(bright music) >> Hello, and welcome to this CUBE conversation. I'm John Furrier, your host of theCUBE, here in Palo Alto, California. It's a hybrid world, we're still doing remote in news. Of course, events are coming back in person, but more importantly conversations continue. We've got two great guests here, John Siegal, SVP ISG Marketing at Dell Technologies, and Dave McGraw, office of the CTO at VMware. Gentlemen, great to see you moving forward. Dell Technologies and VMware great partnership. Thanks for coming on. >> Great to be back. >> Yeah, hi, John, thanks for having us. >> You know, the world's coming back to kind of real life, Omnicon virus is out there, but people say it's not going to be as bad as we think, but it looks like events are happening. But more importantly, the cloud native, cloud operations is definitely forcing lots of great new things happening, new innovations on-premises and at the Edge. A lot of new things happening in Dell and VMware, both have been working together for a long time now. VMware a separate company, we'll get to that in a second, but let's get to the partnership. What's new, what's changed with the relationship? >> Yeah, so I mean, just to kick that off and certainly Dave can chime in, but I think in a word, you know, John, nothing changes in terms of my customer's perspective. I mean, in many ways our joint relationship has never been stronger. We've put a ton of investment in both joint engineering innovation, Joint Go To Market over the last several years. And we're really been making what was our vision a couple of years ago a reality, and we only expect that to continue. And I think much of the reason we expect that to continue is because we have a shared vision of this distributed multi-cloud, you know, cloud native, modern app environment that customers want to drive. >> Yeah, and John, I would add that we've been building platforms together for the last five years, a great example is VxRail. You know, it's a market-leading technology that we've co-engineered together. And now it's a platform that we're actually building out use cases on top of whether it's multi-cloud solutions, whether it's private and hybrid cloud or including Tansu for developer environments. You know, we're using the investments we made and then we're layering in and building more value into those investments together. And we put agreements in place by the way that, you know, multi-year agreements around commercial arrangements and partnering together as well as our technology collaboration together. So we feel really confident about the future and that's what we're communicating to our customer base. >> Yeah, indeed just go ahead sorry, John. >> No, good. >> I was going to say just to build on that, as he said, I really, when I say not much changes, I mean, VMware has always been an open ecosystem partner, right? With its OEM vendors out there. And I think the difference here is Dell has made a strategic choice and a decision to make a significant investment in joint innovation, joint engineering, joint testing for VMware environments. And so I think a lot of this comes down to the commitment and focus that we've already made. You mentioned VxRail, which is a fantastic example where we at Dell, we've invested our own IP. You know, HCI systems software, that's sort of the secret ingredient that the secret sauce that delivers that single click, you know, automated lifecycle management experience. And we're investing lots of dollars in test labs just to ensure that customers always have that, you know, that seamless experience. >> You know, one of the benefits of doing theCUBE for 11 years now, it's just been that long, both EMC World and Dell World back in the day was our first events we went to. We've watched you guys together over the years. One of the things that strikes to be consistently the same is this focus of end to end, but also modularity, but also interoperability and kind of componentizing kind of the solution, not to oversimplify it, but this is kind of the big discussion right now as cloud scale, horizontal scale is with cloud resources are being put into the development stream where modern applications now are clear using only cloud native operations. That doesn't mean it's just cloud. I mean, it's cloud everywhere, but it's distributed computing. So this is kind of the original vision if you go back even five years or more. You guys have been working on this. This is kind of an important inflection point because now it's well known that the modern application is going to have to be programmable under the hood. Meaning everything's going to be scaling and rise of superclouds or new Edge technologies, which is coming fast. This is the new normal. This is not something that we were talking about mainstream five years ago, but you guys have been working on this kind of simplicity solutions-based approach. What's your reaction? >> That's right, John, I'll tell you, you might remember at VMworld a couple of years ago we announced Project Monterey. And now this was really a redefining architecture for not only data center, core data centers, but also for cloud and Edge environments. And so it's leveraging technology, you know, data processing units also known as smart NICs. You know, we're essentially redefining what that infrastructure looks like, making it more efficient, more performance, depending on the use case. So we've been partnering very closely with Dell to develop that technology and it's going to really transform what you see at the Edge and what you also see in core data centers going forward. >> Yeah, and there's so many of those. I mean, I think it seems Monterey is a great example of one that we continue to invest in. I think there's also NBME over TCP is another, if you will key ingredient to how customer is going to essentially get the performance they need out of the infrastructure going forward. And so we were proud to be a partner there, at most recent VMware where we announced, you know, the ability to essentially automate the integration of MBME over TCP with Dell EMC system integrated with vSphere. And that's a great example as well, right? I think there's countless. >> John: Yeah. >> And I'll tell you, we are so excited to see what Dell has done in the storage business with PowerStore X, where they've integrated vSphere ESXi into a storage array. And, you know, that creates all kinds of opportunities going forward for better integration and really for plug and play of, you know, the storage technology into cloud infrastructure. >> What's interesting about what you guys talking about is remember the old DevOps moving infrastructure as code. Okay, that became DevSecOps. That's big part of Tansu and security. Now it's all about devs, right? So now devs have all that built in and now the operations are the big conversation because one of the things we pointed out in the theCUBE recently is that, you know, VMware has owned the IT operations world, in our opinion for a long, long time. Dell has owned the enterprise for a very long time in terms of infrastructure in front solutions. The operational efficiency of cloud hybrid is really kind of what's the gateway to multi-cloud. This has been a big part of IT transformation. Can you guys share how you guys were working together to make that flexibility to transform from the old IT to the new IT? And what are some of the things that you're seeing with your customers that can give them a map of how to do this? >> Yeah, so I would say, you know, one area in particular that we're really coming together is around APEX, right? From an as a service perspective. I think what APEX is really doing is really unifying much of what you just described. It's taking as a service, it's taking multi-cloud, it's taking cloud native development if you will, and modern app development. And we together partner to ensure that's a consistent experience for customers. And we have a number of new APEX cloud services that keep that in mind and that are built on joint innovations, like frankly, VxRail at the bottom of that as they've said earlier. So for customers are looking to get, you know, item managing infrastructure altogether, which we, you know, we're seeing more and more now, we recently announced the APEX Cloud Services With VMware Cloud you know, which is again, a joint solution that'll be available soon. And it's one that is managed by Dell, but, you know, it gives customers that simplicity and scale of the public cloud, but certainly that control and security and performance, if you will, that they prefer to have in the private club. >> Yeah, and I think because, you know, the APEX Cloud Service is designed with the VMware Cloud, you have a capability that drives consistency and portability of workloads for customers. So they don't have to re-skill and retrain to be able to manage the environment. They also are not locked in to any particular solution. They have this ability to move workloads depending on what their needs are; economically, performance, you know, logistics requirements, and they can react accordingly as they digitize their business going forward. >> It's interesting, you guys are talking about this demand in a way, addressing this demand for as a service, which is, you know, it can be one cloud or multiple clouds, but it's really more of an abstraction layer of what you deploy to essentially create that connective tissue between what's existing, what's new and how to make it all work together to again, satisfy the developer 'cause the new apps are coming, right? They want more data is coming into them. So this has been, is this the as a service focus, is that what's happening? >> Yes, absolutely, yeah. The, as a service focus is, you know, at the end of the day is how are we going to really simplify this. We've been on this journey now for at least a year and much more to go. And VMware has been a key partner here, you know, on that journey. So a number of cloud services. We've had APEX Hybrid Cloud, APEX Private Cloud, you know, out there for some time. In fact, that's where we're getting a lot of the traction right now, and this new offering that's going to come out soon that we just mentioned with VMware cloud is just going to build on that. >> And VMware is a super cloud, isn't it Dave? Because you guys would be considered by our new definition of Supercloud because you can sit on Amazon. You also have other clouds too, so your customers can operate on any cloud. >> Our view is that, you know, from a multi-cloud future for customers to be able to be on-premises with a, you know, APEX service, to be able to be operating in a Colo, to be able to operate in one of many different hyperscalers, you know, providing that consistency and flexibility is going to be key. And I think also you mentioned Tansu earlier, John. You know, being able to have the customer have choice around whether they're operating with VMs and containers is really key as well. So, you know, what Dell has done with APEX is they set up again, another platform that we can just provide our SASE offerings to very simply and easily and deliver that value to customers in a consistent fashion going forward here. >> You know, I just love the term Supercloud. Actually, I called it subclass, but Dave Vellante called them Superclouds. But the idea is that you can have all the super power in the cloud capabilities, but it's also distributed clouds, right? Where you have Edge, you've got the Core and the notion of a cloud isn't like one place in which there's distributed computing. This is what the world now realizes. Again, we've talked about in theCUBE many times. So let's discuss this whole Core to Edge dynamic because if everything's cloudified, if you will, or cloud operations, you've got devs and ops kind of working together with security, all that good stuff. Now you have almost a seamless environment where code can run anywhere, data should traverse anywhere, but the idea of an Edge changes dramatically and certainly with 5G. So can you guys tie that Edge computing story together how Dell and VMware are addressing this massive growth at the Edge? >> Yeah, I would say, you know, first and foremost, we are seeing a major shift. As you mentioned today, the data being generated at the Edge it's, I think Michael Dell has actually gone on record talking about the next frontier, right? So it's especially happening because we're seeing all these smart monitoring capabilities, IOT, right? At almost any end point now from retail, traffic lights, manufacturing floors, you name it. I think anywhere where data is being acted upon to generate critical insights, right? That's considered an Edge now and we're expecting to see, as ITC has already gone out there on record as saying 50% of the new infrastructure out there will be deployed at the Edge in the next couple of years, so. And it's a different world, right? I mean, I think in terms of what's needed and what the challenges are, there's certainly a lack of specialized technical resources, typically at the Edge, there's typically a scaling issue. How do you manage all those distributed endpoints and do so successfully? And how do you ensure you lay any concerns around security as well? So, you know, once again, we've had a very collaborative approach when it comes to working on challenges like Edge, and, you know, we, again, common theme here, but the VxRail, which is a leading, you know, joint ACI off in the market is the foundation of many of our Edge offerings out there in the market today. The new satellite nodes that we just announced just a few months ago, extends VxRail's, you know, value proposition to the Edge, using a single node deployment. And it's really perfect for customers that don't have that local technical resource expertise or specialized resources. And it still has cyber resilience built right in. >> And John, just to follow up on that real quick, before Dave chimes in. On the Edge, compute has been a huge issue. And I've talked with you guys about this too. You guys have the compute, you have the integrated systems now, any update there on what VxRail is doing different or other Edge power (John laughs) PowerEdge sounds familiar? We need some more power at the Edge. So what's new there? >> Well, you know, first of all, we had new PowerEdge platforms of course, come out in this past year, and, you know, there's, we're building on that. I mean, the latest VxRail is of course, leveraged that power of PowerEdge. Yeah, lots of a good naming arrogance, right? PowerEdge. >> John: I love that. And, but, you know, it's, you know, it's at the heart of much of what we're doing. We're taking a lot of our capabilities that have been IP, like streaming data platform, which enables streaming, video and real-time analytics and running that on a VxRail or PowerEdge platform. You know, we're doing the same thing, you know, with, in the manufacturing side. We're working with partners that have IOT Edge platforms, you know, and running those on VxRail and PowerEdge. So we are taking very much the idea here that, yes, you're right with our rich resources of infrastructure, both with PowerEdge and VxRail, you know, building on that. But working with partners like VMware and others to collapse an integrated solution for the Edge. And so we're seeing really good uptake so far. >> Dave, what's your take on the Dell Edge with VMware, because automation is big theme, not moving data across an internet that's obviously huge. And you got to have that operational stability there. >> Absolutely, and, you know, to your point, being able to do the processing at the Edge and move results around versus moving massive amounts of data around is really key to the future going forward. And, you know, we've taken an approach with Dell where we're working with customers, we're having detailed conversations, really using a "Tiger Team Approach" around the use cases; manufacturing and retail being two of the real key focuses, healthcare another one where we're understanding customer requirements, it's both today and where they want to go. And, you know, so it's about distributed computing, certainly at the Edge. Dell is coming out with some great new platforms that we're integrating our software with. At the same time, we have technology in STWIN and SASE that become part of that solution as well, with VeloCloud. And we're developing a global network of points of presence that really will help support distributed application environments and Edge-native Application environments working with Dell going forward. >> That's great stuff. The next ending question is what's next. I want to just tee that up by bringing up what you kind of made me think of there, Dave, and this is key supply chain on both hardware and software talking about security. So when you say those things you're talking about in terms of functionality, the question is security, right? Both hardware and software supply chain with open source, with automation. I mean, this is a big discussion. What do you guys react to that about what's next.. >> Yeah, I can tell you from a central engineering perspective, you know, we're looking at security compliance and privacy every day, we're working closely with Dell. In fact, we're in the middle of meetings today in this area. And, you know, I look at a few key areas of investment that we're making collectively together. One is in the area of end to end encryption of data. For virtualized environments or containerized environments, being able to have end-to-end encryption and manage a very efficient way, the keys and maintain the data compression and deduplication capabilities for customers, you know, efficiency and cost purposes while being very secure. The second area we're working closely on is in Zero Trust. You know, being able to develop Zero Trust infrastructure across Edge, to Core, to Colo, to Cloud and making sure that, you know, we have reference designs available to customers with procedures, policies, best practices, to be able to drive Zero Trust environments. >> John what you're (indistinct) is huge and you guys have, literally could be the keys to the kingdom pun intended. You guys are doing a lot of great security at the Edge too, whether the traffic stays with the Edge or goes across the network. >> That's all right, I'm as curious, like you said, it's been a joint focus and initiative across much of our portfolio for quite a while now. And I think, you know, you asked what's next and I think, you know, sky's the limit right now. I mean, we've got the shared vision, right? I think at the end of the day, you know, we've shared a number of joint initiatives that are ongoing right now with Project Monterrey. Obviously our integration with Tansu and a number of solutions we have there, work around APEX, et cetera. I think we have complimentary capabilities. You mentioned, you know, areas like supply chain, areas like security, you know, and I think these are all things that we both do well together. And the thing I will say that I think is probably the most key to us sustaining this great execution together is our collaborative cultures. I think, you know, there's something to be said for what we built, you know, all these last several years, you know, around these collaborative cultures, working together on joint roadmaps and focusing on really end of the day solving our customer's biggest challenges, whatever those may be, you know? And so at the end of the day behind us, we have the greatest supply chains, you know, services, support, and innovation engines. But I think, you know, I think that the passion, our groups working together I think is going to be key to us going forward. >> Well, great stuff moving forward together with Dell Technologies and VMware. David, thanks for coming on. John, great to see you. Thanks for sharing insight. Great CUBE conversation talking encryption, we've spoken about Edge and supply chain as well. Great stuff, great conversation. Thanks for coming on. >> Thank you >> Thank you so much, John. >> Okay, this is theCUBE conversation. I'm John Furrier, with theCUBE. You're watching CUBE coverage. Thank you so much for watching. (bright music)

>> Narrator: From around the globe it's theCUBE with digital coverage of VMworld 2020 brought to you by VMware and its ecosystem partners. >> Welcome back, I'm Stu Miniman and this is theCUBE's coverage of VMworld 2020 hard to believe our 11th year covering the event. Of course, the first year it is a global virtual event. So happy to welcome to the program. We're going to be talking about some of the multicloud networking. So first from Equinix, Bill Long, he's the senior vice president of product management and joining him the founder of VeloCloud Sanjay Uppal, he's the senior vice president and general manager for a VeloCloud. Now part of VMware, Bill and Sanjay thanks, thank you so much for joining us. >> Happy to be here. >> All right so Bill, we had Sanjay on the program last year, hard to believe, you know, Sanjay and I were talking, it's been over two years since the acquisition of VeloCloud, of course, SD-WAN has been real growth. Equinix has gone through, you know, changes, you have an acquisition I want to talk about a little bit later, but since we're at VMworld, Bill, want to start with that partnership, of course every, I think most people know Equinix. You've got data centers around the globe you've got direct connects into the big public clouds and obviously a long partnership with VMware. So bring us up to date. >> Yeah, so obviously with our data centers, there's tons of virtual machines running, running in our data centers today but as we, you know, Equinix is a bit special because our specialty is, is the place where networks connect to each other. So as people are moving more to a distributed hybrid multicloud type of architecture, especially even with the work from home, with COVID, they wanted to be able to get their infrastructure deployed out further, closer to their users. I mean previously to do that they had to actually physically deploy hardware. So the exciting sort of evolution, the partnership with VMware is what we're doing with VeloCloud, where you can actually deploy the SD-WAN infrastructure on a virtualized basis, spin up the VeloCloud infrastructure and have your SD-WAN solution without actually having to ship physical equipment. So what it's doing for our customers, it's allowing them to really move to that distributed hybrid multicloud architecture without a lot of the requirements that were previously there for shipping and appliance, installing appliance, wiring it up. So we've sort of predeployed all of that and made the buying experience much more fluid, which was super fortuitous timing given sort of the environment that we're all in today, where you can't just hop on a plane and put it, ship an appliance somewhere and install it. So it's a longterm relationship and we're super thrilled to have him on the network edge platform today so that it can be enabled virtually not just physical. >> Yeah, so Sanjay. I want to follow up on what Bill was just talking about there, of course, being acquired by VMware, being a software solution makes a lot of sense in that vision that we've had for SDN for NFV was I want to get rid of the physical appliances. We want to make it much easier to be able to deliver those services. So, you know, I'd love to hear a little bit, especially here in 2020, the architecture of your service just makes it easy to deploy, easy to help customers do what they need to do. >> Yes Stu and Bill and it's all about the simplicity and automation. This whole thing about software defined WAN or SD-WAN came about because customers found it really difficult to have stacks of these physical appliances that they had to deploy at every endpoint in their network and then in a hub and spoke model where the hubs were there to deploy another set of appliances. So the software defined part of this, right from the get go for VeloCloud now at VMware was to make this really be simple and automated and how do you get simplicity and automation? Well, you take most of the complexity out. And the way that we took the complexity out was to collapse all of that hardware at the end point and make it one very simple, easy to deploy appliance and then the other end, which is the one that Bill was just talking about for the collocated entities, where we had our software defined, ran gateways, there was physical infrastructure that was required and Equinix has been a partner, right from 2013 to get those gateways deployed at the SD-WAN points of presence. The great thing now, and you've heard the announcements at VMworld. The great thing now is that you don't have to deploy all that hardware at the hub end points. All you do is use Equinix's network edge. You get our SD-WAN gateways deploy them as software, and now you can also scale it out and get your SASE or secure access service edge deployed in exactly the same way. >> Bill there's often just discussion of hybrid and multi-cloud, and sometimes it's a little hard to wrap our brains around what customers are doing. I know when I tour a data center, like one of yours, it really, you can understand what's happening. what I'm curious about is, in some of your data centers connecting between clouds could just be, I'm connecting a cable over a couple of rows, or I've got an interconnect to AWS to Azure, or the light. Does SD-WAN fit into those environments where we're connecting close is where does, and maybe, maybe there's some areas that SD-WAN doesn't fit in. 