nothing new, and my experience has been the containers and cool streaming and everything like that, oh well, you know, mainframe did virtualization and Linux and all these things really early, decades ago and is keeping up with a lot of these trends with these new type of technologies. What do you find in the customers that, how much are they driving forward on new technologies, looking for that new technology and being able to leverage the assets that they have? >> You asked a lot of questions there. The types of customers certainly financial and insurance are the big two, but that doesn't mean that we're limited and not going after retail and helping governments and manufacturing customers as well. What I find is talking with them that there's the folks who get it and the folks who don't, and the folks who get it are the ones who are saying, "Well, I want to be able "to embrace these new technologies," and they're taking things like open source, they're looking at Spark, for example, they're looking at Anaconda. Last week, we just announced at the Anaconda Conference, we stepped on stage with Continuum, IBM, and we, Rocket, stood up there talking about this partnership that we formed to create this ecosystem because the development world changes very, very rapidly. For a while, all the rage was JDBC, or all the rage was component broker, and so today it's Spark and Anaconda are really in the forefront of developers' minds. We're constantly moving to keep up with developers because that's where the action's happening. Again, they don't care where the data is housed as long as you can open that up. We've been playing with this concept that came up from some research firm called two-speed IT where you have maybe your core business that has been running for years, and it's designed to really be slow-moving, very high quality, it keeps everything running today, but they want to embrace some of their new technologies, they want to be able to roll out a brand-new app, and they want to be able to update that multiple times a week. And so, this two-speed IT says, you're kind of breaking 'em off into two separate teams. You don't have to take your existing infrastructure team and say, "You must embrace every Agile "and every DevOps type of methodology." What we're seeing customers be successful with is this two-speed IT where you can fracture these two, and now you need to create some nice integration between those two teams, so things like data virtualization really help with that. It opens up and allows the development teams to very quickly access those assets on the mainframe in this case while allowing those developers to very quickly crank out an application where quality is not that important, where being very quick to respond and doing lots of AB testing with customers is really critical. >> Waterfall still has its place. As a company that predominately, or maybe even exclusively is involved in mainframe, I'm struck by, it must've been 2008, 2009, Paul Maritz comes in and he says VMWare our vision is to build the software mainframe. And of course the world said, "Ah, that's, mainframe's dead," we've been hearing that forever. In many respects, I accredit the VMWare, they built sort of a form of software mainframe, but now you hear a lot of talk, Stu, about going back to bare metal. You don't hear that talk on the mainframe. Everything's virtualized, right, so it's kind of interesting to see, and IBM uses the language of private cloud. The mainframe's, we're joking, the original private cloud. My question is you're strategy as a company has been always focused on the mainframe and going forward I presume it's going to continue to do that. What's your outlook for that platform? >> We're not exclusively by the mainframe, by the way. We're not, we have a good mix. >> Okay, it's overstating that, then. It's half and half or whatever. You don't talk about it, 'cause you're a private company. >> Maybe a little more than half is mainframe-focused. >> Dave: Significant. >> It is significant. >> You've got a large of proportion of the company on mainframe, z/OS. >> So we're bullish on the mainframe. We continue to invest more every year. We invest, we increase our investment every year, and so in a software company, your investment is primarily people. We increase that by double digits every year. We have license revenue increases in the double digits every year. I don't know many other mainframe-based software companies that have that. But I think that comes back to the partnership that we have with IBM because we are more than just a technology partner. We work on strategic projects with IBM. IBM will oftentimes stand up and say Rocket is a strategic partner that works with us on hard problem-solving customers issues every day. We're bullish, we're investing more all the time. We're not backing away, we're not decreasing our interest or our bets on the mainframe. If anything, we're increasing them at a faster rate than we have in the past 10 years. >> And this trend of bringing analytics and transactions together is a huge mega-trend, I mean, why not do it on the mainframe? If the economics are there, which you're arguing that in many use cases they are, because of the value component as well, then the future looks pretty reasonable, wouldn't you say? >> I'd say it's very, very bright. At the Anaconda Conference last week, I was coming up with an analogy for these folks. It's just a bunch of data scientists, right, and during most of the breaks and the receptions, they were just asking questions, "Well, what is a mainframe? "I didn't know that we still had 'em, "and what do they do?" So it was fun to educate them on that. But I was trying to show them an analogy with data warehousing where, say that in the mid-'90s it was perfectly acceptable to have a separate data warehouse separate from your transaction system. You would copy all this data over into the data warehouse. That was the model, right, and then slowly it became more important that the analytics or the BI against that data warehouse was looking at more real time data. So then it became more efficiencies and how do we replicate this faster, and how do we get closer to, not looking at week-old data but day-old data? And so, I explained that to them and said the days of being able to do analytics against old data that's copied are going away. ETL, we're also bullish to say that ETL is dead. ETL's future is very bleak. There's no place for it. It had its time, but now it's done because with data virtualization you can access that data in place. I was telling these folks as they're talking about, these data scientists, as they're talking about how they look at their models, their first step is always ETL. And so I told them this story, I said ETL is dead, and they just look at me kind of strange. >> Dave: Now the first step is load. >> Yes, there you go, right, load it in there. But having access from these platforms directly to that data, you don't have to worry about any type of a delay. >> What you described, though, is still common architecture where you've got, let's say, a Z mainframe, it's got an InfiniBand pipe to some exit data warehouse or something like that, and so, IBM's vision was, okay, we can collapse that, we can simplify that, consolidate it. SAP with HANA has a similar vision, we can do that. I'm sure Oracle's got their vision. What gives you confidence in IBM's approach and legs going forward? >> Probably due to the advances that we see in z/OS itself where handling mixed workloads, which it's just been doing for many of the 50 years that it's been around, being able to prioritize different workloads, not only just at the CPU dispatching, but also at the memory usage, also at the IO, all the way down through the channel to the actual device. You don't see other operating systems that have that level of granularity for managing mixed workloads. >> In the security component, that's what to me is unique about this so-called private cloud, and I say, I was using that software mainframe example from VMWare in the past, and it got a good portion of the way there, but it couldn't get that last mile, which is, any workload, any application with the performance and security that you would expect. It's just never quite got there. I don't know if the pendulum is swinging, I don't know if that's the accurate way to say it, but it's certainly stabilized, wouldn't you say? >> There's certainly new eyes being opened every day to saying, wait a minute, I could do something different here. Muscle memory doesn't have to guide me in doing business the way I have been doing it before, and that's this muscle memory I'm talking about of this ETL piece. >> Right, well, and a large number of workloads in mainframe are running Linux, right, you got Anaconda, Spark, all these modern tools. The question you asked about developers was right on. If it's independent or transparent to developers, then who cares, that's the key. That's the key lever this day and age is the developer community. You know it well. >> That's right. Give 'em what they want. They're the customers, they're the infrastructure that's being built. >> Bryan, we'll give you the last word, bumper sticker on the event, Rocket Software, your partnership, whatever you choose. >> We're excited to be here, it's an exciting day to talk about machine learning on z/OS. I say we're bullish on the mainframe, we are, we're especially bullish on z/OS, and that's what this even today is all about. That's where the data is, that's where we need the analytics running, that's where we need the machine learning running, that's where we need to get the developers to access the data live. >> Excellent, Bryan, thanks very much for coming to theCUBE. >> Bryan: Thank you. >> And keep right there, everybody. We'll be back with our next guest. This is theCUBE, we're live from New York City. Be right back. (electronic keyboard music)