'Cause we know SD-WAN has been really that interconnected fabric, helping customers do their multicloud. I'm just curious in your world kind of the parameters. >> Yeah, I think we, as Sanjay did a great job of describing it as the hub and spoke where you have the hub that might be like a branch office location, where you want to bring that traffic in to the spoke would be the end officer in the hub. You want to bring that hub in and then that traffic might want to go out to a cloud as you were talking about the use case you just described, but what's important is you want that hub to be the place where the most ISPs or internet service providers are such that you're aggregating that traffic efficiently locally and then you want to make sure you're getting that traffic over to a cloud as efficiently as possible. So luckily Equinix, you know, locations, what's so special about those is not just, it's not just a data center It's, who's in the data centers that are with you. So in the locations where we have the VeloCloud gateway and the network edge solution, they're all located together. So you have, it's a local place where the ISP networks terminate so you can originate that traffic from a home office worker or any kind of branch office location. You can then get it into the VeloCloud edge and since, and then out to the cloud and most of the time those cloud edge nodes are actually physically in an Equinix data center. So if you look for solution, has the least amount of hops can have the least amount of latency, highest performance, fewest amounts of points of failure. It's really a very efficient architecture to be there and of course, with less sort of networks to traverse, it's also a pretty cost effective as well. >> Yeah, absolutely. You know, as, as Bill pointed out, SD-WAN solves two problems. So it is, it used to start off as a branch office solution, but it's the name doesn't connote anything that is specific only to branch offices when you get to multi-cloud and you have information that needs to go, let's say from one of the public cloud providers, Amazon to another one Azure Equinix is a perfect location to do that because both those cloud providers and others meet at Equinix, and then also the network providers meet at Equinix. Now we are the software layer that directs the traffic and that steers it between cloud providers, from branches to cloud providers, from remote users to cloud providers and that Equinix is the perfect meeting point. We are that SD-WAN software layer. That's kind of like the traffic cop, that steers the traffic around. >> Wonderful well, Bill, Sanjay was talking earlier about the secure access service edge, SASE. I keep having to go through my head. It's not a self addressed stamped envelope anymore, but Bill help us understand, you know, what Equinix, how Equinix helps deliver this environment. We know you've got a great footprint on not only the cloud partnerships, but really locations that help us get to the, you know, the customer's edge. >> Yeah, it's very similar to what we're talking about earlier, where if you're looking for an efficient way to basically originate traffic closest to the user, such as the highest performance being, the fact that we're in over 200 data centers spread out around the world means that we can be local to where the actual traffic wants to be. So, and we're connected to all the ISPs that are local so you bring that traffic in and then you can provide a security perimeter around that today. Like what the edge instance and what the Velocloud solution has but then also when you want to connect that out to the rest of your infrastructure, whether that's one of the, 10,000 enterprise customers that happens to live within Equinix today, or if you need to connect to your MPLS provider, that's all there as well. So it really acts as that hub for bringing you in to be able to efficiently originate that traffic into one of these SASE platforms, and then, do the types of things that Sanjay was talking about with the software layer on top to be able to secure it and really do special routing with the traffic, such that it has the highest performance and is more secure. So making sure that it's distributed, efficient, aggregation of local traffic, but then also having the option to be able to connect out to whoever you want to connect out to. Some of the ways that we've seen that evolve as Sanjay will talk about the, it works not only for branch offices, but from work from home users as well. The fact that people were local in our data center and as traffic we saw earlier this year, as much as a 40% increase in some locations in traffic, in order to scale that it was a matter of just setting up a couple of cross connects instead of having to procure multiple hundred gig circuits from a network service provider. So having all of those pieces co-resident in a single location really helps unlock the potential of the SASE architecture. >> Sanjay one of the items that caught everybody's attention in the keynote is project Monterey. We went the cloud native with project Pacific last year now really going deep with Monterey for AI and edge. There's some similarities between the branch technology that you said we started with with VeloCloud. Does SD-WAN fit into this Monterey discussion when we talk about edge? And then Bill, I expect this as somewhere where packet fits in. So definitely want to hear your commentary on it too. >> Yeah, absolutely. I think the bigger picture here is traffic comes from all these locations. So whether it is remote users, branch office users, campus users, and those are the entry points into the network. Then they come and they meet at the meeting point. One of the best meeting points is Equinix and then at that meeting point you can analyze the traffic. Obviously you want to keep privacy and security in mind, you can add additional security services as you go, which is the whole idea behind SASE. If you're going to aggregate this traffic and bring it to those meeting points, the meeting points are the perfect places to add the additional security, whether it is web-based security, or it is firewall security, you add that there and then the traffic goes on to its final destination as Bill was talking about and that final destination may be a cloud provider. It may be through another carrier, an MPLS provider, or maybe just back to the enterprise's data center. Now the whole idea here is as you collect the traffic, you can also analyze parts of it again, keeping privacy in mind and this is where AI comes in because you can have specific algorithms going in and figure it out when something goes wrong in the network, how to recognize that and how to self-heal. So self-healing is one of those areas that we are working on, but the infrastructure that we're putting in place between Equinix and us is a necessary building block to be able to get to that self-healing end state that we're all looking forward to. >> Great, Bill on the edge piece. Am I right that this is something that packet's going to help with? >> Absolutely. So I mentioned earlier where the model forever, the value of Equinix has been, as Sanjay was highlighting the ability to connect to the ecosystems you want to care about, but that, as I mentioned, it previously required, even if you want to have VMs, you still had to have physical servers that those VMs had to be on and that was, sort of a barrier to people adopting the hybrid multicloud architecture. So what we've done with the acquisition of packet is we're basically predeploying infrastructure that you can then load whatever VMs you want on top of that, such that you can use a SASE type of architecture to originate and secure your traffic and then connect that directly into a set of predeployed infrastructure and Equinix but to be very clear, what we're trying to do is we're still sort of the place that you put your workloads, but instead of having to ship physical equipment, we're just predeploying the infrastructure for you. So our goal is to really have infrastructure at software speed, but we still will continue to stop really at the software layer. So what that, the packet acquisition was really about was removing one of those barriers of having to physically deploy equipment, such that people can, deploy their infrastructure much more quickly and without the constraints and time and Capex requirements of actually having to put, to deploy physical equipment. >> Yeah, yeah, definitely and that's why, you know, I've heard quite a bit about packet at the Amazon shows the last couple of years, so exciting and it seems like a solid fit, not only for Equinix, but to expand the VMware partnership. Bill I'm wondering, you know, long partnership, any specific customer examples that you might be able to share, even if it's anonymized, as you know, how SD-WAN is really helping customers along with their business challenges. >> Yeah. we've got a couple of great proofs of concept coming along. Right now there's a manufacturing company that we're working with who needs to be able to localize traffic from one of their, both their headquarters and a couple of their factories and so they're looking to be able to, aggregate that traffic locally and then connect it to their, to their infrastructure that's actually physically in Equinix. So this is a, this is a GA solution. We've got a couple of great proofs of concepts going, and this is it's ready to scale. >> Wonderful. Sanjay I want to give you and Bill final words, final takeaways you want people to have with regarding the partnership and VMworld 2020. >> Yeah, sure. So, you know, we've been partners, like I said, since 2013, and we really value this relationship. It started off by us saying right in the beginning, the cloud is the network. That was our mantra, right from the get go. Now the cloud being the network, one of the buffet meeting places for the cloud was Equinix. So we located our SD-WAN gateways there. It did require hardware infrastructure to be put in, but of course people would much rather have a beer or drink a latte instead of rolling out hardware and so Bill came along and said, Hey, I have this perfectly good thing called network edge. Doesn't require to put all your hardware in. You can get your SD-WAN software deployed and so we made that gateway into a virtual edge on the context of a specific enterprise and now literally at the click of a button, you can deploy a virtual edges at Equinix locations, don't have to roll out any specific hardware and from that meeting point, you can get to any cloud provider, you know, many of the MPLS providers and then get access in low latency. Latency is now the criteria everybody's looking at and so between what Bill is doing and what we are doing, it is solving that enterprise's problem, using the latency, getting all their entry points at this meeting place. So thank you Bill. >> And thank you, Sanjay. I think you summed it up really well. I think, as Sanjay highlighted the value has been there for a long time of what it means to have a great SD-WAN solution in the right place and I think now with what we've done together, making that available on a point and click, we really have the easy button and so I know from customer conversations that I've had, I get requested for VeloCloud being available network edge. Now that it's there, I'm confident there's going to be a lot of unlock now that we have the easy button. So I think it's a great combination of a value made easy and I think the partnership is going to get stronger from here. >> Well, definitely lowering the latency to be able to deploy those solutions faster is what customers need. Sanjay, Bill thank you so much for joining us, congrats on the progress and look forward to hear more in the future. >> Thanks Stu. >> Stick with us for more coverage from VMworld 2020. I'm Stu Miniman and thank you for watching theCUBE. (upbeat music)

(upbeat music) >> From the Cube studios in Palo Alto in Boston connecting with thought leaders all around the world. This is the CUBE Conversation. >> Hey everybody this is Dave Vellante and welcome to the special CUBE Conversation. I'm really excited to have Keith Bradley here he's the Vice President of IT at Nature Fresh Farms. Keith good to see you. >> Hey, good to see you too there Dave. >> All right, first of all I got to thank you for sending me these awesome veggies. I got these wonderful peppers. I got red, orange. I got the yellow. I got to tell you Keith these tomatoes almost didn't make it. It's my last one on the vine. >> (Laughs) >> These guys are like candy. It's amazing. >> Yap. They are the tasty thing. >> Wonderful. >> You know what, I'll probably just join you right here now too. I'll have one right here right now and I'll join you right now. >> My kids love these but I'm not bringing them home. And then I got these other grape tomatoes and then I've got these mini pepper poppers that are so sweet. You know which one I'm talking about here. And then we've got the tomatoes on the vine. I mean, it's just unbelievable that you guys are able to do this in a greenhouse. Big cukes, little cukes. Wow. Thank you so much for sending these. Delicious. Really appreciate it. >> Yeah. Well thank you for having them. It's a great little tree and it's something that I know you're going to enjoy. And I love for everybody to have it and there's not a person I haven't seen that hasn't enjoyed our tomatoes and peppers. >> Now tell me more about Nature Fresh Farms. Let's talk about your business I want to spend some time on that. We've got IoT, we got a data lifecycle. All kinds of cool stuff, scanners. Paint a picture for us. >> I like to even go... If you don't mind. I like to even go back to where our roots actually came from. So Peter Quiring, our owner actually was a builder by nature and he was actually back in the year 2000 really wanted to get into the greenhouse because he was a manufacturer. And he built our phase one facility back in 2000 under the concept that he said, "there's computers out there." And Peter will be the first one to say, "I don't know how to use them, "but I know that it can do a lot for us." So even back in 2000, we were starting to experiment with using the computers back then to control the greenhouse, to do much of the functionality. Then he bought it under the concept as our sister company, South Essex Fabricating that he would sell the greenhouse turnkey to somebody else. Well, talking to him and I've been around since about phase two. He basically said, "when I built phase three, "which is our first 32 acre range, I realized that is actually in the pepper business now," and he realized he was a grower and then he fell in love with the industry. And again, kept pushing how we can do things automated? How do we can do things? How do we get more yield, more everything out of what we do? And as a lover of technology he made it a great environment for everybody including the growers to work in and to just do something new. >> Well, I mean the thing that we know that as populations grow we're not getting more land. Okay (laughs). So, you have to get better yield and the answer is not to just pound vegetables with pesticides. So maybe talk about how you guys are different from sort of a conventional farming approach, just in terms of maybe your yield, how you treat the plants, how you're able to pick throughout the year, give us some insight there. >> So basically I'll start with through the lifecycle of a pepper. So it's basically planted at a propagator and then it comes to our facility and it comes in the little white boxes here behind me. And they actually are usually about that tall. They're about a foot tall. Maybe a little more when they come to us. And right from that point in time, we start keeping track of everything. How much we put water, how much water it doesn't take, what nutrients it takes, how much it weighs. We actually weigh the vines to know how much they are in real time. We do everything top to bottom. So we actually control the life cycle of the plant. On top of that, we also look and have a whole bio scout division. So it's a group of people that are starting to use AI to actually look at how the bugs are attacking the plants. And then at the same time, we release a good bug that will eventually die off to kill the bugs that are starting to harm the plant. So it basically allows us to basically do as close to natural way of growing a plant as possible without spraying or doing anything like that at night. It's actually funny 'cause there's a lot pictures out there and you think that a greenhouse, it's going to be wet in here. And actually for the most part, it is dry all the time. Like I'm very hot, it's very dry and it's just how we work. We don't let anything inside. We control everything in that plant's life. And now with our newest range, we even control how much light it gets. So we basically give it light all night too. And even some nights when it's a little days out, not like today, but when it's a little dark out and the sun's not up there, we'll actually make sure it gets more light to get that more yield out of it. So we can grow 24/7 12 months a year. >> Okay Keith. So it sounds like you're using data and AI to really inform you as to nature's best formula for the good bugs, the bad bugs, the lighting to really drive yields and quality. >> Yeah, we analyze, like I said, everything from the edge that we collect, like I said, we have over 2000 sensors out in the greenhouse and we keep expanding it more and more every year to collect everything from the length of the vine, the weight of the vine in real time. And we basically collect it from the day the plant is born to the day that we actually take it all out to be composted. We know how much light it got. Does it need to get light that day? We analyze everything in general and it allows us to take that data back in real time to make it better and to look at the past data to do better again. Like you hear, some times we have actually have a cart going by here now. That data from that cart, we'll go back to our growers and they will know how much weight they got out of that row in the next 15 to 20 minutes. So they can actually look, okay, how did that plant react to the sun, how's tomorrow? Does it need more nutrients? Does it need a little less? They take all that data from the core and make sure it's all accurate and as up to date as possible. >> So Keith, and maybe even you can give us approximations, but so how much acreage do you have? And how much acreage would you need with conventional farming techniques to get the kind of yields and quality that you guys are able to achieve? >> So we own 160 acres of greenhouse that's actually under glass. It's actually 200 acres total of land but what's 160 acres approximately of greenhouse that's actually under glass. 'A' we're always constantly growing. Our demand is up that that's why we grow so fast. Usually you're looking at both 12 to one. So for every foot squared of space, you're looking for equivalent is about 12 feet squared for a conventional farm. That's the general average. Mostly because we can harvest year round, we can continually harvest. We maximize the harvest amount and everything total. >> I'm also interested in your regime, your team. So obviously you're supporting from an IT perspective, but you've got all this AI going on. You've got this data life cycle. So what does the data team look like? >> We're actually... I always laugh though. I like to call our growers are basically data analysts. They're not really part of my IT team, but they basically have learned the role of how to analyze data. So we'll have basically one or two junior growers, per range. So probably about, I'd say about, we have about 10 to 12 junior growers and then one senior grower per whole farm. So probably about three or four senior growers at any one time. But my IT staff is actually about a team of four, five, including myself. And we are always constantly looking at how to improve data and how to automate the process. That's what drives us to do more. And that's where the robots even come in is every time we look at something, it's not even from an IT perspective, but even just from a picking perspective, how do we automate this? How do we do a better tomorrow? How do we continually clean this up? And it just never ends. And every year we look back, okay, it cost us a dollar per meter squared or per foot square for the people down South in America there now. We look at that and how do we do that better next year? How do we do better the next day? And it's a constant looking and it's something we look at refining and now that's why we're going so much into AI 'cause we want to not look at the data and decide what to do. We want the data to tell us what to do. >> You guys are on the cutting edge. I mean this is the future of farming. I wonder if we could talk about the IT, what does the IT group look like in the future of farming? I mean you guys, what's your infrastructure look like? Are you all in the cloud or you can't be in the cloud because this is really an extent of an IoT or an edge use case. Paint a picture of the IT infrastructure for us if you would. >> So the IT infrastructure it's a very large amount at the edge. We take a lot of the information from the edge and we bring it back to our core to do our analyzing. But for the most part, we don't really leverage the cloud much yet and most of it is on-prem. We are starting to experiment with moving out to the cloud. And a lot of it is, you'll laugh though, is because the farming and agriculture industry really was stagnant for a long time and not really stagnant, but just didn't really progress as fast as the rest of the world. So now they're just starting to catch up and realizing, wow, this is a growing industry. We can do a lot of cool things with technology in this range. And now it's just exploded. So I'm going to say in the next five to 10 years, you're going to see a lot more private clouds and things like that happening with us. I know we're right now starting to just look at creating with the VxRail, a private cloud, and a concept like that to start to test that water again of how to analyze and how to do more things onsite and in the cloud and leverage everything top to bottom. >> So you've got your own servers at the edge... So Intel based servers, what's your storage infrastructure look like? Maybe describe the network a little bit. >> Yap. Okay. So we are basically, I'll admit here, we are a Dell factory. We're basically everything top to bottom. Right now we're on an FX2, Dell FX2 platform. It's basically our core platform we've been using for the last five years. It does all of our analitics and stuff like that. And we have just transformed our unstructured data to Isilon. It's been one of the best things for us to clean that up and make things move forward. It was actually one of those things that management actually looked at me and kind of looked at me and said, "what are you nuts?" Because we basically bought our first Isilon and then four months later, I said, "I love this. I got to have more," because everybody loved it so much in the way of store things. So we actually doubled the size of it within four months, which was a great... It was actually very seamless to do, but we're now also in a position where the FX2 in that stage type of situation didn't quite work for us to expand it. It wasn't as easy to expand. So we wanted to get away that we could expand at a moment's notice. We can change, we can scale out much faster and do things easier. So that's why we're transforming to a VxRail to basically clean that up and allow us to expand as we grow. >> So you're essentially trying to replicate the agility and speed of the cloud but like you say, you're an edge use case. So you can't do everything in cloud. Is that the right way to think about it? You mentioned private cloud but just sort of cloud experience, but at the edge. >> Yeah. We try to keep everything at the edge. It just makes it a lot easier to control. Because we're so big. Think about it like you are bringing all this information back from everywhere. It's a lot of data to come back to one spot. So we're trying to push that more, to keep it at the edge so that we can analyze it right there in the moment instead of having to come back and do it but yeah. And I think you'll see in the next few years, a lot of change to the cloud, I think it'll start to be there, but again, like I said, the private cloud will probably be the way most will go. >> Okay. So I got to ask you then, I mean, you've really tested that agility over the last 60 days with this COVID pandemic. How were you able to respond? What role did data play? You had supply chain considerations. Obviously, you got a lot of online ordering going on. You got to get produce out. You've got social distancing. How were you able to handle that crisis? >> Well it was a really great thing for our team. Our team really came together in a great way. We had a lot of people that did have to go home and we started because we had so many ranges all over, already about a year and a half ago we started implementing an SD-WAN solution to allow us to connect to different areas and to do all kinds of stuff. So it was actually very quick for us to be able to send the others home. We used our VeloCloud SD-WAN to expand it. It was very seamless and we just started sending people home left, right and center. The staff that had to stay here, like the workers out in the greenhouse here now are offshore labor as we call it. They work great. They worked with at every moment of the day and they dug right in. We haven't lost heartbeat. Like actually our orders have gone up in the last... Through this COVID experience more than anything else. And it's really learned... It really helped from an IT perspective and I laugh about this and it's one of the greatest things about what I do, I love this moment, is where sometimes we were very hesitant to jump on this video collaboration. I said, "hey, that's a great way of doing this." But sometimes people they're very stuck in their ways and they love it and they're like, "I don't know about this whole team Zoom "and all that fun stuff," but because of this, they've now embraced it and it's actually really changed the way even they've worked. So in a way, it kind of sped up the processes of us becoming more agile that way in a way that would've taken a long time. They now love teams. They love being able to communicate that way. They love being able to just do a quick call. All that functionality has changed and even made us more efficient that way. (mumbles) >> How does this all affect your IT budget allocation? Did you get more budget? Was it flat budget? Did you have to shift budget to sort of work from home and securing the remote workers? Can you sort of describe that dynamic? >> So it did, I'll be true, there's no way around it to not up my budge. They basically said, "yep, "you have to do what you have to do. "We have to continue to function, "we cannot let our greenhouse go down "and what do you need to do to make it happen?" So I quickly contacted Dell and got things coming and improve our infrastructure as much as we could to get ready. I contacted (mumbles). I basically made it so that my team can support every single part of our facet from home if they actually had to go home. So for example, if I had to get stuck at home, I could do every single part of my job from home, including the growers as much as possible. So say our senior grower had to get home. I locked him up. He has to be able to see everything and do everything. So we actually expanded that very quickly and it was a cost to us. But again, there's no technology we didn't implement that we hadn't talked about before. We just hadn't said, "you know what? It's just not the right time to try that." And now we just went ahead and we just said, we got to do it now. And there's not one part of our aspect that we don't reuse. >> Was Dell able to deliver? Did they have supply constraint issues? I mean, I know there's been huge demand for that whole remote worker. Were able to get what you needed in time? >> Yeah. You know what, I think that we hit it a little ahead of the scope of when things started to go bad, our senior management, our president and all that. He basically said, "you know Keith, "we got to get ready on this. "We got to get some stuff coming." We never ran out of some things. The quirkiest thing and it is just a reality, the biggest thing was webcams was to kind of trying to get webcams. Other than that, there was issues with UPS and Purolator and FedEx because they were just inundated too. But for the most part, we kept everything moving. There wasn't a time that I was actually really waiting on something that we had to have. One of the other great things of our senior team that's here is they've really given me the latitude to say, "what do you need and how do you need to do it?" And so I have my own basically storage area of stuff everywhere. And my team does laugh at me 'cause they call me a hoarder and I basically have too much. And we were able to use either some older stuff or some newer stuff and combine it and we got everything running. There was only a little hiccups here and there but nothing ever is going to go perfect. >> Yeah. But it's enabling business results. We've asked a lot of it pros like yourself like what do you expect the shape of the recovery? And obviously our hearts go out to those small businesses that have been decimated. You're clearly seeing industries like airlines and hospitality and restaurants are obviously in rough shape, but there is a bifurcated story here. Some businesses and it sounds like in this camp where the pandemic was actually a tailwind, your online demand is up, food, vegetables, people... There were a lot of meat shortages. So people really turn to vegetables, is that right? Is that the shape of the recovery actually, is maybe not even V-shape, it's been a tailwind for Nature Fresh Farms. >> Yeah. You know what? It has been a tailwind and that's the right way to say it. We've just increased our yieldage. We've increased that, it's not unnew for us, that's been the biggest driving force for us is basically the demand for our product and building fast enough to keep up to that demand. Like we continually build and expand. We've got more ranges being built in the coming years like looking towards the 21, 22, 23 year. It's just going to just continue to expand and that is purely because of demand. And this COVID just again, escalated that little bit 'cause everybody's like, I really want the peppers and like you learned, we actually do have some tasty peppers and tomatoes. So it does make it a nice little treat to have at home for the kids. >> Well, it's an amazing story of tech meets farming. And as you said for years your industry kind of became quiet when it came to tech, but this is the future of farming, in my opinion. And Keith, thanks so much for coming on the CUBE and sharing the story of Nature Fresh Farms. >> Well, thank you for having me. It's been a great pleasure. >> Alright. Thank you for watching everybody this is Dave Vellante for the CUBE and we'll see you next time. (upbeat music)

(upbeat music) >> From the Cube studios in Palo Alto in Boston connecting with thought leaders all around the world. This is the CUBE Conversation. >> Hey everybody this is Dave Vellante and welcome to the special CUBE Conversation. I'm really excited to have Keith Bradley here he's the Vice President of IT at Nature Fresh Farms. Keith good to see you. >> Hey, good to see you too there Dave. >> All right, first of all I got to thank you for sending me these awesome veggies. I got these wonderful peppers. I got red, orange. I got the yellow. I got to tell you Keith these tomatoes almost didn't make it. It's my last one on the vine. >> (Laughs) >> These guys are like candy. It's amazing. >> Yap. They are the tasty thing. >> Wonderful. >> You know what, I'll probably just join you right here now too. I'll have one right here right now and I'll join you right now. >> My kids love these but I'm not bringing them home. And then I got these other grape tomatoes and then I've got these mini pepper poppers that are so sweet. You know which one I'm talking about here. And then we've got the tomatoes on the vine. I mean, it's just unbelievable that you guys are able to do this in a greenhouse. Big cukes, little cukes. Wow. Thank you so much for sending these. Delicious. Really appreciate it. >> Yeah. Well thank you for having them. It's a great little tree and it's something that I know you're going to enjoy. And I love for everybody to have it and there's not a person I haven't seen that hasn't enjoyed our tomatoes and peppers. >> Now tell me more about Nature Fresh Farms. Let's talk about your business I want to spend some time on that. We've got IoT, we got a data lifecycle. All kinds of cool stuff, scanners. Paint a picture for us. >> I like to even go... If you don't mind. I like to even go back to where our roots actually came from. So Peter Quiring, our owner actually was a builder by nature and he was actually back in the year 2000 really wanted to get into the greenhouse because he was a manufacturer. And he built our phase one facility back in 2000 under the concept that he said, "there's computers out there." And Peter will be the first one to say, "I don't know how to use them, "but I know that it can do a lot for us." So even back in 2000, we were starting to experiment with using the computers back then to control the greenhouse, to do much of the functionality. Then he bought it under the concept as our sister company, South Essex Fabricating that he would sell the greenhouse turnkey to somebody else. Well, talking to him and I've been around since about phase two. He basically said, "when I built phase three, "which is our first 32 acre range, I realized that is actually in the pepper business now," and he realized he was a grower and then he fell in love with the industry. And again, kept pushing how we can do things automated? How do we can do things? How do we get more yield, more everything out of what we do? And as a lover of technology he made it a great environment for everybody including the growers to work in and to just do something new. >> Well, I mean the thing that we know that as populations grow we're not getting more land. Okay (laughs). So, you have to get better yield and the answer is not to just pound vegetables with pesticides. So maybe talk about how you guys are different from sort of a conventional farming approach, just in terms of maybe your yield, how you treat the plants, how you're able to pick throughout the year, give us some insight there. >> So basically I'll start with through the lifecycle of a pepper. So it's basically planted at a propagator and then it comes to our facility and it comes in the little white boxes here behind me. And they actually are usually about that tall. They're about a foot tall. Maybe a little more when they come to us. And right from that point in time, we start keeping track of everything. How much we put water, how much water it doesn't take, what nutrients it takes, how much it weighs. We actually weigh the vines to know how much they are in real time. We do everything top to bottom. So we actually control the life cycle of the plant. On top of that, we also look and have a whole bio scout division. So it's a group of people that are starting to use AI to actually look at how the bugs are attacking the plants. And then at the same time, we release a good bug that will eventually die off to kill the bugs that are starting to harm the plant. So it basically allows us to basically do as close to natural way of growing a plant as possible without spraying or doing anything like that at night. It's actually funny 'cause there's a lot pictures out there and you think that a greenhouse, it's going to be wet in here. And actually for the most part, it is dry all the time. Like I'm very hot, it's very dry and it's just how we work. We don't let anything inside. We control everything in that plant's life. And now with our newest range, we even control how much light it gets. So we basically give it light all night too. And even some nights when it's a little days out, not like today, but when it's a little dark out and the sun's not up there, we'll actually make sure it gets more light to get that more yield out of it. So we can grow 24/7 12 months a year. >> Okay Keith. So it sounds like you're using data and AI to really inform you as to nature's best formula for the good bugs, the bad bugs, the lighting to really drive yields and quality. >> Yeah, we analyze, like I said, everything from the edge that we collect, like I said, we have over 2000 sensors out in the greenhouse and we keep expanding it more and more every year to collect everything from the length of the vine, the weight of the vine in real time. And we basically collect it from the day the plant is born to the day that we actually take it all out to be composted. We know how much light it got. Does it need to get light that day? We analyze everything in general and it allows us to take that data back in real time to make it better and to look at the past data to do better again. Like you hear, some times we have actually have a cart going by here now. That data from that cart, we'll go back to our growers and they will know how much weight they got out of that row in the next 15 to 20 minutes. So they can actually look, okay, how did that plant react to the sun, how's tomorrow? Does it need more nutrients? Does it need a little less? They take all that data from the core and make sure it's all accurate and as up to date as possible. >> So Keith, and maybe even you can give us approximations, but so how much acreage do you have? And how much acreage would you need with conventional farming techniques to get the kind of yields and quality that you guys are able to achieve? >> So we own 160 acres of greenhouse that's actually under glass. It's actually 200 acres total of land but what's 160 acres approximately of greenhouse that's actually under glass. 'A' we're always constantly growing. Our demand is up that that's why we grow so fast. Usually you're looking at both 12 to one. So for every foot squared of space, you're looking for equivalent is about 12 feet squared for a conventional farm. That's the general average. Mostly because we can harvest year round, we can continually harvest. We maximize the harvest amount and everything total. >> I'm also interested in your regime, your team. So obviously you're supporting from an IT perspective, but you've got all this AI going on. You've got this data life cycle. So what does the data team look like? >> We're actually... I always laugh though. I like to call our growers are basically data analysts. They're not really part of my IT team, but they basically have learned the role of how to analyze data. So we'll have basically one or two junior growers, per range. So probably about, I'd say about, we have about 10 to 12 junior growers and then one senior grower per whole farm. So probably about three or four senior growers at any one time. But my IT staff is actually about a team of four, five, including myself. And we are always constantly looking at how to improve data and how to automate the process. That's what drives us to do more. And that's where the robots even come in is every time we look at something, it's not even from an IT perspective, but even just from a picking perspective, how do we automate this? How do we do a better tomorrow? How do we continually clean this up? And it just never ends. And every year we look back, okay, it cost us a dollar per meter squared or per foot square for the people down South in America there now. We look at that and how do we do that better next year? How do we do better the next day? And it's a constant looking and it's something we look at refining and now that's why we're going so much into AI 'cause we want to not look at the data and decide what to do. We want the data to tell us what to do. >> You guys are on the cutting edge. I mean this is the future of farming. I wonder if we could talk about the IT, what does the IT group look like in the future of farming? I mean you guys, what's your infrastructure look like? Are you all in the cloud or you can't be in the cloud because this is really an extent of an IoT or an edge use case. Paint a picture of the IT infrastructure for us if you would. >> So the IT infrastructure it's a very large amount at the edge. We take a lot of the information from the edge and we bring it back to our core to do our analyzing. But for the most part, we don't really leverage the cloud much yet and most of it is on-prem. We are starting to experiment with moving out to the cloud. And a lot of it is, you'll laugh though, is because the farming and agriculture industry really was stagnant for a long time and not really stagnant, but just didn't really progress as fast as the rest of the world. So now they're just starting to catch up and realizing, wow, this is a growing industry. We can do a lot of cool things with technology in this range. And now it's just exploded. So I'm going to say in the next five to 10 years, you're going to see a lot more private clouds and things like that happening with us. I know we're right now starting to just look at creating with the VxRail, a private cloud, and a concept like that to start to test that water again of how to analyze and how to do more things onsite and in the cloud and leverage everything top to bottom. >> So you've got your own servers at the edge... So Intel based servers, what's your storage infrastructure look like? Maybe describe the network a little bit. >> Yap. Okay. So we are basically, I'll admit here, we are a Dell factory. We're basically everything top to bottom. Right now we're on an FX2, Dell FX2 platform. It's basically our core platform we've been using for the last five years. It does all of our analitics and stuff like that. And we have just transformed our unstructured data to Isilon. It's been one of the best things for us to clean that up and make things move forward. It was actually one of those things that management actually looked at me and kind of looked at me and said, "what are you nuts?" Because we basically bought our first Isilon and then four months later, I said, "I love this. I got to have more," because everybody loved it so much in the way of store things. So we actually doubled the size of it within four months, which was a great... It was actually very seamless to do, but we're now also in a position where the FX2 in that stage type of situation didn't quite work for us to expand it. It wasn't as easy to expand. So we wanted to get away that we could expand at a moment's notice. We can change, we can scale out much faster and do things easier. So that's why we're transforming to a VxRail to basically clean that up and allow us to expand as we grow. >> So you're essentially trying to replicate the agility and speed of the cloud but like you say, you're an edge use case. So you can't do everything in cloud. Is that the right way to think about it? You mentioned private cloud but just sort of cloud experience, but at the edge. >> Yeah. We try to keep everything at the edge. It just makes it a lot easier to control. Because we're so big. Think about it like you are bringing all this information back from everywhere. It's a lot of data to come back to one spot. So we're trying to push that more, to keep it at the edge so that we can analyze it right there in the moment instead of having to come back and do it but yeah. And I think you'll see in the next few years, a lot of change to the cloud, I think it'll start to be there, but again, like I said, the private cloud will probably be the way most will go. >> Okay. So I got to ask you then, I mean, you've really tested that agility over the last 60 days with this COVID pandemic. How were you able to respond? What role did data play? You had supply chain considerations. Obviously, you got a lot of online ordering going on. You got to get produce out. You've got social distancing. How were you able to handle that crisis? >> Well it was a really great thing for our team. Our team really came together in a great way. We had a lot of people that did have to go home and we started because we had so many ranges all over, already about a year and a half ago we started implementing an SD-WAN solution to allow us to connect to different areas and to do all kinds of stuff. So it was actually very quick for us to be able to send the others home. We used our VeloCloud SD-WAN to expand it. It was very seamless and we just started sending people home left, right and center. The staff that had to stay here, like the workers out in the greenhouse here now are offshore labor as we call it. They work great. They worked with at every moment of the day and they dug right in. We haven't lost heartbeat. Like actually our orders have gone up in the last... Through this COVID experience more than anything else. And it's really learned... It really helped from an IT perspective and I laugh about this and it's one of the greatest things about what I do, I love this moment, is where sometimes we were very hesitant to jump on this video collaboration. I said, "hey, that's a great way of doing this." But sometimes people they're very stuck in their ways and they love it and they're like, "I don't know about this whole team Zoom "and all that fun stuff," but because of this, they've now embraced it and it's actually really changed the way even they've worked. So in a way, it kind of sped up the processes of us becoming more agile that way in a way that would've taken a long time. They now love teams. They love being able to communicate that way. They love being able to just do a quick call. All that functionality has changed and even made us more efficient that way. (mumbles) >> How does this all affect your IT budget allocation? Did you get more budget? Was it flat budget? Did you have to shift budget to sort of work from home and securing the remote workers? Can you sort of describe that dynamic? >> So it did, I'll be true, there's no way around it to not up my budge. They basically said, "yep, "you have to do what you have to do. "We have to continue to function, "we cannot let our greenhouse go down "and what do you need to do to make it happen?" So I quickly contacted Dell and got things coming and improve our infrastructure as much as we could to get ready. I contacted (mumbles). I basically made it so that my team can support every single part of our facet from home if they actually had to go home. So for example, if I had to get stuck at home, I could do every single part of my job from home, including the growers as much as possible. So say our senior grower had to get home. I locked him up. He has to be able to see everything and do everything. So we actually expanded that very quickly and it was a cost to us. But again, there's no technology we didn't implement that we hadn't talked about before. We just hadn't said, "you know what? It's just not the right time to try that." And now we just went ahead and we just said, we got to do it now. And there's not one part of our aspect that we don't reuse. >> Was Dell able to deliver? Did they have supply constraint issues? I mean, I know there's been huge demand for that whole remote worker. Were able to get what you needed in time? >> Yeah. You know what, I think that we hit it a little ahead of the scope of when things started to go bad, our senior management, our president and all that. He basically said, "you know Keith, "we got to get ready on this. "We got to get some stuff coming." We never ran out of some things. The quirkiest thing and it is just a reality, the biggest thing was webcams was to kind of trying to get webcams. Other than that, there was issues with UPS and Purolator and FedEx because they were just inundated too. But for the most part, we kept everything moving. There wasn't a time that I was actually really waiting on something that we had to have. One of the other great things of our senior team that's here is they've really given me the latitude to say, "what do you need and how do you need to do it?" And so I have my own basically storage area of stuff everywhere. And my team does laugh at me 'cause they call me a hoarder and I basically have too much. And we were able to use either some older stuff or some newer stuff and combine it and we got everything running. There was only a little hiccups here and there but nothing ever is going to go perfect. >> Yeah. But it's enabling business results. We've asked a lot of it pros like yourself like what do you expect the shape of the recovery? And obviously our hearts go out to those small businesses that have been decimated. You're clearly seeing industries like airlines and hospitality and restaurants are obviously in rough shape, but there is a bifurcated story here. Some businesses and it sounds like in this camp where the pandemic was actually a tailwind, your online demand is up, food, vegetables, people... There were a lot of meat shortages. So people really turn to vegetables, is that right? Is that the shape of the recovery actually, is maybe not even V-shape, it's been a tailwind for Nature Fresh Farms. >> Yeah. You know what? It has been a tailwind and that's the right way to say it. We've just increased our yieldage. We've increased that, it's not unnew for us, that's been the biggest driving force for us is basically the demand for our product and building fast enough to keep up to that demand. Like we continually build and expand. We've got more ranges being built in the coming years like looking towards the 21, 22, 23 year. It's just going to just continue to expand and that is purely because of demand. And this COVID just again, escalated that little bit 'cause everybody's like, I really want the peppers and like you learned, we actually do have some tasty peppers and tomatoes. So it does make it a nice little treat to have at home for the kids. >> Well, it's an amazing story of tech meets farming. And as you said for years your industry kind of became quiet when it came to tech, but this is the future of farming, in my opinion. And Keith, thanks so much for coming on the CUBE and sharing the story of Nature Fresh Farms. >> Well, thank you for having me. It's been a great pleasure. >> Alright. Thank you for watching everybody this is Dave Vellante for the CUBE and we'll see you next time. (upbeat music)

>> Announcer: From theCUBE Studios in Palo Alto and Boston, connecting with thought leaders all around the world, this is a CUBE conversation. >> Hello, welcome back to theCUBE's coverage, CUBE Virtual's coverage, CUBE digital coverage, of AWS Summit, virtual online, Amazon Summit's normally in face-to-face all around the world, it's happening now online, follow the sun. Of course, we want to bring theCUBE coverage like we do at the events digitally, and we've got a great guest that usually comes on face-to-face, he's coming on virtual, Sanjay Poonen, the chief operating officer of VMware. Sanjay great to see you, thanks for coming in virtually, you look great. >> Hey, John thank you very much. Always a pleasure to talk to you. This is the new reality. We both happen to live very close to each other, me in Los Altos, you in Palo Alto, but here we are in this new mode of communication. But the good news is I think you guys at theCUBE were pioneering a lot of digital innovation, the AI platform, so hopefully it's not much of an adjustment for you guys to move digital. >> It's not really a pivot, just move the boat, put the sails up and sail into the next generation, which brings up really the conversation that we're seeing, which is this digital challenge, the virtual world, it's virtualization, Sanjay, it sounds like VMware. Virtualization spawned so much opportunity, it created Amazon, some say, I'd say. Virtualizing our world, life is now integrated, we're immersed into each other, physical and digital, you got edge computing, you got cloud native, this is now a clear path to customers that recognize with the pandemic challenges of at-scale, that they have to operate their business, reset, reinvent, and grow coming out of this pandemic. This has been a big story that we've been talking about and a lot of smart managers looking at projects saying, I'm doubling down on that, and I'm going to move the resources from this, the people and budget, to this new reality. This is a tailwind for the folks who were prepared, the ones that have the experience, the ones that did the work. theCUBE, thanks for the props, but VMware as well. Your thoughts and reaction to this new reality, because it has to be cloud native, otherwise it doesn't work, your thoughts. >> Yeah, I think, John, you're right on. We were very fortunate as a company to invent the term virtualization for an x86 architecture and the category 20 years ago when Diane founded this great company. And I would say you're right, the public cloud is the instantiation of virtualization at its sort of scale format and we're excited about this Amazon partnership, we'll talk more about that. This new world of doing everything virtual has taken the same concepts to whole new levels. We are partnering very closely with companies like Zoom, because a good part of this is being able to deliver video experiences in there, we'll talk about that if needed. Cloud native security, we announced an acquisition today in container security that's very important because we're making big moves in security, security's become very important. I would just say, John, the first thing that was very important to us as we began to shelter in place was the health of our employees. Ironically, if I go back to, in January I was in Davos, in fact some of your other folks who were on the show earlier, Matt Garman, Andy, we were all there in January. The crisis already started in China, but it wasn't on the world scene as much of a topic of discussion. Little did we know, three, four weeks later, fast forward to February things were moving so quickly. I remember a Friday late in February where we were just about to go the next week to Las Vegas for our in-person sales kickoffs. Thousands of people, we were going to do, I think, five or 6,000 people in Las Vegas and then another 3,000 in Barcelona, and then finally in Singapore. And it had not yet been categorized a pandemic. It was still under this early form of some worriable virus. We decided for the health and safety of our employees to turn the entire event that was going to happen on Monday to something virtual, and I was so proud of the VMware team to just basically pivot just over the weekend. To change our entire event, we'd been thinking about video snippets. We have to become in this sort of virtual, digital age a little bit like TV producers like yourself, turn something that's going to be one day sitting in front of an audience to something that's a lot shorter, quicker snippets, so we began that, and the next thing we began doing over the next several weeks while the shelter in place order started, was systematically, first off, tell our employees, listen, focus on your health, but if you're healthy, turn your attention to serving your customers. And we began to see, which we'll talk about hopefully in the context of the discussion, parts of our portfolio experience a tremendous amount of interest for a COVID-centered world. Our digital workplace solutions, endpoint security, SD-WAN, and that trifecta began to be something that we began to see story after story of customers, hospitals, schools, governments, retailers, pharmacies telling us, thank you, VMware, for helping us when we needed those solutions to better enable our people on the front lines. And all VMware's role, John, was to be a digital first responder to the first responder, and that gave tremendous amount of motivation to all of our employees into it. >> Yeah, and I think that's a great point. One of the things we've been talking about, and you guys have been aligned with this, you mentioned some of those points, is that as we work at home, it points out that digital and technology is now part of lifestyle. So we used to talk about consumerization of IT, or immersion with augmented reality and virtual reality, and then talk about the edge of the network as an endpoint, we are at the edge of the network, we're at home, so this highlights some of the things that are in demand, workspaces, VPN provisioning, these new tools, that some cases we've been hearing people that no one ever thought of having a forecast of 100% VPN penetration. Okay, you did the AirWatch deal way back when you first started, these are now fruits of those labors. So I got to ask you, as managers of your customer base are out there thinking, okay, I got to double down on the right growth strategy for this post-pandemic world, the smart managers are going to look at the technologies enabled for business outcome, so I have to ask you, innovation strategies are one thing, saying it, putting it place, but now more than ever, putting them in action is the mandate that we're hearing from customers. Okay I need an innovation strategy, and I got to put it into action fast. What do you say to those customers? What is VMware doing with AWS, with cloud, to make those innovation strategies not only plausible but actionable? >> That's a great question, John. We focused our energy, before even COVID started, as we prepared for this year, going into sales kickoffs and our fiscal year, around five priorities. Number one was enabling the world to be multicloud, private cloud and public cloud, and clearly our partnership here with Amazon is the best example of that and they are our preferred cloud partner. Secondly, building modern apps with microservices and cloud native, what we call app modernization. Thirdly, which is a key part to the multicloud, is building out the entire network stack, data center networking, the firewalls, the load bouncing in SD-WAN, so I'd call that cloud network. Number four, the modernization of workplace with an additional workspace solution, Workspace ONE. And five, intrinsic security from all aspects of security, network, endpoint, and cloud. So those five priorities were what we began to think through, organize our portfolio, we call them solution pillars, and for any of your viewers who're interested, there's a five-minute version of the VMware story around those five pillars that you can watch on YouTube that I did, you just search for Sanjay Poonen and five-minute story. But then COVID hit us, and we said, okay we got to take these strategies now and make them more actionable. Exactly your question, right? So a subset of that portfolio of five began to become more actionable, because it's pointless going and talking about stuff and it's like, hey, listen, guys, I'm a house on fire, I don't care about the curtains and all the wonderful art. You got to help me through this crisis. So a subset of that portfolio became kind of what was those, think about now your laptop at home, or your endpoint at home. People wanted, on top of their Zoom call, or surrounding their Zoom call, a virtual desktop managed easily, so we began to see Workspace ONE getting a lot of interest from our customers, especially the VDI part of that portfolio. Secondly, that laptop at home needed to be secured. Traditional, old, legacy AV solutions that've worked, enter Carbon Black, so Workspace ONE plus Carbon Black, one and two. Third, that laptop at home needs network acceleration, because we're dialoguing and, John, we don't want any latency. Enter SD-WAN. So the trifecta of Workspace ONE, Carbon Black and VeloCloud, that began to see even more interest and we began to hone in our portfolio around those three. So that's an example of where you have a general strategy, but then you apply it to take action in the midst of a crisis, and then I say, listen, that trifecta, let's just go and present what we can do, we call that the business continuity or business resilience part of our portfolio. We began to start talking to customers, and saying, here's our business continuity solution, here's what we could do to help you, and we targeted hospitals, schools, governments, pharmacies, retailers, the ones who're on the front line of this and said again, that line I said earlier, we want to be a digital first responder to you, you are the real first responder. Right before this call I got off a CIO call with the CIO of a major hospital in the northeast area. What gives me great joy, John, is the fact that we are serving them. Their beds are busting at the seam, in serving patients-- >> And ransomware's a huge problem you guys-- >> We're serving them. >> And great stuff there, Sanjay, I was just on a call this morning with a bunch of folks in the security industry, thought leaders, was in DC, some generals were there, some real thought leaders, trying to figure out security policy around biosecurity, COVID-19, and this invisible disruption, and they were equating it to like the World Wars. Big inflection point, and one of the generals said, in those times of crisis you need alliances. So I got to ask you, COVID-19 is impactful, it's going to have serious impact on the critical nature of it, like you said, the house is on fire, don't worry about the curtains. Alliances matter more than ever when you need to come together. You guys have an ecosystem, Amazon's got an ecosystem, this is going to be a really important test to the alliances out there. How do you view that as you look forward? You need the alliances to be successful, to compete and win in the new world as this invisible enemy, if you will, or disruptor happens, what's your thoughts? >> Yeah, I'll answer in a second, just for your viewers, I sneezed, okay? I've been on your show dozens of time, John, but in your live show, if I sneezed, you'd hear the loud noise. The good news in digital is I can mute myself when a sneeze is about to happen, and we're able to continue the conversation, so these are some side benefits of the digital part of it. But coming to your question on alliance, super important. Ecosystems are how the world run around, united we stand, divided we fall. We have made ecosystems, I've always used this phrase internally at VMware, sort of like Isaac Newton, we see clearly because we stand on the shoulders of giants. So VMware is always able to be bigger of a company if we stand on the shoulders of bigger giants. Who were those companies 20 years ago when Diane started the company? It was the hardware economy of Intel and then HP and Dell, at the time IBM, now Lenovo, Cisco, NetApp, DMC. Today, the new hardware companies Amazon, Azure, Google, whoever have you, we were very, I think, prescient, if you would, to think about that and build a strategic partnership with Amazon three or four years ago. I've mentioned on your show before, Andy's a close friend, he was a classmate over at Harvard Business School, Pat, myself, Ragoo, really got close to Andy and Matt Garman and Mike Clayville and several members of their teams, Teresa Carlson, and began to build a partnership that I think is one of the most incredible success stories of a partnership. And Dell's kind of been a really strong partner with us on private cloud, having now Amazon with public cloud has been seminal, we do regular meetings and build deep integration of, VMware Cloud and AWS is not some announcement two or three years ago. It's deep engineering between, Bask's now in a different role, but in his previous role, that and people like Mark Lohmeyer in our team. And that deep engineering allows us to know and tell customers this simple statement, which both VMware and Amazon reps tell their customers today, if you have a workload running on vSphere, and you want to move that to Amazon, the best place, the preferred place for that is VMware Cloud and Amazon. If you try to refactor that onto a native VC 2, it's a waste of time and money. So to have the entire army of VMware and Amazon telling customers that statement is a huge step, because it tells customers, we have 70 million virtual machines running on-prem. If customers are looking to move those workloads to Amazon, the best place for that VMware Cloud and AWS, and we have some credible customer case studies. Freddie Mac was at VMworld last year. IHS Markit was at VMworld last year talking about it. Those are two examples and many more started it, so we would like to have every VMware and Amazon customer that's thinking about VMware to look at this partnership as one of the best in the industry and say very similar to what Andy I think said on stage at the time of this announcement, it doesn't have to be now a trade-off between public and private cloud, you can get the best of both worlds. That's what we're trying to do here-- >> That's a great point, I want to get your thoughts on leadership, as you look at COVID-19, one of our tracks we're going to be promoting heavily on theCUBE.net and our sites, around how to manage through this crisis. Andy Jassy was quoted on the fireside chat, which is coming up here in North America, but I saw it yesterday in New Zealand time as I time shifted over there, it's a two-sided door versus a one-sided door. That was kind of his theme is you got to be able to go both ways. And I want to get your thoughts, because you might know what you're doing in certain contexts, but if you don't know where you're going, you got to adjust your tactics and strategies to match that, and there's and old expression, if you don't know where you're going, every road will take you there, okay? And so a lot of enterprise CXOs or CEOs have to start thinking about where they want to go with their business, this is the growth strategy. Then you got to understand which roads to take. Your thoughts on this? Obviously we've been thinking it's cloud native, but if I'm a decision maker, I want to make sure I have an architecture that's going to carry me forward to the future. I need to make sure that I know where I'm going, so I know what road I'm on. Versus not knowing where I'm going, and every road looks good. So your thoughts on leadership and what people should be thinking around knowing what their destination is, and then the roads to take? >> John, I think it's the most important question in this time. Great leaders are born through crisis, whether it's Winston Churchill, Charles de Gaulle, Roosevelt, any of the leaders since then, in any country, Mahatma Gandhi in India, the country I grew up, Nelson Mandela, MLK, all of these folks were born through crisis, sometimes severe crisis, they had to go to jail, they were born through wars. I would say, listen, similar to the people you talked about, yeah, there's elements of this crisis that similar to a World War, I was talking to my 80 year old father, he's doing well. I asked him, "When was the world like this?" He said, "Second World War." I don't think this crisis is going to last six years. It might be six or 12 months, but I really don't think it'll be six years. Even the health care professionals aren't. So what do we learn through this crisis? It's a test of our leadership, and leaders are made or broken during this time. I would just give a few guides to leaders, this is something tha, Andy's a great leader, Pat, myself, we all are thinking through ways by which we can exercise this. Think of Sully Sullenberger who landed that plane on the Hudson. Did he know when he flew that airbus, US Airways airbus, that few flock of birds were going to get in his engine, and that he was going to have to land this plane in the Hudson? No, but he was making decisions quickly, and what did he exude to his co-pilot and to the rest of staff, calmness and confidence and appropriate communication. And I think it's really important as leaders, first off, that we communicate, communicate, communicate, communicate to our employees. First, our obligation is first to our employees, our family first, and then of course to our company employees, all 30,000 at VMware, and I'm sure similarly Andy does it to his, whatever, 60, 70,000 at AWS. And then you want to be able to communicate to them authentically and with clarity. People are going to be reading between the lines of everything you say, so one of the things I've sought to do with my team, all the front office functions report to me, is do half an hour Zoom video conferences, in the time zone that's convenient to them, so Japan, China, India, Europe, in their time zone, so it's 10 o'clock my time because it's convenient to Japan, and it's just 10 minutes of me speaking of what I'm seeing in the world, empathizing with them but listening to them for 20 minutes. That is communication. Authentically and with clarity, and then turn your attention to your employees, because we're going stir crazy sitting at home, I get it. And we've got to abide by the ordinances with whatever country we're in, turn your attention to your customers. I've gotten to be actually more productive during this time in having more customer conference calls, video conference calls on Zoom or whatever platform with them, and I'm looking at this now as an opportunity to engage in a new way. I have to be better prepared, like I said, these are shorter conversations, they're not as long. Good news I don't have to all over the place, that's better for my family, better for the carbon emission of the world, and also probably for my life long term. And then the third thing I would say is pick one area that you can learn and improve. For me, the last few years, two, three years, it's been security. I wanted to get the company into security, as you saw today we've announced mobile, so I helped architect the acquisition of Carbon Black, very similar to kind of the moves I've made six years ago around AirWatch, very key part to all of our focus to getting more into security, and I made it a personal goal that this year, at the start of the year, before COVID, I was going to meet 1,000 CISOs, in the Fortune 1000 Global 2000. Okay, guess what, COVID happens, and quite frankly that goal's gotten a little easier, because it's much easier for me to meet a lot more people on Zoom video conferences. I could probably do five, 10 per day, and if there's 200 working days in a day, I can easily get there, if I average about five per day, and sometimes I'm meeting them in groups of 10, 20. >> So maybe we can get you on theCUBE more often too, 'cause you have access to a video camera. >> That is my growth mindset for this year. So pick a growth mindset area. Satya Nadella puts this pretty well, "Move from being a know-it-all to a learn-it-all." And that's the mindset, great company. Andy has that same philosophy for Amazon, I think the great leaders right now who are running these cloud companies have that growth mindset. Pick an area that you can grow in this time, and you will find ways to do it. You'll be able to learn online and then be able to teach in some fashion. So I think communicate effectively, authentically, turn your attention to serving your customers, and then pick some growth area that you can learn yourself, and then we will come out of this crisis collectively, individuals and as partners, like VMware and Amazon, and then collectively as a society, I believe we'll come out stronger. >> Awesome great stuff, great insight there, Sanjay. Really appreciate you sharing that leadership. Back to the more of technical questions around leadership is cloud native. It's clear that there's going to be a line in the sand, if you will, there's going to be a right side of history, people are going to have to be on the right side of history, and I believe it's cloud native. You're starting to see this emersion. You guys have some news, you just announced today, you acquired a Kubernetes security startup, around Kubernetes, obviously Kubernetes needs security, it's one of those key new enablers, disruptive enablers out there. Cloud native is a path that is a destination opportunity for people to think about, why that acquisition? Why that company? Why is VMware making this move? >> Yeah, we felt as we talked about our plans in security, backing up to things I talked about in my last few appearances on your show at VMworld, when we announced Carbon Black, was we felt the security industry was broken because there was too many point benders, and we figured there'd be three to five control points, network, endpoint, cloud, where we could play a much more pronounced role at moving a lot of these point benders, I describe this as not having to force our customers to go to a doctor and say I've got to eat 5,000 tablets to get healthy, you make it part of your diet, you make it part of the infrastructure. So how do we do that? With network security, we're off to the races, we're doing a lot more data center networking, firewall, load bouncing, SD-WAN. Really, reality is we can eat into a lot of the point benders there that I've just been, and quite frankly what's happened to us very gratifying in the network security area, you've seen the last few months, some firewall vendors are buying SD-WAN players, kind of following our strategy. That's a tremendous validation of the fact that the network security space is being disrupted. Okay, move to endpoint security, part of the reason we acquired Carbon Black was to unify the client side, Workspace ONE and Carbon Black should come together, and we're well under way in doing that, make Carbon Black agentless on the server side with vSphere, we're well on the way to that, you'll see that very soon. By the way both those things are something that the traditional endpoint players can't do. And then bring out new forms of workload. Servers that are virtualized by VMware is just one form of work. What are other workloads? AWS, the public clouds, and containers. Container's just another workload. And we've been looking at container security for a long time. What we didn't want to do was buy another static analysis player, another platform and replatform it. We felt that we could get great technology, we have incredible grandeur on container cell. It's sort of Red Hat and us, they're the only two companies who are doing Kubernetes scales. It's not any of these endpoint players who understand containers. So Kubernetes, VMware's got an incredible brand and relevance and knowledge there. The networking part of it, service mesh, which is kind of a key component also to this. We've been working with Google and others like Istio in service mesh, we got a lot of IP there that the traditional endpoint players, Symantec, McAfee, Trend, CrowdStrike, don't know either Kubernetes or service mesh well. We add now container security into this, we really distinguish ourselves further from the traditional endpoint players with bringing together, not just the endpoint platform that can do containers, but also Kubernetes service mesh. So why is that important? As people think about their future in containers, they'll want to do this at the runtime level, not at the static level. They'll want to do it at build time And they'll want to have it integrated with some of their networking capabilities like service mesh. Who better to think about that IP and that evolution than VMware, and now we bring, I think it's 12 to 14 people we're bringing in from this acquisition. Several of them in Israel, some of them here in Palo Alto, and they will build that platform into the tech that VMware has onto the Carbon Black cloud and we will deliver that this year. It's not going to be years from now. >> Did you guys talk about the-- >> Our capability, and then we can bring the best of Carbon Black, with Tanzu, service mesh, and even future innovation, like, for example, there's a big movement going around, this thing call open policy agent OPA, which is an open source effort around policy management. You should expect us to embrace that, there could be aspects of OPA that also play into the future of this container security movement, so I think this is a really great move for Patrick and his team, I'm very excited. Patrick is the CEO of Carbon Black and the leader of that security business unit, and he came to me and said, "Listen, one of the areas "we need to move in is container security "because it's the number one request I'm hearing "from our CESOs and customers." I said, "Go ahead Patrick. "Find out who are the best player you could acquire, "but you have to triangulate that strategy "with the Tanzu team and the NSX team, "and when you have a unified strategy what we should go, "we'll go an make the right acquisition." And I'm proud of what he was able to announce today. >> And I noticed you guys on the release didn't talk about the acquisition amount. Was it not material, was it a small amount? >> No, we don't disclose small, it's a tuck-in acquisition. You should think of this as really bringing us some tech and some talent, and being able to build that into the core of the platform of Carbon Black. Carbon Black was the real big move we made. Usually what we do, you saw this with AirWatch, right, anchor on a fairly big move. We paid I think 2.1 billion for Carbon Black, and then build and build and build on top of that, partner very heavily, we didn't talk about that. If there's time we could talk about it. We announced today a security alliance with top SIEM players, in what's called a sock alliance. Who's announced in there? Splunk, IBM QRadar, Google Chronicle, Sumo Logic, and Exabeam, five of the biggest SIEM players are embracing VMware in endpoint security, saying, Carbon Black is who we want to work with. Nobody else has that type of partnership, so build, partner, and then buy. But buy is always very carefully thought through, we're not one of these companies like CA of the past that just bought every company and then it becomes a graveyard of dead acquisition. Our view is we're very disciplined about how we think about acquisition. Acquisitions for us are often the last resort, because we'd prefer to build and partner. But sometimes for time-to-market reasons, we acquire, and when we acquire, it's thoughtful, it's well-organized within VMware, and we take care of our people, 'cause we want, I mean listen, why do acquisitions fail? Because the good people leave. So we're excited about this team, the team in Israel, and the team in Palo Alto, they come from Octarine. We're going to integrate them rapidly into the platform, and this is a good evidence of VMware investing more in security, and our Q3 earnings pulled, John, I said, sorry, we said that the security business was a billion dollar business at VMware already, primarily from network, but some from endpoint. This is evidence of us putting more fuel behind that fire. It's only been six, seven months and Patrick's made his first acquisition inside Carbon Black, so you're going to see us investing more in security, it's an important priority for the company, and I expect us to be a very prominent player in these three pillars, network security, endpoint security, endpoint is both client and the workload, and cloud. Network, endpoint, cloud, they are the three areas where we think there's lots of room for innovation in security. >> Well, we'll be watching, we'll be reporting and analyzing the moves. Great playbook, by the way. Love that organic partnering and then key acquisitions which you build around, it's a great playbook, I think it's very relevant for this time. The most important question I have to ask you, Sanjay, and this is a personal question, because you're the leader of VMware, I noticed that, we all know you're into music, you've been putting music online, kind of a virtual band. You've also hired a CUBE alumni, Victoria Verango from McAfee who also puts up music, you've got some musicians, but you kind of know how to do the digital moves there, so the question is, will the music at VMworld this year be virtual? >> Oh, man. Victoria is actually an even better musician than me. I'm excited about his marketing gifts, but I'm also excited to watch him. But yeah, you've heard him sing, he's got a voice that's somewhat similar to Sting, so we, just for fun, in our Diwali, which is an Indian celebration last year, Tom Corn, myself, and a wonderful lady named Divya, who's got a beautiful voice, had sung a song, which was off the soundtrack of the Bollywood movie, "Secret Superstar," and we just for fun decided to record that in our three separate homes, and put that out on YouTube. You can listen, it's just a two or three-minute run, and it kind of went a little bit viral. And I was thinking to myself, hey, if this is one way by which we can let the VMware community know that, hey, you know what, art conquers COVID-19, you can do music even socially distant, and bring out the spirit of VMware, which is community. So we might build on that idea, Victoria and I were talking about that last night and saying, hey, maybe we do a virtual music kind of concert of maybe 10 or 15 or 20 voices in the various different countries. Record piece of a song and music and put it out there. I think these are just ways by which we're having fun in a virtual setting where people get to see a different side of VMware where, and the intent here, we're all amateurs, John, we're not like great. There are going to be mistakes in this music. If you listen to that audio, it sounds a little tinny, 'cause we're recording it off our iPhone and our iPad microphone. But we'll do the best we can, the point is just to show the human spirit and to show that we care, and at the end of the day, see, the COVID-19 virus has no prejudice on color of skin, or nationality, or ethnicity. It's affecting the whole world. We all went into the tunnel at different times, we will come out of this tunnel together and we will be a stronger human fabric when we're done with this, We shall absolutely overcome. >> Sanjay, give us a quick update to end the segment on your thoughts around VMworld. It's one of the biggest events, we look forward to it. It's the only even left standing that theCUBE's been to every year of theCUBE's existence, we're looking forward to being part of theCUBE virtual. It's been announced it's virtual. What are some of the thinking going on at the highest levels within the VMware community around how you're going to handle VMworld this year? >> Listen, when we began to think about it, we had to obviously give our customers and folks enough notice, so we didn't want to just spring that sometime this summer. So we decided to think through it carefully. I asked Robin, our CMO, to talk to many of the other CMOs in the industry. Good news is all of these are friends of ours, Amazon, Microsoft, Google, Salesforce, Adobe, and even some smaller companies, IBM did theirs. And if they were in the first half of the year, they had to go virtual 'cause we're sheltered in place, and IBM did theirs, Okta did theirs, and we began to watch how they were doing this. We're kind of in the second half, because we were August, September, and we just sensed a lot of hesitancy from our customers that wanted to get on a plane to come here, and even if we got just 500, 1,000, a few thousand, it wasn't going to be the same and there would always be that sort of, even if we were getting back to that, some worry, so we figured we'd do something that might be semi-digital, and we may have some people that roam, but the bulk of it is going to be digital, and we changed the dates to be a little later. I think it's September 20th to 29th. Right now it's all public now, we announced that, and we're going to make it a great program. In some senses like we're becoming TV producer. I told our team we got to be like Disney or ESPN or whoever your favorite show is, YouTube, and produce a really good several-hour program that has got a different way in which digital content is provided, smaller snippets, very interesting speakers, great brand names, make the content clear, crisp and compelling. And if we do that, this will be, I don't know, maybe it's the new norm for some period of time, or it might be forever, I don't know. >> John: We're all learning. >> In the past we had huge conferences that were busting 50, 70, 100,000 and then after the dot-com era, those all shrunk, they're like smaller conferences, and now with advent of companies like Amazon and Salesforce, we have huge events that, like VMworld, are big events. We may move to a environment that's a lot more digital, I don't know what the future of in-presence physical conferences are, but we, like others, we're working with AWS in terms of their future with Reinvent, what Microsoft's doing with Ignite, what Google's doing with Next, what Salesforce's going to do with Dreamforce, all those four companies are good partners of ours. We'll study theirs, we'll work together as a community, the CMOs of all those companies, and we'll come together with something that's a very good digital experience for our customers, that's really what counts. Today I did a webinar with a partner. Typically when we did a briefing in our briefing center, 20 people came. There're 100 people attending this, I got a lot more participation in this QBR that I did with this SI partner, one of the top SIs in the world, in an online session with them, than would I have gotten if they'd all come to Palo Alto. That's goodness. Should we take the best of that world and some physical presence? Maybe in the future, we'll see how it goes. >> Content quality. You know, you know content. Content quality drives everything online, good engagement creates community, that's a nice flywheel. I think you guys will figure it out, you've got a lot of great minds there, and of course, theCUBE virtual will be helping out as we can, and we're rethinking things too-- >> We count on that, John-- >> We're going to be open minded to new ideas, and, hey, whatever's the best content we can deliver, whether it's CUBE, or with you guys, or whoever, we're looking forward to it. Sanjay, thanks for spending the time on this CUBE Keynote coverage of AWS Summit. Since it's digital we can do longer programs, we can do more diverse content. We got great customer practitioners coming up, talking about their journey, their innovation strategies. Sanjay Poonen, COO of VMware, thank you for taking your precious time out of your day today. >> Thank you, John, always a pleasure. >> Thank you. Okay, more CUBE, virtual CUBE digital coverage of AWS Summit 2020, theCUBE.net is we're streaming, and of course, tons of videos on innovation, DevOps, and more, scaling cloud, scaling on-premise hybrid cloud, and more. We got great interviews coming up, stay with us our all-day coverage. I'm John Furrier, thanks for watching. (upbeat music)

>> From theCUBE studios in Palo Alto and Boston, connecting with thought leaders all around the world, this is a CUBE Conversation. >> Hello, everybody, this is Dave Vellante, and welcome to this breaking analysis. I'm here with Erik Bradley, who's the managing director of ETR and runs their VENN program. Erik, good to see you. >> Very nice to see you too, Dave. Hope you're doing well. >> Yeah, I'm doing okay, hanging in there. You know, you guys in New York are fighting the battle, looks like we're making some progress here, so all the best to you and your family and the wider community. I'm really excited to have you on today because I had the pleasure of sitting in on a CIO/CISO panel last week and we're going to explain sort of what that's all about but one of the things that ETR does that I really like is they go deeper with anecdotal information, and it's almost like in depth interviews in these round tables. So they compliment their quarterly surveys and their other drilldown surveys with other anecdotal information from people in their communities, so it's a tried and true survey practice that adds some color to the data set. So guys, if you'd bring up the agenda, I want to share with the audience what we're going to talk about today. So, we'll talk a little bit about, you know, we just did intros. I wanted to ask Erik what ETR VENN is and then we will go through some of the guests, but if we go back to Erik, explain a little bit about VENN and the whole process, and how you guys do that? >> Yes, sure we should hire you for marketing, you just did a great job actually describing that, but about three years ago, what we decided was, ETR does an amazing job collecting the data. It can tell you what's happening, who it's happening to, and when it's happening, but it can't always tell you why it's happening. So leveraging a lot of my background in 20 plus years in journalism and the institution of Wall Street research, we decided to take the ETR community, the people that actually take the surveys and start doing interviews with them, and start doing events with them. And in enable to doing that, we're basically just trying to complement the survey findings and the data. So what we always say is that ETR will give you the quantitative answer and VENN will give you the qualitative answer. >> Now guys, let's bring up the agenda slide again, let's take a look at the folks that participated in the round table, now, for ETR's clients, they actually know the names and the titles and well the company that these guys work for. We've anonymized it for the public, but you had a CIO of a global auto supplier, a CISO of a diversified holdings firm who actually had some hospitality exposure, but also some government contract manufacturing exposure, a chief architect of a software ISV, and a VP and CISO of a global hospitality resort chain. So you had three out of the four, Erik were really in industries that are getting hit hard, obviously you know the software company, may be a little bit better but, maybe you could add some color to that? >> Well actually the software company unfortunately was getting hit hard as well because they're a software ISV that actually plays into the manufacturing space as well so this particular panel of CIOs and CISOs were actually in a very hard hit industries and are going to make sure we do two more follow ups with different industry verticals to make sure we're getting a little bit of a wider berth and collect all of that information in a better way. But coming back to this particular call the whole reason we did this and as you know you spoke to my colleague and friend Sagar Kadakia who is the director of research for ETR. And we were nimble enough to actually change our survey while it was in the field to start collecting data on what the real time impact was on the COVID-19 pandemic. We were able to take that information, extrapolate it and then say, okay, let's start reaching out to these people and dig deeper, find out why it's happening and even more so is it permanent? And which vendors are going to win and which vendors might lose from it? So that was the whole reason we set up a series of calls, we've only conducted one so far, we have another one this coming Tuesday as well with four entirely new panelists that are going to be from different industry verticals 'cause as you astutely pointed out, these verticals were very hard hit and not all of them are as hard as others, so it's important to get a wider cross-section. >> So guys, let's take a look at some of the budget impacts, the anecdotal sort of evidence that we gathered here, so let me just scan through it and then Erik, I'll ask you to comment. So, I mean like Erik said, some hard hit industries. All major projects, anything sort of next-gen have been essentially shelved, that was the ISV and then another one we cut at least 70% of the big projects moving forward, he mentioned ServiceNow actually called him out, but ServiceNow is a SaaS company, probably you know weather the storm here, but he did say, we've put that on hold. The best comment you know As-a-Service has Saved our Saas, (laughs) that one's great. And then we're going to get into some of the networking commentary, some really interesting things about how to support the work from home, you know we're kind of shifting from a hardened top into users, remote workers and then a lot of commentary on security, so you know that's sort of a high level scan and there's just so much information here, Erik but maybe you could sort of summarize on some of those, that commentary? >> Yeah, we should definitely dig in to each of those sectors a little more, but to summarize what we're seeing here was the real winners and losers are clear. Not everyone was prepared to have a work from home strategy. Not everyone was prepared to send their workers out, their VPN didn't have enough bandwidth so there was a real quick uptake in spending, but longer term we're starting to see that these changes will become more permeant. So the real winners and losers right now, we're going to see on the losers side traditional networking, the MPLS networking is in a lot of trouble according to all the data and the commentary that we're seeing, it's expensive, it's difficult to ramp up bandwidth as quickly as you need and it doesn't support remote. So we're seeing that lose out and the winners there are in the SD-WAN space, it's going to be impossible to ignore that going forward and some of our CIO and even CISO panelists said that change will be permanent. Also we're seeing at the same time, what they were calling a run SaaS and cloud, now we know these trends obviously were already happening but they're being exacerbated, they're happening even more quickly and more strong and I don't see that changing any time soon. That of course is at the expense of data centers, whether it be your own or hosted. Which has huge ramifications on on-prem hardware, even the firewall providers. So what we're seeing here is obviously we know things are going to be impacted by this situation, we didn't necessarily expect all of our community members and IT decision makers to talk about them being possibly permanent, so that on a high level was something that was extremely interesting. And the last one that I would bring up is that as we make this shift towards working from home, towards remote access, you also have to align yourself with the security that can support that. And one of the things that we're seeing in our data side on ETR, is a widening bifurcation between the next-gen security vendors and the more traditional security or the legacy security players, that bifurcation just keeps getting wider and wider and this situation could be the last straw. >> So I want to follow up on a couple of those things, you talked about sort of the network shift and toward SD-WAN, what people have described to me is that they've got a hardened top, it's a hierarchal network, it's very well understood, and it's safe right, and now all of a sudden you got all these remote workers and so you've got to completely sort of rethink your whole network architecture, the other thing I want to grill into is your cloud commentary. There's a comment that I saw Erik, that really stood out, one of the folks said, I would like to see the data centers be completely deleted, if you will or closed down, I mean I think we're going to see you know, a lot more of this, obviously. Not only from the standpoint of, and you heard this a lot the kind of pay by the drink, but just generally getting rid of all that sort of so called non-differentiated heavy lifting as we often hear about. >> That is a extreme comment, I don't think everyone feels that way, but yes, the comment was made and we've heard that comment from other people as you and I both know the larger the enterprise the harder that is to go completely SaaS, but yeah, when a situation like this happens and seeing the inflexibility of their on-prem infrastructure, yes it becomes something that really has to be addressed and it can become a permanent change, I was also shocked about that comment. That gentleman also stated that his executives outside of the IT area, the CEO, the CFO had never ever, ever wanted to discuss cloud, they did not want to discuss work from home, they did not want to discuss remote access. He said that conversation has changed immediately and to the credit of the actual IT companies out there, the technology companies, they're doing everything they can with this opportunity to make that happen. >> Yeah and so, right, I mean the whole work from home conversation that's to your point earlier, Erik, big chunks of COVID, you know the post COVID world are going to remain permanent, guys bring up the SaaS slide if you will, the SaaS commentary "As-a-Service-Saved our SaaS" as the wittiest quip award according to ETR, you know but you had, it was very interesting to hear folks, in fact I think somebody even called out, hey you know we expected Oracle to be auditing us but they're actually being very supportive as is IBM, SalesForce was an interesting comment Erik, one of the folks said they would share accounts you know on-prem but when they all do the work from home they had to actually buy some more. You also got Cisco with big props, Microsoft was called out, a lot of organizations actually allowing them to defer payments, so the SaaS vendors actually got very high marks, didn't they? >> They really did and even I wrote that summary and it was difficult to write that about Oracle because we all know that they're infamous for auditing their own customers in 2009, right after we we came out of the financial crisis. They have notoriously been a bad act, I don't know if they found religion and they decided to be nice to their customers, but every single person mentioned them as one of the vendors that was actually helping. That was very shocking. And then we all know that when bad situations happen people become opportunistic and right now it's really seeming that the SaaS vendors understand that they need a longterm relationship with these customers and they're being altruistic instead which is really nice to see. >> Yeah, I think the, I think anybody with a cloud realizes that hey, we have an opportunity here, the lifetime value of that customer whereas maybe in 2009 when Oracle didn't have a cloud they had to get people in a headlock to try to preserve their you know income statement. If we, let's go to the networking drilldown guys, that next slide, because Fortinet, some of the things that we've been reporting on is the sort of divergence in valuations between Fortinet and Palo Alto before this whole thing hit. Fortinet has done a really good job with it's cloud offerings, Palo Alto struggled a little bit with trying to figure out the sales compensation, is maybe a little bit behind, although both companies got strong props and I've talked to a number of customers and Palo Alto's going to be in the mix, but Fortinet from a cloud standpoint seems to be doing quite well, obviously networking, you know Cisco is the big gorilla there, but so and we also got call outs from guys like Trend Micro, which was interesting from some of the folks so your thoughts on this Erik? >> Yeah, I'll start in the networking side because this is something that I really, I've dug into quite amount in not only this panel but a lot of interviews and it really seems as if as networking refresh starts to come up and it's coming up with a lot of large importers, when your network refresh comes up, people are going to do an RFP for SD-WAN. They are sick and tired of paying MPLS network vendors and they really want to look at something else. That was even prior to this situation. Now what we're hearing is this is a permanent change, I particularly had one person say, I wanted to find this quote real quickly if I can, but basically they were basically saying that from a permanency perspective, the freedom from MPLS will reduce our network spend by over half, while more than doubling or tripling our bandwidth. You can't ignore that, you're going to save me money and triple my bandwidth. And hey, by the way, my refresh is due, it's something that's coming and it's going to happen. And yes you mentioned a few, right, there's Viptela, there's VeloCloud, there's some big players like Cisco. But Palo Alto just acquired CloudGenix in the midst of all of this. They just went and got an SD-WAN player themselves and they just keep acquiring a portfolio to shift from their on-prem to next-gen. It's going to take some time, 'cause 70% plus of their revenue is still on-prem hardware, but I do believe that their portfolio that they're creating is the way the world is moving and that's just one comment on the traditional networking versus the next-gen SD-WAN. >> And the customers have indicated you know it's not easy just to get off of their MPLS networks. I mean it takes time, it's like slowly pulling off the bandaid, but like many things COVID-19 is sort of accelerating that, we haven't talked about digital transformation, that came up. As a maybe more strategic initiative, but one that you know very clearly has legs. >> You know David, it's very simple, you just said it, people, when things are going well and they're comfortable they don't change and that's the same for an enterprise or a company, hey everything's great, our revenue's fine, why would we do this? We'll worry about that next year. Then something like this happens and you realize wow, we've been dragging our feet. That digital transformation that we've been talking about and we've been a little bit slow to accept, we need to accept it, we need to move now. And yes, it was another one of the major themes and it sounds silly for researchers like you and I, because we know this is a theme, we know cloud adoption is there, we know digital transformation is there, but there are still a lot of people that haven't moved as quickly as they should and this is going to be that final catalyst to get them there without a doubt. Quickly on your point of Fortinet, I was actually very impressed with the commentary that came from that because Fortinet is sometimes one of those names that you think of that maybe plays in a smaller pool or isn't as big as some of the 800 pound gorillas out there, but in other interviews besides this I heard the phrase point of 40 everything, so through our R&D and through acquisitions, Fortinet has really expanded their portfolio. And right now is their time to shine because when you have smaller satellite you know offices and branches that you need to connect, they're really, really good at it. And you don't always want to call a Palo Alto and pay that price, when you have smaller branch offices and I actually I was glad you brought up Fortinet because it's not a name that we get to herald that often and it was deserving from this panel. >> Yeah and you know companies that can secure gateways, secure endpoints are obviously going to have momentum, Zscaler came up, you know I think that's and I tell you looking at I've done a couple of breaking analysis on security, and Fortinet has been strong in two dimensions, you know ETR as our audience is I think getting to know, we really look at two key metrics, one is a net score which is a measure of spending momentum and the other is market share, which is a measure of pervasiveness, and companies like Fortinet in security, you know show up on both of those dimensions so it's notable. >> Yes, it certainly is, it is and I'm glad you brought up Zscaler too, very recently by strong request we did a very in depth research on Zscaler versus Palo Alto Prisma access. And they were very interested and this was before all this happened. You know does Palo Alto have a chance of catching up, taking share from Zscaler? And I've had the pleasure myself personally hosting Jay, the CEO of Zscaler at an event in New York City. And I have nothing but incredible respect for the company. But what we found out through this research is Zscaler at the moment their technology is still ahead according to their answers there is no doubt, however there doesn't seem to be any real secret sauce that will stop Palo Alto from catching up. So we do believe that parody of a feature set will shrink over time and then it'll come down to Palo Alto who obviously has a wider end-user interface. Now, what's happening today might change that because if I had to make a decision right now for my company on secure web gateway, I'm still probably going to got to Zscaler, it's the name. If I had to choose that in a year from now, Palo Alto might have had a better chance, so in this panel as you brought up, Zscaler was mentioned numerous times as just the wave of the future along with CASB Brokers, right, whether you're talking about a Netskope or Forcepoint, all those people that also play in the CASB space, to secure your access, zero trust is no longer a marketing hype term, it is real and it is becoming more real by the week. >> And so I want to kind of end on one of the other comments that really struck me because we're constantly talking about okay, do you go with a portfolio of a suite of services or do you go with best of breed, what about startups? Are startups more risky in a crisis like this? And one of your panelists, I just loved his comment, he said, one of the things that I've always done, he said, you always hear about the guy, oh we're going to to the garden, we're going to check out the magic water, we'll pick out three guys in the upper right hand corner and test them out, he says, one of the things that I've always liked to do, is I'll pick two from the upper right, and I'll take one from the lower left, one of the emerging techs and I'll give them a shot, they won't win every time but then he called out FireEye as one of the organizations that he found early that gave them competitive advantage. >> Right. >> Love that comment. >> It's a great comment and honestly if you're in charge of procurement, you'd be stupid not to do that. Not only just to see what the technology is, but now I can play you off the big guys because I have negotiation leverage and I can say, oh well I can always just take their contract. So it's silly not to do it from a business perspective, but from a technology perspective what we kept hearing from these people with the smaller vendors and my partner Peter Steube, my colleague and I we did the host together, we asked this question, really believing that the financial insecurity of the moment in the times would make smaller vendors not viable. We heard the exact opposite, what our panelists said was no, I'd be happy to work with a smaller vendor right now because they're going to give me pricing flexibility, they're going to work with me right now, I don't need to pay them upfront because we're seeing a permanent shift from CAPEX to OPEX and the smaller vendors are willing to work with me and I can pay them later. So we were actually surprised to hear that and glad to hear it because to connect to your other point, the other person who was talking about security in a platform approach versus best of breed, he said listen, platform approaches you're already with the vendor you can bundle a little bit, but the problem is if you're just going to acquire a new technology every time there's a new threat, the bad guys are just going to switch the threat and you can't acquire indefinitely so therefore best of breed with security will always beat platform and that's kind of a message to Palo Alto and Cisco in my opinion because they seem to be the ones fighting that out, even Microsoft now trying to say that they're a platform approach in security. >> Wow and it says to me the security business is going to as we predicted is going to stay fragmented because you're still going to get that best of breed, you know just like cloud is going to be fragmented and it's you know multiple vendors, ever since I've been in this business people are trying to consolidate the number of vendors but technology moves so quickly, it gives competitive advantage, Erik, awesome thank you so much for joining us, I'm looking forward to next Tuesday with the next VENN and love to have you back and talk about it any time, you're a great guest, thanks so much. >> Certainly! I'll do my best to get a better AV connection the next time guys, I apologize for that, but it was great talking to you guys. >> Hey, we're all learning you know, so thank you everybody for watching, this Dave Vellante for theCUBE and we'll see you next time. (upbeat music)

>> From theCUBE Studios in Palo Alto, in Boston connecting with alt leaders all around the world, This is a CUBE conversation. >> Hello everybody, this is Dave Vellante and welcome to this Breaking Analysis. I'm here with Erik Bradley, who's the managing director of ETR and runs their VEN program. Erik good to see you. >> Very nice to see you too Dave. Hope you're doing well. >> Yeah, I'm doing okay hanging in there. You know, you guys in New York are fighting the battle. Looks like we're making some progress here so, you know, all the best, you and your family and the wider community. I'm really excited to have you on today because I had the pleasure of sitting in on a CIO/ CISO panel last week. And we're going to explain sort of what that's all about, but one of the things ETR does that I really like is they go deeper with anecdotal information and it's almost like in-depth interviews in these round tables. So they compliment their quarterly surveys, and their other drill down surveys, with other anecdotal information for people in their community. So it's a tried and true survey practice that adds some color to the dataset. So guys if you bring up the agenda, I want to share with the audience what we're going to talk about today. So, we'll talk a little bit about, you know we just did intros, I want to ask Erik, what ETR VENN is and then we'll go through some of the guests, but if we go back to Erik, explain a little bit about VENN and the whole process and how you guys do that. >> Yeah sure, we should hire you for marketing. You just did a great job, actually, describing that, but about three years ago what we decided was, ETR does an amazing job collecting the data. It can tell you what's happening, who it's happening to and when it's happening. But it can't always tell you why it's happened. So leveraging a lot of my background in twenty-plus years in journalism and institutional Wall Street research, we decided to take the ETR community, the people that actually take the surveys, and start doing interviews with them and start doing events with them. And enable to doing that, we're basically just trying to compliment the survey findings and the data. So what we always say is that ETR will always give you the quantitative answer and VENN will give you the qualitative answer. >> Now guys, let's bring up the agenda slide again, let's take a look at the folks that participated in the round table. Now, for ETR's clients, they actually know the names and the titles and well the company that these guys work for. We've anonymized it for the public. But you had a CIO of a Global Auto Supplier, a CISO of a Diversified Holdings Firm, who actually had some hospitality exposure but also some government contract manufacturing exposure. Chief Architect of a Software ISV and a VP and CISO of a Global Hospitality Resort Chain. So you had three out of the for, Erik, were really in industries that are getting hit hard. Obviously the software company maybe a little bit better. But maybe you can add some color to that. >> Well actually the software company, unfortunately, was getting hit hard as well because they're a software ISV that actually plays into the manufacturing space as well. So, this particular panel of CIOs and CISOs were actually in a very hard hit industries. And are going to make sure we do two more follow-ups with different industry verticals to make sure we're getting a little bit of a wider berth and collect all of that information in a better way. But coming back to this particular call, the whole reason we did this, and as you know, you spoke to my colleague and friend, Sagar Kadakia, who is the Director of Research for ETR, and we were nimble enough to actually change our survey while it was in the field, to start collecting data on what the real-time impact was on the COVID-19 pandemic. We were able to take that information, extrapolate it, and then say okay let's start reading out to these people and dig deeper. Find out why it's happening and even more so, is it permanent? And which vendors are going to win and which vendors might lose from it. So that was the whole reason we set up the series of calls. We've only conducted on so far. We have another one this coming Tuesday as well with four entirely new panelists that are going to be from different industry verticals because, as you astutely pointed out, these verticals were very hard hit and not all of them are as hard as others. So it's important to get a wider cross-section. >> So, guys let's take a look at some of the budget impacts the anecdotal evidence that we gathered here. So let me just scan through it and then Erik, I'll ask you to comment. So, you know, like Erik said, some hard hit industries. All major projects, anything sort of next-generation, have been essentially shelved. That was the ISV. And then another one, we cut at least 70% of the big projects moving forward. He mentioned ServiceNow actually calls them out, but the ServiceNow is a SaaS company they'll probably, you know, weather the storm here. But he did say we've put that on hold. The best comment, you know, "As-a-service has Saved our SaaS." (Erik laughs) That one's great. And then we're going to get into some of the networking commentary. Some really interesting things about how to support the work from home. You know, kind of shifting from a hardened top into remote workers. And then a lot of commentary on security. So, you know, that's sort of a high level scan and there's just so much information here Erik, but maybe you could sort of summarize on some of that commentary. >> Yeah, we should definitely dig into each of those sectors a little more, but to summarize what we're seeing here was the real winners and losers are clear. Not everyone was prepared to have a work from home strategy. Not everyone was prepared to send their workers out. Their VPN wasn't, they didn't have enough bandwidth. So there was a real quick uptick in spending, but longer term we're starting to see that these changes will become more permanent. So the real winners and losers right now, we're going to see on the loser's side traditional networking. The MPLS networking is in a lot of trouble according to all the data and the commentary that we're seeing. It's expensive, it's difficult to ramp to up bandwidth as quickly as you need and it doesn't support remote. So we're seeing that lose out and the winners there are in the SD-WAN space. It's going to be impossible to ignore that going forward and some of our CIO and CISO panelists said that change will be permanent. Also, we're seeing, at the same time, what they were calling a "SaaS and Cloud". Now, we know these trends obviously were already happening but they're being exacerbated. They're happening even more quickly and more strong. And I don't see that changing any time soon. That, of course, is at the expense of network, I'm sorry, data centers. Whether it be your own or hosted. Which has huge ramifications on on-prem hardware. Even the firewall providers. So what we're seeing here is obviously we know things are going to be impacted by this situation. We didn't necessarily expect all of our community members and IT decision-makers to talk about them being possibly permanent. So that on a high level was something that was extremely interesting. And the last one that I would bring up is that as we make this shift towards working from home, towards remote access, you also have to align yourself with the security that can support that. And one of the things that we're seeing in our data side on ETR, is a widening bifurcation between the next-generation security vendors and the more traditional security or the legacy security players. That bifurcation just keeps getting wider and wider and this situation could be the last straw. >> So I want to follow up on a couple of those things. You're talking about sort of the network shift you know, towards the SD-WAN. What people have described to me is that they got a, you know, a hardened top. It's a hierarchical network. It's very well understood and it's safe, right? And now all of a sudden you got all those remote workers and so you've got to completely soft of rethink your whole network architecture. The other thing I want to drill into is your Cloud commentary. There's a comment that I saw, Erik, that really stood out. One of the folks said, "I would like to see the data centers "be completely deleted, if you will, or closed down." I think we're going to see, you know, a lot more of this obviously. Not only from the standpoint of, and you heard this a lot, the kind of paid by the drink. But just generally getting rid of all that sort of so-called non-differentiated heavy-lifting as we often hear about. >> That is a extreme comment. I don't think everyone feels that way. But, yes, the comment was made and we've heard the comment from other people. As you and I both know, the larger the enterprise the harder that is to go completely SaaS. But yeah, when a situation like this has and see the inflexibility of their on-prem infrastructure, yes it becomes something that really has to be addressed and it can become a permanent change. I was also shocked about that comment. That gentleman also stated that his executives outside of the ITs area, the CEO, the CFO, had never ever, ever wanted to discuss Cloud. They did not want to discuss work from home. They did not want to discuss remote access. He said that conversation has changed immediately and to the credit of the actual IT companies out there, the technology companies, they're doing everything they can with this opportunity to make that happen. >> Yeah, and so you're right the whole work from home conversation. To your point earlier, Erik, big chunks of COVID, the post-COVID world are going to remain permanent. Guys bring up the SaaS slide if you will. The SaaS commentary, "As-a-Service Saved our SaaS." "The wittiest quip award" going to the ETR. You know, but you had, what's very interesting to hear folks, in fact I think somebody even called out, "Hey," you know, "we expected Oracle to," you know, "be auditing us but they're actually being supportive "as is IBM." Salesforce was an interesting common, Erik. One of the folks said they would share accounts on-prem, but when they all do the work from home they had to actually buy some more. You also got Cisco with big props. Microsoft was called out. A lot of organizations actually allowing them to defer payments. So the SaaS vendors actually got very high marks didn't they? >> They really did and even I wrote that summary and it was difficult to write that about Oracle because we all know that they're infamous for auditing their own customers in 2009 right after we came out of financial crisis. They have notoriously been a-- I don't know if they found religion and they decided to be nice to their customers, but every-single person mentioned them as one of the vendors that was actually helping. That was very shocking. And we all know that when bad situations happen people become opportunistic. And right now it's really seeming that the SaaS vendors understand that they need a longterm relationship with these customers and they're being altruistic instead. Which is really nice. >> Yeah I think that anybody with a Cloud realizes that hey, we have an opportunity here that the lifetime value of that customer, whereas maybe in 2009 when Oracle didn't have a Cloud, they had to get people in a headlock to try to persevere their, you know, income statement. Let's go to the networking drill down guys, that next slide because Fortinet, some of the things we've been reporting on is the sort of divergence in evaluations between Fortinet and Palo Alto before this whole thing hit, Fortinet has done a really good job with its Cloud offerings. Palo Alto struggles a little bit with trying to figure out the sales compensation, is maybe a little bit behind. Although both companies got strong props and I've talked to a number of customers, Palo Alto is going to be in the mix. Fortinet, from a Cloud standpoint, seems to be doing quite well? Obviously networking, Cisco is the big gorilla there. But we also got call outs from guys like Trend Micro which was interesting, from some of the folks. So, your thoughts on this Erik. >> Yeah, I'll start on the networking side because this is something that I've really, I've dug into quite amount, in not only this panel, but a lot of interviews and it really seems as if as networking refresh starts to come up, and it's coming up with a lot of large enterprises, when your network refresh comes up people are going to do an RFP for SD-WAN. They are sick and tired of paying MPLS network vendors and they really want to look at something else. That was even prior to this situation. Now what we're hearing is this is a permanent change. I particularly had one person say, I wanted to find this quote real quickly if I can, but basically they basically saying that, "From a permanency perspective, the freedom from MTLS "will reduce our networks spend by over half "while more than doubling or tripling our bandwidth." You can't ignore that. You're going to save me money and triple my bandwidth, and hey by the way, my refresh is due. It's something that's coming and it's going to happen. And yes, you mentioned the few right? There's Viptela, there's Velocloud, there's some big players like Cisco. The Palo Alto just acquired CloudGenix in the midst of all of this. They just went and got an SD-WAN player themselves. And they just keep acquiring a portfolio to shift from their on-prem to next-generation. It's going to take some time, because 70% plus of their revenues is still on-prem hardware, but I do believe that their portfolio that they're creating is the way the world is moving. And that's just one comment on the traditional networking versus the next-generation SD-WAN. >> And the customers have indicated, you know it's not easy just to get off of their MPLS network. I mean it takes time, it's like slowly pulling of the bandaid. But, like many things, COVID-19 is sort of accelerating that. We haven't talked about digital transformation. That came up as a maybe more strategic initiative. But one that very clearly has legs. >> You know, David, it's very simple. You just said it. People, when things are going well and they're comfortable, they don't change. And that's the same for an enterpriser company. Hey, everything's great, our revenue's fine. Why would we do this? We'll worry about that next year. Then something like this happens and you realize wow, we've been dragging our feet. That digital transformation that we've been talking about, and we've been a little bit slow to accept, we need to accept it, we need to move now. And yes, it was another one of the major themes and it sounds silly for researchers like you and I because we know this is a theme. We know Clouded option is there, we know digital transformation is there. But, there are still a lot of people that haven't moved as quickly as they should and this is going to be that final catalyst to get them there, without a doubt. Quickly on your point of Fortinet, I was actually very impressed with the commentary that came from that because Fortinet is sometimes one of those names that you think of that maybe plays in a smaller pool or isn't as big as some of the 800 pound gorillas out there. But in other other interviews besides this I've heard the phrase coined of "Forti-everything". So through RND and through acquisition, Fortinet has really expanded the portfolio and right now is their time to shine because when you have smaller satellite, you know, offices and branches that you need to connect, they're really, really good at it. And you don't always want to call a Palo Alto and pay that price when you have smaller branch offices. And I actually, I was glad you brought up Fortinet because it's not a name that we get to herald that often and it was deserving from this panel. >> Yeah and, you know, companies that can secure gateways, secure endpoints, obviously going to have momentum. Zscaler came up, you know I think that, and I'll tell ya, looking at, I've done a couple of breaking analysis on security and Fortinet has been strong in two dimensions. You know ETR is, as our audience is I think getting to know. We really look at two key metrics. One is net score, which is a measure of spending momentum, and the other is market share, which is a measure of pervasiveness. And companies like Fortinet, in security, show up on both of those dimensions so it's notable. >> Yes, it certainly is, it is. And I'm glad you brought up Zscaler too. Very recently by client request, we did a very in-depth research on Zscaler versus Palo Alto Prisma Access and they were very interested. This was before all this happened, you know. Does Palo Alto have a chance of catching up, taking share from Zscaler. And I've had the pleasure, myself, personally hosting Jay the CEO of Zscaler at an event in New York City. And I have nothing but incredible respect for the company. But what we found out through this research is Zscaler, at the moment, their technology is still ahead, according to their answers. There's no doubt. However, there doesn't seem to be any real secret sauce that will stop Palo Alto from catching up. So we do believe the parody of feature set will shrink over time. And then it will come down to Palo Alto obviously has a wider and user base. Now, what's happening today might change that. Because if I had to make a decision right now, for my company on secure web gateway, I'm still probably going to go to Zscaler. It's the name. If I had to choose that in a year from now, Palo Alto might have had a better chance. So in this panel, as you brought up, Zscaler was mentioned numerous times as just the wave of the future. Along with CASB brokers right? Whether you're talking about a Netskoper or Forcepointer. All those people that also play in CASB space to secure your access. Zero trust is no longer a marketing-hype term. It is real and it is becoming more real by the week. >> And so, I want to kind of end on one of the other comments that really struck me because we're constantly talking about okay, do you go with a portfolio of a suite of services or do you go with best of breed? What about startups? Are startups more risky in a crisis like this? And one of your panelists, I just love this comment, he said, "One of things that I've always done," he said, "You always hear about the guy, "oh we're going to go to the gardener, we're going to "check out the magic water, we'll pick out three guys "in the upper right hand corner and test them out." He says, "One of the things I always like to do, "I'll pick two from the upper right "and I'll take one from the lower left." One of the emerging, text, "And I'll give em a shot." It won't win every time, but then he called out FireEye as one of the organizations that he found early that gave them competitive advantage. >> Right. >> Love that comment. >> It's a great comment. And honestly if you're in charge of procurement you'd be stupid not to do that. Not only just to see what the technology is, but now I can play you off the big guys because I have negotiating leverage and I can say oh, well I could always just take their contract. So it's silly not to do it from a business perspective. But from technology perspective, what we kept hearing from these people with the smaller vendors. My partner Peter Steube, my colleague and I, we did the host together, we asked this question really believing that the financial insecurity of the moment and the times would make smaller vendors not viable. We heard the exact opposite. What our panelists said was, "No, I'd be happy "to work with a smaller vendor right now "because they're going to give me pricing flexibility, "they're going to work with me right now. "I don't need to pay them upfront "because we're seeing a permanent shift from CapEx to OpEX, "and the smaller vendors are willing to work with me and I can pay them later." So we were actually surprised to hear that and glad to hear it because, to connect to your other point, the other person who was talking about security and the platform approach versus best of breed, he said "Listen, platform approaches you're already "with the vendor, you can bundle a little bit. "But the problem is, if you're just going to acquire "a new technology every time there's a new threat, "the bad guys are just going to switch the threat. "And you can't acquire indefinitely. "So therefore, best of breed with security "will always beat platform." And that's kind of a message to Palo Alto and Cisco, in my opinion, because they seem to be the ones fighting that out. Even Microsoft now, trying to say they're a platform approach in security. >> Well and this says to me the security business, as we predicted, is going to stay fragmented because you're still going to get that best of breed. You know, just like Cloud is going to be fragmented and it's, you know, multiple vendors. Ever since I've been in this business people are trying to consolidate the number of vendors, but technology moves so quickly, it gives competitive advantage. Erik, awesome! Thank you so much for joining us. I'm looking forward to next Tuesday with the next vendor and love to have you back and talk about it anytime. You're a great guest, thanks so much. >> Certainly, I'll do my best to get a better AV connection the next time guys, I apologize for that. But it was great talking to you tonight. >> Hey we're all learning, you know so, thank you everybody for watching, this is Dave Vellante for theCUBE and we'll see you next time. (upbeat music)

>> Announcer: From theCUBE studios in Palo Alto and Boston connecting with thought leaders all around the world. This is a CUBE conversation. >> Hello everybody, welcome to this special CUBE conversation. My name is Dave Vellante and you're watching theCUBE. We're here with Sanjay Poonen who's the COO of VMware and a good friend of theCUBE. Sanjay great to see you. Thanks for coming on. >> Dave it's a pleasure. In these new circumstances, shelter at home and remote working. I hope you and your family are doing well. >> Yeah, and back at you Sanjay. Of course I saw you on Kramer Mad Money the other night. I was jealous. I said, "I need Sanjay on to get an optimism injection." You're a great leader And I think, a role model for all of us. And of course the "Go Niners" in the background really incented me to get-- I got my Red Sox cap and we have a lack of sports, but, and we miss it, But hey, we're making the best. >> Okay Red Sox is better than the Patriots. Although I love the Patriots. If i was in the east coast, especially now that Brady's gone. I guess you guys are probably ruing a little bit that Jimmy G came to us. >> I am a huge Tampa Bay fan all of a sudden. I be honest with you. Tom Brady can become a Yankee and I would root for them. I tell you that's how much I love the guy. But anyway, I'm really excited to have you on. It's obviously as you mentioned, these times are tough, but we're making the best do and it's great to see you. You are a huge optimist, but I want to ask you, I want to start with Narendra Modi just announced, basically a lockdown for 21 days. 1.3 billion people in your native country. I wonder if you could give us some, some thoughts on that. >> I'm, my parents live half their time in Bangalore and half here. They happen to be right now in the US, and they're doing well. My dad's 80 and my mom's 77. I go to India a lot. I spent about 18 years of my life there, and the last 32 odd years here and I still go there a lot. Have a lots friends and my family there. And , it's I'm glad that the situation is kind of , as best as they can serve it. It's weird, I was watching some of the social media photos of Bangalore. I tweeted this out last night. The roads look so clean and beautiful. I mean, it looks like 40 years ago when I was growing up. When I would take a bicycle to school. I mean Bangalore's one of the most beautiful cities in India, very green and you can kind of see it all again. And I think, as I've been watching some of the satellite photos of the various big cities to just watch sort of Mother Nature. Obviously, we're in a tough time and, I open my empathy and thoughts and prayers go to every family that's affected by this. And certainly ones who have lost loved ones, but it's sort of, I think it's neat, that we're starting to see some of the beautiful aspects of nature. Even as we deal with the tough aspects of sheltered home. And the incredible tough impacts of this pandemic across the world. >> Yeah, I think you're right. There is a silver lining as much as, our hearts go out to those that are that are suffering. You're seeing the canals in Venice run clear. As you mentioned, the nitrous oxide levels over China. what's going on in Bangalore. So, there is a little bit of light in the end of the tunnel for the environment, I hope. and at least there's an indication that we maybe, need to be more sensitized to this. Okay, let's get into it. I want to ask you, so last week in our breaking analysis. We worked with a data company called ETR down in New York City. They do constant surveys of CIO's. I want to read you something that they came out with just on Monday and get your reaction. Basically, their annual growth and IT spend they're saying, is showing a slight decline for 2020. As a significant number of organizations plan to cut and/or delay IT expenditures due to the coronavirus. Though the current climate may suggest worse many organizations are accelerating spending for 2020 as they ramp up their work-from-home infrastructure. These organizations are offsetting what would otherwise be a notable decline in global IT spend versus last year. Now we've gone from the 4% consensus at the beginning of the year. ETR brought it down to zero percent and then just on Monday, they went to slight negative. But, what's not been reported widely is the somewhat offsetting factor of work-from-home infrastructure. VMware obviously plays there. So I wonder if you could comment on what you're seeing. >> Yeah, Dave, I think , we'll have to see . I'm not an economic pundit. So we're going to have to see what the, IT landscape looks like in the overall sense and we'll probably play off GDP. Certain industries: travel, hospitality, I mean, it's brutal for them. I mean, and I hope that, what I really hope, that's going to happen to that industry, especially there's an infusion through recovery type of bill. Is that no real big company goes under, and goes bankrupt. I mean kind of the situation in 2008. I mean, people wondering what will happen to the Airlines. Boeing, hospital-- these are ic-- some of them like Boeing are iconic brands of the United States and of the world. There's only two real companies that make planes. So we've got to make sure that those industries stay afloat and stay good for the health of the world. Health of the US economy, jobs, and so on. That's always one end. Listen, health and safety of our employees always comes first. Before we even think about that. I always tell people the profits of VMware will wait if you are not well, if your loved ones not well, if your going to take care of people, take care of that first. We will be fine. This too shall pass. But if you're healthy, let's turn our attention because we're not going to just sit at home and play games. We're going to serve our customers. How do we do that? A lot of our customers are adjusting to this new normal. As a result, they have to either order devices with a laptop, screens, things of those kinds, to allow a work-from-home environment to be as close to productive as they work environment. So I expect that there will be a surge in the, sort of, end points that people need. I will have to see how Dell and HP and Lenovo, but I expect that they will probably see some surge in their laptops. As people, kind of, want those in the home and hopefully their supply chains are able to respond. But then with every one of those endpoints and screens that we need now for these types of organizations. You need to manage them, end point management. Often, you need virtual desktops on them. You need to end point security and then in some cases you will probably need, if it's a remote office, branch office, and into the home office, network security and app acceleration. So those Solutions, end point management, Workspace ONE, inclusive of a full-fledged virtual desktop capability That's our product Workspace ONE. Endpoint Securities, Carbon Black and the Network Platform NSX being software-defined was relegated for things like, load balancers and SDWAN capabilities and it's kind of almost feels like good, that we got those solutions, the last three, four years through acquisitions, in many cases. I mean, of course, Airwatch and Nicira were six, seven, eight years ago. But even SD-WAN, we acquired Velocloud three and a half years ago, Carbon Black just four months ago, and Avi in the last year. Those are all parts of that kind of portfolio now, and I feel we were able to, as customers come to us we're not going in ambulance-chasing. But as customers come to us and say, "What do you have as a work-at-home "for business continuity?" We're able to offer them a solution. So we did a webcast earlier this week. Where we talked about, we're calling it work in home with business continuity. It's led with our EUC offerings Workspace ONE. Accompanied by Carbon Black to secure that, and then underneath it, will obviously be the cloud foundation and our Network capabilities of NSX. >> Yeah, so I want to double down on that because it was not, the survey results, showed it was not just collaboration tools. Like Zoom and WebEx and gotomeeting Etc. It was, as you're pointing out, it was other infrastructure that was of VPN's. It was Network bandwidth. It was virtualization, security because they need to secure that work-from-home infrastructure. So a lot of sort of, ancillary activity. It was surprising to me, when I saw the data, that 21% of the CIO's that we surveyed, said that they actually plan on spending more in 2020 because of these factors. And so now we're tracking that daily. And the sentiment changes daily. I showed some other data that showed the CIO sentiment through March. Every day of the survey it dropped. Okay, so it's prudent to be cautious. But nonetheless, people to your point aren't just sitting on their hands. They're not standing still. They're moving to support this new work-from-home normal. >> Yeah, I mean listen, I forgot to say that, Yeah, we are using the video collaboration tools. Zoom a lot. We use Slack. We'll use Teams. So we are, those are accompanied. We were actually one of the first customers to use Zoom. I'm a big fan of my friend Eric Yuan and what they're doing there in modernizing, making it available on a mobile device. Just really fast. They've been very responsive and they reciprocated by using Workspace ONE there. We've been doing ads joined to VMware and zoom in the market for the last several years. So we're a big fan of their technology. So far be it from me to proclaim that the only thing you need here's VMware. There's a lot of other things on the stack. I think the best way, Dave, for us that we've sought to do this is again, I'm very sensitive to not ambulance-chase, which is, kind of go after this. To do it authentically, and the way that authentically is to be, I think Satya Nadella put this pretty well in an interview he did yesterday. Be a first responder to the first responder. A digital first responder, if I could. So when the, our biggest customers are hospital and school and universities and retailers and pharmacies. These are some of our biggest customers. They are looking, in some cases, actually hire more people to serve their communities and customers. And every one of them, as they , hire new people and so and so on, will I just naturally coming to us and when they come to us, serve them. And it's been really gratifying Dave. If I could read you the emails I've been getting the last few days. I got one from a very prominent City, the United States, the mayor's office, the CTO, just thanking us and our people. For being available who are being careful not to, we're being very sensitive to the pricing. To making sure customers don't feel like, in any way, that we're looking at the economics of it will always come just serve your customer. I got an email yesterday from a very large pharmacy. Routinely we were talking to folks in the, in the healthcare industry. University, a president of a school. In fact, Southern New Hampshire University, who I mentioned Jim Cramer. Sent me a note saying, "hey, we're really grateful you even mentioned our name." and I'm not doing this because, Southern New Hampshire University is doing an incredible job of moving a lot of their platform to online to help tens of thousands. And they were one of the early customers to adopt virtual desktops, and the cloud desktops, and the services. So, as we call. So in any of these use cases, I just tell our employees, "Be authentic. "First off take care of your families. "It's really important to take care of your own health and safety. But once you've done that, be authentic in serving our customers." That's what VR has always done. From the days of dying green, to bombers, to Pat, and all of us here now. Take care of our customers and we'll be fine. >> Yeah, and I perfectly understand your sensitivity to that notion of ambulance-chasing and I'm by no means trying to bait you into doing that. But I would stress, the industry needs you and the tech it-- many in the tech industry, like VMware, have very strong balance sheets. They're extremely viable companies and we as a community, as an industry, need companies like VMware to step up, be flexible on pricing, and terms, and payment, and things like that nature. Which it sounds like you're doing. Because the heroes that are on the front lines, they're fighting a battle every day, every hour, every minute and they need infrastructure to be able to work remotely with the stay-at-home mandates. >> I think that's right. And listen, let me talk a little bit of one of the things you talked about. Which is financing and we moved a lot of our business to increasingly, to the cloud. And SaaS and subscription services are a lot more radical than offer license and maintenance. We make that choice available to customers, in many cases we lead with cloud-first solutions. And then we also have financing services from our partners like Dell financial services that really allow a more gradual, radibal payment. Do people want financing? And , I think if there are other scenarios. Jim asked me on his show, "What will you do if one of your companies go bankrupt?" I don't know, that's an unprecedented, we didn't have, we had obviously, the financial crisis. I wasn't here at VMware during the dot-com blow up where companies just went bankrupt in 2000. I was at Informatica at the time. So, I'm sure we will see some unprecedented-- but I will tell you, we have a very fortunate to be profitable, have a good balance sheet. Whatever scenario, if we take care of our customers, I mean, we have been very fortunate to be one of the highest NPS, Net promoter scorer, companies in the industry. And , I've been reaching out to many of our top customers. Just a courtesy, without any agenda other than, we're just checking in. A friend in need is a friend indeed. It's a line that I remembered. And just reach out your customers. Hey listen. Checking in. No, other than can we help you, if there's anything and thank you, especially for ones who are retailers, pharmacies, hospitals, first responders. Thank them for what they're doing to serve many of their people. Especially people in retail. Think about the people who have to go into warehouses to service us, to deliver the stuff that comes to our home. I mean, these people are potentially at risk, but they do it. Put on masks. Braving health situations. That often need the paycheck. We're very grateful for that, and our hope is that this world situation, listen, I mentioned it on on TV as a kind of a little bit of a traffic jam. I love to ski and when I go off and to Tahoe, I tell my family, "I don't know how long it's going to take." with check up on Waze or Google Maps and usually takes four hours, no traffic. Every now and then it'll take five, six, seven. Worst case eight. I had some situation, never happen to me but some of my friends would just got stuck there and had to sleep in their car. But it's pretty much the case, you will eventually get there. I was talking to my dad, who is 80, and he's doing well. And he said, this feels a little bit like World War Two because you're kind of, in many places there. They had a bunker, shelter. Not just shelter in place, but bunker shelter in that time. But that lasted, whatever five, six years. I don't think this is going to last five, six years. It may be five, six months. It might be a whole year. I don't know. I can guarantee it's not going to be six years. So it won't be as bad as World War two. It certainly won't be as bad as the Spanish Flu. Which took 39 people and two percent of the world. Including five percent of my country, India in the 1918 to 1920 period, a hundred years ago. So we will get through this. I like, we shall overcome. I'm not going to sing it for you. It's one of my favorite Louis Armstrong songs, but find ways by which you encourage, uplift people. Making sure, it is tough, it is very tough times and we have to make sure that we get through this. That jobs are preserved as best as we can because that's the part I'm really, really concerned about. The loss of jobs and how we're going to recover as US economy, but we will make it through this. >> Yeah, and I want to sort of second what you're saying. That look, I know there are a lot of people at home that going a little bit stir crazy and this, the maybe a little bit of depression setting in. But to your point, we have to be empathic for those that are suffering. The elderly, who are in intensive care and also those frontline workers. And then I love your optimism. We will get through this. This is not the Spanish Flu. We have, it's a different world, a different technology world. Our focus, like many other small businesses is, we obviously want to survive. We want to maintain our full employment. We want to serve our customers and we, as you, believe that that is the recipe for getting through this. And so, I love the optimism. >> And listen, and we can help be a part of my the moment you texted me and said, "Hey, can I be in your show?" If it helps you drive, whatever you need, sponsorship revenue, advertising. I'm here and the same thing for all of our friends who have to adjust the way in which the wo-- we want to be there to help them. And I've chosen as best as I can, in terms of how I can support my family, the sort of five, five of us at home now. All fighting over bandwidth, the three kids, and my wife, and I. To be positive with them, to be in my social media presence, as best as possible. Every day to be positive in what I tweet out to the world And point people to a hope of what's going to come. I don't know how long this is going to last. But I can tell you. I mean, just the fact that you and I are talking over video interview. High fidelity, reasonably high fidelity, high bandwidth. The ability to connect. I mean it is a whole lot better than a lot of what happened in World War 2 or the Spanish flu. And I hope at the end of it, some of us, some of this will forever change our life. I hope for for example in a lot of our profession. We have to travel to visit customers. And now that I'm building some of these relationships virtually. I hope that maybe my travel percentage will drop. It's actually good for the environment, good for my family life. But if we can lower that percentage, still get things done through Zoom calls, and Workspace ONE, and things of those kinds, that would be awesome. So that's how I think about the way in which I'm adapting my life. And then I set certain personal goals. This year, for example, we're expanding a lot of our focus in security. We have a billion dollar security business and we're looking to grow that NSX, Common Black, Workspace ONE, and accompanying tools and I made it a goal to try and meet at all my sales teams. A thousand C-ISOs. I mean off I know a lot of CIO's in the 25 years, I've had, maybe five, six thousand of them in the world. And blessed to build that relationship over the years of my SAP and VMware experience, but I don't know. I mean, I knew probably 50 or 100. Maybe a few hundred CISO's. And now that we have a portfolio it's relevant to grant them and I think very compelling across network security and End Point security. We own the companies with such a strong portfolio in both those areas. I'm reaching out to them and I'm happy to tell you, I connected, I've got the names of 1,000 of the top CISO's in the Fortune 1000, Global 2000, and connecting with many of them through LinkedIn and other mixers. I hope I talked to many of them through the course of the year. And many of them will be virtual conversations. Again, just to talk to them about being a trusted advisor to us. Seeing if we can help them. And then of course, there will be a product pitch for NSX and Carbon Black and how we're different from whoever it is, Palo Alto and F5 and Netscaler and the SD line players or semantic McAfee Crowdstrike. We're differentiated so I want to certainly earn some of the business. But these are ways in which you adjust to a virtual kind of economy. Where I'm not having to physically go and meet them. >> Yeah, and we share your optimism and those CISO's are, they're heroes, superheroes on the front line. I'll tell ya a quick aside. So John Furrier and I, we're in Barcelona. When really, the coronavirus came to our heightened awareness and John looked at me and said, "Dave we've been doing digital for 10 years. "We have to take all of the software that we've developed, "all these assets and help our customers pivot." So we share that optimism and we're actually lucky to be able to have the studios and be able to have these conversations with you guys. So again, we share that, that optimism. I want to ask you, just on guidance. A lot of companies have come out and said we're not giving guidance anymore. I didn't see anything relative to VMware. Have you guys announced anything on guidance in terms of how you're going to communicate? Where are you at with that? >> No, I think we're just, I mean listen, we take this very carefully because of reg FD and the regulations of public company. So we just allow the normal quarterly ins. And of outside of that, if our CFO decides they may. But right now we're just continuing business as usual. We're in the middle of our, kind of, whatever, middle of our quarter. Quarter ends April. So work hard do the best we can in all the regions, be available for all of our teams. Pat, myself, and others we're, to the extent that we're healthy and we're doing well, but thank God, is reach out to CISO's and CIO's and CTO's and CEOs and help them. And I believe people will spend money. The questions we have to go over. And I think the stronger will survive. The companies with better balance sheet and unfortunately, some of the weaker companies won't. And I think quite frankly, if you do your job well. I don't mean this in any negative sense. The stronger companies will take share in these environments. I was watching a segment for John Chambers. He has been through a number of different, when I know him, so an I have, I've talked to him about some of the stuff. He will tell you that he, advises is a lot of his companies now. From the experiences he saw in 2008, 2001, in many of the crisis and supply chain issues. This is a time where leadership counts. The strong get stronger. Never waste a good crisis, as Winston Churchill said. And as you do that, the strong will come strong because you figure out ways by which, if you're going to make changes that were planned for one or two years from now. Maybe a good time to make them is now. And as you do that you communicate a vision for where you're going. Very clearly to your employees. Again incessantly over and over again. They, hopefully, are able to repeat it in their own words in a simple fashion, and then you get all of your employees in our case 30,000 plus employees of VMware lined up. So one of the things that we've been doing a lot of these days is communicate, communicate, communicate, internally. I've talked a lot about our communication with customer. But inside, our employees, we do calls with our top leaders over Zoom. Calls, intimate calls, and many, often we're adjusting to where I'll say a few words. I have a mandatory every two week goal with all of my senior most leaders. I'll speak for about five minutes and then for the next 25 minutes, the top 12, 15 of them I listen. To things, I want all of them to speak up. There's nobody who should stay silent, because I want to hear what's going on in that corner of the world. >> But fantastic Sanjay. Well, I mean, Boeing, I heard this morning's going to get some support from the government. And strategically that's very important for our country. Congress finally passed, looks like they're passing that bill, and support which is awesome. It's been, especially for all these small businesses that are struggling and want to maintain full employment. I heard Steve Mnuchin the other day saying, "Look, we're talking about two months of payroll "for people if they agree to keep people employed. "or hire them back." I mean the Fed. people say, oh the FED is out of arrows. The Feds, not out of arrows. I mean, I'm not an economist either. But the Fed. has a lot of bullets in their gun, as they say. So Sanjay, thanks so much. You're an awesome leader and really an inspirational executive and a good friend so thank you so much for coming on theCUBE. >> Dave, always a pleasure. Please say hi to all of my friends, your co-anchors, and the staff at CUBE. Thank them for all their hard work. It's a pleasure to talk to you this morning. I wish you, your family, and your friends and all of our community, stay safe and be well. >> Thank you Sanjay and thank you for watching everybody. This is Dave Vellante for the cube and we'll see you next time. (soft music)

(Techno music) >> Live from San Francisco, celebrating ten years of high tech coverage, it's The Cube. Covering VMworld 2019. Brought to you by VMware and it's ecosystem partners. >> Well we are in Moscone Center North here in San Francisco, the city by the bay. Gorgeous day outside. Day two of our coverage here on the Cube. Vmworld 2019. I'm John Walls with John Troyer. John good to see you today. >> Great to be here with you. >> Good for day two. We have a couple of authors with us today, both from VMware. Rosa Lear who is the Director of Marketing at VeloCloud, in the business unit there. Rosa thank you for being with us. >> Thank you. >> Appreciate that. And Dave Twinam, who is the Director of Systems Engineering in that business unit at VMware. And this is the book that they have collaborate on I think with 12 others, there were 14 who came together on this project. It's called SD-WAN one on one, the what, the why, and the how. This is going to answer all those riddles, all those puzzles that you have about how to software define wide area network work, where are the pitfalls, where are the challenges, what are we going to do to solve our problems. So folks what was the genesis of this? It's a hefty thing for sure, >> (Rosa) It is, yes. And really well illustrated, we'll get into that in a little bit, but what was the genesis of this? Rosa if you would first, what drove you to put this together? >> Sure, there are a lot of books out there on the market that are focused on the SD-WAN because it's such a hot topic, but what we saw was a big deficit on how does it actually work. Getting down into that second, third layer of what people are looking for. So it's not so superficial. They really want to know how does it work, how do I integrate it into my network, what are the steps that I go through. So it's not a user manual, but it definitely gives you that deep perspective of what SD-WAN can provide and how to implement it into your network. >> So the target audience would be who? >> Network engineers, we also got stuff in here for the business owners, so CTO's. We actually have two characters that help outline a lot of the comments, or a lot of the meat of the book. One is Elvina. She's the CTO, so she really describes what her business needs are. And then there's Rodney who is her network engineer who actually implements this, the architect, so it's told from their perspective and really introducing each of the chapters, the concepts, and the takeaways. >> So Dave as you've been doing this, you're talking to customers out there, what's the state of the art here, where are we with the evolution of SD-WAN? It's kind of a noisy space from my perspective. Also from a VMware perspective, this brings VMware out of the data center into the network, and network edge, and wide area network. So can you just talk a little bit about what are the problems people are seeing, and that they're solving with SD-WAN, and why are network engineers interested in taking this as their bedtime reading. >> Absolutely, clearly what we're seeing in the marketplace is that there is a lot of noise out there, there are a lot of vendors that are in the SD-WAN space. I think it's important to note though that we are number one. It's always a good place to be. So while VMware is a newer kind of entrant into the wide area market in particular we already have a leadership position via the VeloCloud acquisition, and obviously the continued enhancements to the portfolio from there. So the reality is that SD-WAN, it's kind of funny we have the why at the beginning of the book, more and more customers aren't asking the why. They know why they need it, which is it's the natural evolution of their wide area infrastructure. They know that software is the future, that's why we are here at Vmworld cause we're all about software, and understanding how they can evolve to meet those business challenges in a software framework versus the traditional rip and replace hardware based model over the past. >> And you're on one side of the equation obviously, you're supplying this information, supplying the services, developing the solutions whatever. How much listening do you do to the other side to put together something like this? Cause I would assume you had to have a real sense of what the problems are and what the questions are. What is the what, what is the why, what is the how that's going on on the customer side of this. Tell me about that process if you will. >> Sure, so one of the unique parts of this book is that with these other authors that we brought in to put this book together, and we did this within five days which is a great project, but we really took the people out of the field. So these are the engineers that helped create this book are the ones who are shoulder to shoulder with the customer. Helping them that implementation, talking to them about how they actually implement this. So they talk to the customers, this is brought out from the field. It's not some guy sitting in an ivory tower talking about what you should do. This is actually what you should do because this is the best practice, this is what we hear from customers, this is what works best for all of the people we've implemented SD-WAN with. >> You did this in five days? >> Five days, so we hired a company. >> (John) How many of you 14? >> There was 15 of us. >> 15 in five days, we're you locked up for >> Yes. 24 hours around the clock. I read you went to Miami, I remember that, but I didn't realize it was in that compressed of a time frame. >> Oh yeah, it was great. I mean we all learned, I think, a lot because we come from different geography's. We came from different deployment models and so forth. And yeah we just all got together. >> I love the idea of the book spread. So you've captured a moment in time, of the technology, of the marketplace, but you said this isn't a dummies book, isn't an intro, nor is it a how to manual right. It's not a product manual. So I'm thinking it should be somewhat conceptual and have a life span of more then just the latest release of anything right. Is that part of the goal here? Is this going to have a lifespan? >> Absolutely. >> I mean what do you envision? Again it's interesting you're both engineering and you said the CTO, the CXO level can get some understanding of why some things are going on. >> Sure, you think about it from a CXO perspective right. What are the business challenges that that individual sees. They don't necessarily care about the bits and bites of networking underneath. They know that they need a network, but they also know that it's a really expensive part of their budget. So they need to understand how does it actually support the business and ultimately how can they do more with it, and ideally what we always hear is do more with less. So how do we get to that point and understanding then that's one need that comes from the business side. Well how do we complement that from the technical side of things. How do we solve those problems. But the reality is we're not solving technical problems just to solve technical problems. We're solving them to actually meet the needs of the business. So kind of seeing both side and how they come together is critical to it and I think that's something we tried hard to put into the book. >> When you have a collaboration like this, and you said you brought 15 people together, I'm sure there has to be some disagreement at some point or some discussion. So what were some of those points that came up where somebody thought that perhaps maybe a little more attention here, maybe a little less attention there. Maybe this is something we should bring, no that's not touch that base. How about those discussions, that back and forth, and how did you settle that with so many people in the room? >> So one of the things that we first outlined when we started this process was that this is a safe space. That nobody is really wrong, cause we're also bringing in different perspectives here. So we definitely all decided that we're going to treat each other respectfully. There was a lot of arguments here and there about certain things but we all are professional so we all figured out what the right thing was to do. >> So let's talk about the order, let's talk about how you dealt with it, the what's and the whys. You said why almost didn't make the cut but did make the dress rehearsal and the publishing. How do you put together something like this, that is not a user manual, cause that's the first thing I thought of. I thought okay, you're going to show me what SD-WANS all about and how I'm going to deploy it. VMwares services or solutions rather on my network. But that's not what this is all about. How did you parts that? How did you decide this is the direction we're going to go, and not just make it a how to for people or a dummies. >> So we already have a dummies book, so you should check that out. There's also a PDF on our website, velocloud.com, so we needed another layer, another book that would go deeper on that. We needed something that, I mean you can always write a user manual. Anybody can sit in a room and put that together, but we wanted something that was different. That was actually going to, I guess, comfort customers who were looking at the solution. Give them the right idea that this is what they need, and also what they were going to get into. That's a big question, you don't understand what the implementations going to be like until you're in it. So this gives you that view. So you can use it as a pre-customer read, or you can use it post-sales and really help define what you need to do when you're implementing. >> Nice, nice. We're here at VMworld 2019, this is my you know millionth VMworld. Very interesting, a lot of talk at the top level. Apps and kubernetes and that sort of stuff. At the bottom level, networking and a lot of other things, that maybe the traditional admin, Vsphere admin, already kind of a silo busters from old rolls is already here but sometimes when the networking folks talk with the server folks the words mean different things. They're slightly different tribes lets say. App performance is an SD-WAN context may mean something completely different then app performance in a data center, server context. So you're here at the show. You've got the network edge zone down in the show floor. You've got a booth there, you've got activities, obviously a lot of break out sessions. How have the networker's mixed with the admins? How has it been? And you all are from VeloCloud which has been with VMware for? >> (Rosa) Almost two years in December. >> Talk about both that integration, both corporately and you know here at the show. >> You want to go first? >> Sure, the event has been fantastic for us. We are getting a lot of traction. We actually did a book signing for this book yesterday with six of the authors. 96 books are gone, and I feel like the conversations are really migrating to the networking space. The wide area networking space rather then just data center. You're right there is a lot of overlap in the technology and the lingo and jargon, but I think if we know what were talking about in terms of wide area networking I think those conversations can easily be fudged or gaped. >> Just I would add, I've been at VMware about five years now so I was on the NSX team prior to moving over to the Velo team. So five years ago there was virtually no presence of networking. We were the only networking people here for the most part, And that's really changed substantially. And this year in particular is the first year where there are a lot of networking folks that are roaming the halls here. Whether its understanding the NSX side of the house or whether its SD-WAN there is a significantly greater presence then there's ever been previously. So the other piece is realizing we're a networking company now and a security company right. Those components are integral as a part of the solution and so the makeup has actually begun to change a little bit and there's more co-mingling then there's ever been before in this space. >> You touch on security in the book? >> Absolutely there's an entire chapter on it. >> So C-Cell might be interested as well? >> Absolutely. >> All right so the book I've seen is for purchase here on site. >> (Rosa) Yes. >> In case somebody's watching and they're here tell them where they can get it. >> Go the the VMware book store, it's in Moscone West, and then we also will be making it available on Amazon starting next week. >> All right so here's again a look at the book. SD-WAN one on one, the what, the why and the how. Rosa, Dave thanks for being with us. Congratulations on, I assume first book? >> For me yes. >> Third for me. >> Oh okay, a practiced hand. (laughing) >> First print though. >> Not fair. Thank you both, appreciate the time. >> (in unison) Thank you. >> Back with more continued coverage here on the cube of Vmworld 2019. (techno music)

>> 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)

>> Announcer: Live from San Francisco, celebrating 10 years of high tech coverage, it's theCUBE! Covering VMworld 2019. Brought to you by VMware and its ecosystem partners. >> Okay, welcome back everyone live CUBE coverage here in San Francisco at VMworld 2019 I'm Jon Furrier, my co-host this segment, Stu Miniman. 10 years Stu it's been a long run. A lot of CUBE alumnis around, we got two here. Honore LaBourdette Vice President go-to-market Telco Edge Cloud at VMware. And Lakshmi Mandyam, Vice President Product Manager, go-to-market Edge IoT at VMware. Great to see you, thanks for coming back. >> Thank you for having us. >> So, I think IoT's going to be a pretty big deal. 5G, jury's still out on 5G but it's looking good. Look, if Pat Gelsinger said it's going to be great, it's probably going to be great. What's new? Give us the update. >> Well, just a commentary on 5G, when you say you think it's going to be great, there is some skepticism in the marketplace because if you go back and look at all the different generations of cellular technologies, it's the odd numbers that have never been successful and the even numbers that have, from a monetary perspective for the telcos. Interesting thing about 5G is because it's such a system-oriented technology, that we do believe that it's going to enable a lot of the capabilities associated with IoT, right? So there's an interdependency between 5G and IoT and IoT and 5G that I think is going to make 5G more successful than any of its predecessors. >> All of us are nerds that geek out on RF and physics. I mean 5G has a lot of skeptics but they're deploying 5G, it's not like it's a vaporware. There are deployments going on in the United States, certainly outside of the United States. So it is real, it's actually happening. The question is what will be the impact to the network effect and what's it going to enable, which will certainly impact the industrial IoT and IoT markets. >> Well so one of the things that's happening with the deployments of 5G isn't just the innovation associated with the spectrum technology of five generations of mobile technology, right? There is an entire transformation happening with the core infrastructure of the telco network. And there's an interdependency there as well, right? So as the telco's software define the infrastructure on which they run all of their services, that then extends all the way through from the cloud to the core to the edge for all of the radio access and everything associated with 5G. >> And we're also seeing on the IoT side that there's a similar transformation going on, 'cause right now when you look at kind of example manufacturing, right? There's a real siloed infrastructure, siloed use cases and people are not able to scale and especially when you start to see the business impact that IoT's actually going to have, because most of the data that's being generated is actually being generated from the devices at the edge. And there's a viewpoint that a lot of the workloads that are actually being generated for the enterprise are actually going to be executed at the edge and when you take those things into consideration, it's really important to have an infrastructure that scales. And just like we've seen in other areas where a sprawl of infrastructure is really not going to be be effective in terms of delivering business value. That's the same problem that we see here. >> That brings up a good point. You mention systems view. I think this is interesting 'cause I think this business model innovation, as well as the architecture. I mean, you become what you're known for in the old infrastructure. You don't want that legacy to be dictating the new things, you mentioned backhaul. That's a topic that people talk about in the cellular business. You got the radios, you backhaul through a network, go to the core. But now you're getting at something different where if you're going to be backhauling, which implies moving packets around, moving data has become a really big problem or concern because the cost to move data, the physics involved, latency is a requirement. Processing at the edge becomes the new architecture. >> Yeah, I think the old paradigm was around moving data to the compute but the new paradigm is going to be moving compute to the data, especially on the edge and the IoT. And this is where managing that whole compute infrastructure is going to be really, really important. And that's what, you know, the VMware Telco Edge-- >> Well, we're going to ask Pat Gelsinger a question that riffs off what Dave asked years ago. Stu, I don't remember what year it was, 2012 or 2013, Dave Vellante asked Pat Gelsinger, "Is security a do-over?" You know Pat's very opinionated, he's like, "Absolutely a do-over." Really risky, bold take to say at that time, turns out he was right. The question I want to preview with you guys is, is the architecture a do-over? Because if you think about it, there's new capabilities, you mentioned the systems view. Is there an opportunity, not to throw it away, but like, just rethink it, get a second chance at deploying large scale edge, cloud, versus backhauling through the data center, maybe backhaul through the cloud. So, to me it's just kind of feels like a do-over. >> Well, there's very much an opportunity to, I'll say evolve rather than to do it over, right? 'Cause do-over kind of implies everybody's going to throw out everything that they have. But when you think about the beauty of software is that now we can have inherent security in all of the aspects of the software defined network all the way through the edge. So if you happened to hear Pat's keynote this morning, you know, he put up a slide of all the different security vendors across all of the different types of, the different areas of the clouds, the different cloud technologies and basically said that there is an opportunity now for us to do for security basically what we did for compute and networking and storage, by software defining that. And so that's the opportunity for security is to leverage all of what you can do with a software defined approach and have security be intrinsic to everything from the cloud to the core to the edge. And specifically for IoT. If you think about Lakshmi's comment about pushing the compute to the apps, and pushing the compute where the applications are going to be, or the user is going to be, I think there's going to be a greater requirement for security actually at the edge than even what we see in the cloud today. >> Lakshmi, you know, one of the comments we made is if you looked at the keynote this morning, the virtual machine is not the center of the the discussion. There's, you know, VMware, now plays a lot of places where that VM is not at the center. If you can bring us up to speed, when VMware looks at the edge architectures and how they're going to work with enterprises there, you know, what are the solutions that you're going to bring to bare out of the portfolio? >> Yeah so we have a, you know, when you think about IoT and there's all these things that are out there, oftentimes when someone installed it in the factory they didn't even update the factory settings, the threat surface of that is just expansive. And so, what we're doing with the product that I'm going to talk about, Pulse, we actually life cycle manage these devices, software updating, making sure that they're compliant with IT kind of security and other requirements. And so, what we see is the architecture, is we see kind of this managed infrastructure at the device level, that then feeds into kind of the thin edge, and you heard Pat talk about it this morning, right? Pulse and NSX and VeloCloud for the thin edge and that kind of, it's a continuum really. You can't define-- >> It's difficult to do. >> It's a continuum of compute ranging from very small footprint all the way up to our Dell EMC announcement. BMC on Dell EMC, sorry. >> We actually did some original research back when, you know, GE was putting together their industrial internet and one of the biggest stumbling blocks we saw is that huge gap between the IT and OT, they don't talk. You talk about the telco, that telco role doesn't tie in to the traditional data center world. It's at the edge and some expert comes in and does their piece but, you know, smashing these worlds together is a real challenge. >> What's interest-- >> Oh, I'm sorry. >> I was going to say 5G is the technology that I think is going to create the catalyst for those technologies to come together, right? So you have the enterprise edge, you have the industrial edge, and you have the telco edge. And over time, the more the telcos start pushing compute out to their edge, enterprise push compute out to their edge. And then you have all of these industrial IoT devices. The definition of the edge is going to begin to blur. >> I think this is, I think the IoT, industrial IoT, is probably the most important tech story this generation. It doesn't get as much play as AI, 'cause AI kind of sounds cooler, attracts young kids to be coders, but IoT is really the most important thing because think about the industrial IoT, the threats, cyber threats, cyber security. One hole, one hole and the attacker is in. Just to speak security and critical. >> I actually think it's beyond that because I don't know if you heard Pat talk about his definition of the edge, which is actually that merging of the digital and physical worlds. When you think about that, most of human problems can be solved by great technology, technology for good. And so you think about industries being pushed to produce more, 70% more food with just 5% extra land, or you know, carbon emissions, all of these problems which with good visibility control and management can be solved and that's really what we're trying to do-- >> Yeah, but good intentions, I understand where Pat's coming from. It's good, it's good marketing on the stage but the reality is, is when you roll out the tech to make that happen, if you don't have that security intrinsically pulled in, this means that you got to have the zero trust. But IoT is a different animal on a thin edge, than it is, say a data center. So like, it's just one of those things where we're watching 'cause it's just, there's so many, the service area is so large. >> Yeah, and in fact, one of the things that we're doing in terms of incorporating security in the management is looking at hardware Root of Trust right down to every device that's managed and being able to, you know, to attest whether something is legitimate or not. So we're rolling all of those things into our technologies. >> So, Pat brought up the telco. Earlier on, we were asking some of our guests about the business model on telco, because, you know, telcos have been struggling, they had owned infrastructure. So when you own infrastructure, it's hard to go out of business unless you actually run out of cash, but they had plenty of working capital, but they got to get their business model. You guys have any thoughts on as telco starts to modernize, whether they migrate and modernize or modernize and migrate with cloud, what's hopeful things that you can share that's showing business models for telco? Because 5G, someone's got to pay for it. It's not inexpensive to roll out 5G. >> So, what we're seeing with our telco customers is that they're finally beginning to realize that they can actually accelerate their time of revenue with new services, with a software defined infrastructure. So, I think when first we met, you know, we were in the early stages of developing the market for telco with software defined. But we've crossed the chasm now to where we have over a hundred discreet telcos that are in production on our platform. And so we have proof points that says, "Okay, now they can accelerate time to new revenue". What we're focused on now is helping them extend that out to the edge. And as you know, partners with Lakshmi, we see the telcos as a route to the enterprise market for our edge an IoT solutions. Right, so there's an opportunity for telcos to participate not just in the cloud economy but the edge economy. In terms of the business models, the change is driving the business model transformation. You know, the technology is driving business model transformation. But it's an excellent point. Its operating models are transforming, business models are transforming, and interestingly enough, commercial models are transforming as well. >> Lakshmi, you know the app side's going to be where the growth is now. Getting back to the good thing, once that infrastructure is stable, the apps can come out. So the application development, the microservices, that kind of to me connects that Kubernetes piece to it. That is an opportunity to telco providers, right? >> Yeah, absolutely. I mean again, it's all about deploying and managing applications right at the edge and so the infrastructure that we're building, with all of the announcements that you heard and the features that we're adding into the product profile is really about how do you deploy and manage these applications right down at the device level and that's really where I think it's going to transform. >> A lot of action. >> A study came out just yesterday that the edge market is targeted to be a $4.1 trillion market. >> Yeah, it's going to be huge. >> That's trillion with a T. >> Yeah, it's going to be huge. >> So, wondering what you can say about the ecosystem. Because, you know we've looked, VMware has always had ecosystems but it's many ecosystems, and you've got a cloud marketplace, and there's lots of different customers so will some of your existing partners go along with this, is it building out a new suite, you know, when you look at the edge and IoT? >> I think there will be a group of partners that come along, for sure, but, you know, IoT, especially when you think about industrial IoT, it is a new space of players and we're building that ecosystem and trying to figure out what customers want, right? Because, it's an ocean, you could boil it but that may not be the right approach. >> Yeah, I mean, it's like you said, there's a T on the TAM. It's a huge, huge TAM. It's going to be a huge application boom and IT culture's got to evolve from that perimeter-based security to a surface area that's out there, that's one light bulb on a factory, that IP enabled, could be a malware entry point. It could be something for a worm to get in there. >> Well, it's really like any device. What's that, any-- >> Any device, any application, any device, any Cloud. >> Any cloud, I think in IoT, it's anywhere. >> Anywhere, exactly. >> Totally, totally. >> And to your very accurate point about the security associated with that, right? In the telcos, actually owning that last mile. Right, so when we talk about $4.1 trillion of opportunity, and the need to develop an ecosystem that can support those edge and IoT solutions, the telcos really are in the cat seat to take advantage of that because they own that last mile of customer access, customer influence, they own the cell towers. Right, so as we push compute out to the radio access, telcos have an opportunity to participate. >> Honore, I want to get your thoughts while you're here and Lakshmi, if you can chime in, that's cool too. I'm doing a big editorial on industrial IoT national security. This all kind of leads into policy, potential regulation. You know, I mentioned tech for good, tech for bad is neutral how it's shaped. I'm assuming you guys are going to take a shape in some of those conversations. Any thoughts on regulatory things happening because with cyber security, cyber war that's happening on our digital turf, the telcos are in a prime position to assist and help shape that, you guys can do that. Any thoughts on how you see that, that conversation? Anything you'd like to add? >> So VMware is participating in consortiums associate with those very topics. And of course we are developing technology with an appreciation and understanding respect for the governing agencies across every country as it relates to privacy and security. And so I'm sure, you know and it varies from country to country. In terms of what data you have access to and how you deliver that data and what you do with that data, that's a really hot topic in Washington these days, right? >> And software helps too. >> Software does help, right? You have so much flexibility with software but at the same time you have so much risk that you have to prevent. What we've learned is, it's really about the individual's information. Whether that is a device or an industrial device or an end user or a potentially, a point of presence. It really does depend on what you do with that data, who touches the data, and where is that data going to be housed. And so each of the different countries, each of the different telcos, depending on their location are adhering to the governmental requirements for who does what with the data. >> Yeah, it's interesting, we just did a power panel in our studio, we had experts come in talking about called the "Cybergeddon" scenario, which is a hacker taking over not just malware and getting penetrated with worms and getting access to data, but actually taking over physical devices to harm people. So, this is kind of a nation threat thing. It's not so much a corporate thing, but you know, there is a shaping opportunity here when we're trying to identify where, you know, good governance, at least from a policy stand point, tech are coming together. More and more, it's happening. >> And of course, we participate very actively here in the U.S., right? Because we are a U.S. headquartered company. We try to participate where we can in some of the other countries for the regulatory agencies. And we're a part of the world economic forum. So through that vehicle, you know, through that consortium we're also trying to influence, for good, of course. We just recently, we announced this morning that we acquired Uhana and Uhana is an artificial intelligence machine learning and specific to telco, it will observe, analyze and report back on data all the way to the consumer level across a radio access network. And the one question we get asked from every telco that we do business with is, "What do you do with the data?" And of course, we don't do anything with the data. In that particular technology, we're observing it but we don't necessarily touch it. But you're exactly right, I think it's something that's going to be a hot topic for a time, awhile to come. >> It's an opportunity for tech for good. Guys, thanks for coming on, sharing your insights. Great to see you again, thanks for coming on. Great insights, a lot changing and certainly very relevant, the IoT Edge, telco, IoT's all happening, AI is a part of it. It's theCUBE, live coverage. I'm John Furrier with Stu Miniman. Be right back after this short break. (light techno music)

(funky music) >> Announcer: Live from San Francisco celebrating 10 years of high tech coverage it's "theCUBE" covering Vmworld 2019 brought to you by VMware and its ecosystem partners >> John: Hey welcome back everyone its "theCUBE" live coverage here of VMworld 2019. We're in Moscone North in San Francisco, California. I'm John Furrier, Dave Vellante. Our tenth year covering VMworlds. The last show that's still around since "theCUBE" started. EMC World's now a part of Dell Technology World so VMworld was our first show of "theCUBE" in 2010 and we're here with then the Senior Director now the CMO of VMware Robin Matlock. Great to have you. Thanks for coming. 10 years ago we were across the street at the South. The first ever "CUBE", now 10 years later, what a run. Thanks for coming on. Appreciate it. >> Robin: Well how 'about the fact that this is number 11 VMworld for me so I think we're on, like, number 16 or so for VMworld so, yeah, we've driving been this ship for a while and it's still going strong. >> John: And, you know, when you came in the studio we did a little preview video and one of the things we talked about and you jumped on was this notion of resiliency around VMware. I want to get into that because the keynote this year I thought really used some of his primetime real estate to highlight Tech for Good and really some of the efforts around that so 1. Shareholder value, you guys have been doing great. Stock prices up. But in this era of, you know, corporate responsibility and accountability, this Tech for Good message is real. You guys have been doing it for a while. It's not new, it's not like you're doing it for fashion, it's the real deal and it was a big part of the keynote. >> Robin: It was. In fact, it was really a highlight for part of the keynote for me personally. I mean, I think when it's in our DNA, and that is consistent with our values, and we've been at that for some time. We have values that are all about, you know, customer and community and that's who we are. We also have very high aspirations that of course we have to be performant. We have to perform well as a business and deliver shareholder value but that isn't enough. You know, I do think that Pat leads this narrative that we as a company have to think about giving back more than we take. And it's not just PowerPoint slides, it's real. We empower our employees. I hope you enjoyed the story about Callum Eade swimming the English Channel all for a cause that he chose. He raised the money, he drove that and VMware just opens up those opportunities to allow our employees to do that so I think, we think it's a really important topic, we tried to give it a lot of air time, and give a way for the attendees to connect with it and see what they could take action against. >> John: And also, you guys are also voted one of the best places to work. Your campus in Palo Alto, beautiful and it is a great place to work. But this is the ethos, but it's still competitive and had Carl Eschenbach recently in our studios in Palo Alto and he made a comment he's like, "You know, I've been at VMware "for many, many years", now he's a VC at Sequoia Capital, and Carl said, "You know, everyone's been "trying to kill VMware. This is going to VMware, "that's going to kill virtuals." The resiliency just around the staying power of the product and technology leadership happens. This year it's containers, the attendees are excited by it, the numbers are up, 20,000 people here. Still evolution on the technology side, still great community. >> Robin: Yeah, I mean I think, you know resiliency is in the fabric of VMware but I think innovation is what is the secret sauce and we know in Silicon Valley you better innovate and keep moving forward or you're going to find yourself kind of, left out and, you know, Pat's been an incredible visionary. He's got a team of leaders that are very confident, strong technological disrupters. I mean some of the big acquisitions that we announced just last Thursday at earnings that we are educating folks here about, the intent to acquire Pivotal, the intent to acquire Carbon Black, you know, further that we'll either do it organically or we will acquire interesting combinations of companies to drive unique value to our customers. So I think there was a whole bunch of that today. >> Dave: We were talking in "theCUBE" earlier, Robin, about how now it's a post-virtual machine world and if we go back to 2009, which was my first VMworld as well, Paul Maritz at the time said we're building this software mainframe. Now, of course, you got promoted and I'm sure killed that mainframe from all marketing but (laughs) so well done but you kind of evolved the software-defined data center vision. But one of the takeaways for me from the keynote was this notion of any workload, any app , which was kind of the vision back then and now in a cloud which the cloud wasn't as prominent then. And so from a marketing standpoint you've really, the vision has been consistent but now with all these acquisitions you're making you're really embracing a much broader vision and your marketing message has to evolve as well. >> Robin: To support that, I think the fact that our vision has been incredibly consistent for many years now, I mean, that's Pat's leadership kind of setting that foundation for the company. My job as a marketer is to help find the way to articulate that in a way that's consumable and people understand. But what's happened over the years is we deliver on that vision 'cause, you know, a vision it's not all perfect, we don't have every piece of it or it's not all optimized. All of these moves year after year are just validating and supporting the delivery of that vision to our customers and I think the big moves this year are no different, whether it's Tanzu for Kubernetes, whether it's the Carbon Black acquisition idea, whether it's Pivotal, these are just steps along a journey that's going to deliver on our vision which is delivering any application on any cloud consumed by any device, all with security intrinsically built in the fabric. >> Dave: Well and the gauntlet that you lay down this year in talking to your practitioner audience was that technologists who master multi-cloud will own the next decade. Okay. That kind of says it all, right? And that is a strong message that you're sending to your buyers, to your practitioners so. >> Robin: Yeah, and I think the people that are right here at VMworld, these are the kinds of technologists that have that opportunity in front of them. That's why this whole notion of make your mark it's like, lean into this opportunity. Betting on VMware, building your career on virtualization has opened up many opportunities. It went from compute to storage to networking. It's now into multi-cloud. These are incredible opportunities and these technologists are the ones that can deliver this value for their enterprises. >> Dave: And there's diversity in the messages, you know, all the major cloud players say, "Well no. Just our cloud." You guys are pushing in a new direction. I mean that's what leaders are supposed to do, right? >> Robin: Our strategy has always been about choice, you know, we've really been advocates of letting customers choose the path that's right for them and we know in this cloud war that we're all a part of that customers they are choosing. Some are leaning into AWS, some are leaning into Azure, some are biased towards IBM. Our job is really to enable them to have a rich, powerful experience without friction, efficiently, and operate those workloads in any of those environments. >> John: Have you seen any demographic shift in your primary audience because obviously the operating side, even with Kubernetes, they love it, containers, a messaging channel that's in and of itself but still containers seems to be that next step function with Kubernetes that VM's brought to computing. But when you bring in the dev and the ops that's where it starts to get magical when the operating's got to meet up with the developers. That's been the theme. cloud-Native. All this enablement's coming in. Has there been a shift in demographics to your audience? >> Robin: Well it is an evolving journey, if you will, and yes but it's still, I think we have a long ways to go. We are largely still have an infrastructure audience here, there's a mobility crowd here, there's a cloud architect crowd here. The new audiences are going to be the platform architects that dev/ops community and we do have shifts in that but I would say that's part of the value as we bring Pivotal into the family, we can now merge these audiences and, I think, do a much formidable job at that. >> John: It's interesting, Telco will have them on later. 5G was a big part of the keynote as well >> Robin: Yeah. >> John: A new opportunity, a new affinity group there. >> Robin: Without a doubt, I mean, the whole Edge and Telco clouds are really opening up new entirely new markets. The Telco, the 5G, we do think that's going to be a very significant wave and is going to create new opportunity for new application types, new fundamental architectures that we can now merge between Telco and Enterprise so we think it's really a rich ground for innovation. >> John: You mentioned Pivotal, I think that's more of they were already in the fold, now they're officially in the fold with Dell Technologies but your other acquisitions, there's a lot of them. You got to kind of bring them into the fold so is there the marketing playbook do you have an off-site meeting and you just give them the playbook? How do you handle all the integrations? 'Cause that's always a big challenge. IT integration, messaging integration, again it helps if they're on the fault line of the value proposition but >> Yeah. >> John: What's your strategy to integrate all these companies? >> Robin: Well, you know, any time you're doing a lot of mergers and acquisitions you definitely have to think very strategically about integration and then sometimes you want to integrate fully, right away and sometimes you want to let an acquired company be stand-alone for a little while. Got to get used to the culture a bit-- >> John: Like Velocloud? >> Robin: Velocloud is kind of independent-- >> John: They've got their own building. >> Robin: within the networking team. AirWatch was held very independent for a couple of years. Some other ones are just tuck-ins. You just bring 'em right into the family, you just merge 'em in, it just depends on the size, the scope, the culture and the strategy. I think we take a very purposeful approach to M&A integration and we don't really have a one-size-fits-all strategy. Depends on the circumstances. >> Dave: So follow up on that because clearly there's an engineering culture here at VMware and take the Carbon Black example for instance you talked about how you guys have sort of pretested it with AppDefense but from your standpoint, how do you think about the architecture of the marketing and the messaging? I think you answered it in part. It was sometimes it makes sense to keep it separate sometimes but when you think about the vision do you look at it and say, "Okay this plugs nicely into the vision "and so here's what I'm going to do?" How integrated is it with the rest of the sort of decision-making process? >> Robin: Well, you know, I would take the position that all these acquisitions are plugging into the vision. They are that's why we're buying them because they are very aligned to our strategy and vision. Now I have the challenge as a marketer to deal with a lot of different brands that are coming into the family. I mean, how and when do I consolidate and kind of unite the brands and that is a journey that we're going to be on. We'll take some time to do that. You don't want to rush things in that regard. I think it's very important that the market sees one VMware, one vision and strategy, you know, if it's delivered in a product and it's through an acquisition as a different brand that's okay, we can work on that over time but as long as we're laying out one strategy and vision to the marketplace and just showing these are evidence of proof points of that journey. >> John: Yeah. I mean, you guys, you're pretty clear. Your strategy is to evaluate, understand where they are in the value chain of what you're trying to do. Unlike others like IBM which brings companies in quickly, makes them IBM, you guys are a little bit different, You'll play with whatever the market will give you. That's pretty much what I hear you're saying. >> Robin: Well for example, Carbon Black, experts in security, you know. I think we want to capitalize on that expertise. We want to protect that expertise. They've already been partnering with AppDefense now for some period of time rather than, you know, it's like which one is >> Right. >> Robin: consuming the other (laughing) so our strategy is let's combine AppDefense with Carbon Black and then start working with Patrick and Carbon Black to merge that into the-- >> Yeah. >> Dave: Organizationally, I think that's, at least what I read >> Yeah. >> Dave: was you can set up essentially a cloud security division, right, that Patrick is going to >> That Patrick is going to run. >> Dave: run, so >> That's right. >> John: Okay so VMworld 2019, what's the update here? Give us some factoids, some of the exciting things happening here. We're in the meadow, there's birds chirping here. This is Moscone North, nice build-out, always good build-outs here. Moscone, we're back in from Vegas but what's going on? Labs, activities-- >> Robin: We've got it >> Give the-- >> Robin: all, John >> Give us the highlights. >> Dave: Klingons >> That's right. >> Robin: First of all you've got two great days of keynotes, right, those are really important highlights. Tomorrow we're going to do some really interesting things, demo, technical, deep dive. Great guest celebrity speakers, right, We're going with the sports theme this year and elite athletes and what they're giving back to the world with Lindsey Vonn and Steve Young. But here for the program we have the Hands-On Labs are on fire. They broke records on Sunday so I know they've been really well-attended and consumed. We have over 600 break-outs, so many it's mind-boggling. We have 230 sponsors in the Solutions Exchange and that's probably a place where you can go not just to get the VMware stuff but get that good exposure and lay of the land of the entire ecosystem. And they're all showcasing their innovation. What's new, what's the latest. So I think those give people a really good quick snapshot in one week, you can pretty much get an overview of the entire industry. >> John: Are there any must-sees in your opinion? >> Robin: (breathing in) Oh-- >> John: Or that people are talking about? >> Robin: I think for sure you got to get into this Kubernetes stuff. If you don't come out of this week of VMworld with a good handle on what is Tanzu, what's Tanzu Mission Control, what are we doing with the Heptio acquisition, what is PKS evolution happening, I think you would be missing something if you don't really grok that. Project Pacific work, Kubernetes in vSphere, tightly integrated, so that's a must-do. I think there's a lot happening in the networking space, right. Pat was pretty bold up there about, you know, what is the opportunity relative to network virtualization and the time is now so I think you've really got to get into that from the data center to the Edge to the cloud. Network transformation's hot. And then of course I think the cloud and I think we're really clear on hybrid-cloud and multi-cloud and how to really think about those environments and how, if you're architecting cloud for your company, what you want to be thinking about, what are we doing across multi-cloud, and, you know, I think all that hybrid-cloud stuff, it's all there. >> Dave: As we move to this, you know, this post-VMworld, VMware world how do you-- >> Robin: Is there a post-VMware world? >> Dave: What role, post-virtual-- >> John: Oh look at that, there we go. (laughing) >> Robin: I don't think there's a post-VMware world. >> Dave: Post-VM. I mean virtual machines. >> Robin: Virtualization. >> John: Are you changing the name to container world? >> Robin: No. (laughing) >> Dave: Right, exactly. So what (laughing) yeah what specifically are you guys doing to sort of educate folks, I mean, obviously you've got a lot of Kubernetes sessions, et cetera but just in terms of helping people sort of transform their skill sets into infrastructures of code, being able to take advantage of Kubernetes, you know, we've seen some things in the industry at events like this where you know, guys learn how to program in Python or, you know, whatever it is >> Right. >> Dave: Are there specific plans to do that? Is that actually happening at the event or? >> Robin: Well that's part of what all this content is about, I mean, you know, 600 break-out sessions aren't about, you know, compute virtualization. You can find those but this is about all these different dimensions, right? Whether it's what is Kubernetes, fundamentals, how you think about that in what kind of environment you're running. And I think that's the spirit of what VMworld is about. It's about hands-on, it's about meet the experts, it's about sessions, it's about the ecosystem, it's about having that all at your disposal in one week. >> You forgot something. >> Oh did I? >> The parties. >> The party? >> Everyone >> Well that's not helping your technical-- >> Everyone >> Aptitude >> Everyone knows VMworld has great parties at night and that's where all the action, you guys work hard/play hard one of the ethos of VMware culture. >> Robin: That's right, that's right. Well, we do work hard/play hard because this is intense, right? These guys are trying to jam as much as they can into four days and so we got to let off a little steam and OneRepublic is on stage on Wednesday night. We're going to have a great time. But I do think it's on the back drop of them here they are just like sponges trying to absorb this information. >> John: My final question is, and you guys brought it up in the keynote, around the tech industry good, bad, and Pat says neutral, it's how you shape the technology. Really a call to action and a strategic imperative to be more proactive in accountability and driving change for good. So I got to ask you about the word trust. I've seen a lot of marketing around companies always try to market around trust. Now more than ever the trust, whether it's fake news, company responsibility to security, which is a big part of what you guys do. How do you see that a marketer and what's the conscience of VMware because trust is certainly a big part of what you guys do. Is that a marketing, going to be a marketing ethos? Is it built into everything? Just curious how you personally feel about the word trust. >> Robin: Yeah, well first of all, I think it's foundational to doing good, healthy business. I think you got to be very careful as a marketer to market trust. I think you need to demonstrate your trustworthiness. You need to be consistent. You need to be credible. You need to be there when the times are tough. You need to be, you know, not always asking for something in return and if you earn trust you don't really have to say it. I believe we can position our validity and our credibility proven, you know, having customers say that we're trustworthy, having customers articulate >> Yeah >> Robin: why they depend on us, I believe that's more effective for our customers and, at the end of the day, probably more authentic. >> John: Yeah, and I think people, yeah that tends to be the track record of people who say it maybe haven't earned it, right, earning it's the better marketing strategy-- Yeah, I think these 20,000 (laughing) people are saying it as they show up here with their time and energy and investment. And I think our customers, you heard from a lot of customers on stage today. Gap, Freddie Mac, Verizon, there'll be more tomorrow. You know, I think there's over 100 customers in these sessions here and they're here advocating because they trust VMware. >> John: Well they run their business on you guys. Dave had a survey hey did, just published it yesterday, the spend is not going down. I mean the cloud impacts your business, you're getting into the cloud so that's pretty obvious but just overall the business is healthy >> Oh very >> John: for VMware (laughing) >> Robin: Very healthy. And you know we do that by really trying to have a balanced approach. It is about shareholder value but it's about tech as a force for good, we're passionate about that and ultimately we put customers at the center of our thinking, of our decisions, of our behaviors, and I think that ultimately keeps rewarding us. >> John: Well, Robin, it's been great to work with you over the past 10 years. Continue on. I think you guys have earned the trust, certainly the proof is in the results, and, you know, it is what it is, and the community votes with their wallet on the product and their participation so congratulations. >> Robin: Well if that's an indicator, I think we're getting a pretty good report card. >> John: Thanks, yeah. (laughing) >> Thanks for inviting me. Love being here, guys. Take care. >> John: Alright, Robin Matlock, CMO of VMware here inside "theCUBE" for our 10th year but also as VMware goes to the next level step function with virtualization to containers, Kubernetes, big theme here, I'm John with Dave Vallente, stay with us for more coverage after this short break. (funky music)

>> Announcer: Live from San Fransciso, celebrating 10 years of hi-tech coverage, it's the theCUBE, covering VMworld 2019. Brought to you by VMware and its eco-system partners. >> Welcome back everyone. It's theCUBE's live coverage at VMworld 2019. I'm John Furrier, Dave Vellante, Dave, 10 years doing theCUBE at VMworld, what a transformation, lot of technologies coming back into the center of all the action. SD-WAN's one of them, we got two great guests, two entrepreneurs, the co-founders of VeloCloud. Sanjay Uppal who's the VP and GM of VeloCloud Business Unit part of VMware, VMware bought on December 2017, Steve Woo, Senior Director of VeloCloud Business Unit. Also co-founder, you guys both strong in networking, entrepreneurs, congratulations on. >> Thank you. >> That was two years ago. Okay, so, we were reminiscing about 10 years, 2010, when we first started doing theCUBE to now, but more than ever SD-WAN, just over the past 24 months, 36 months, a lot's changing as cloud has become more obvious. Certainly public cloud, no debate, but we start talking about cloud 2.0. Enterprise requirements are much unique and different that just, you know, being born in the cloud at least like the startups are. So, whole different challenges. This is a kind of difficult, it's a networking challenge. Networking and security are the two biggest, hottest areas right now in tech as clouds scale, the enterprise comes in. What's the vision, Sanjay? >> So what's going on here as you were rightly pointing out, cloud is changing. It's no longer people just want to get from private to public, it's a multi-cloud world and it's a hybrid cloud world. Now, that's talking at it from the compute standpoint. But, other services are also moving to the cloud, security services are moving to the cloud, so when you look at it from that standpoint, our customers want to get from the clients, which could be a user, it could be a thing, it could be a machine, all the way to the container which has the application. So we're looking at SD-WAN as being that fabric that connects from the client to the cloud to the container. And as you're rightly pointing out, networking and security is the hot area right now. So how does security and networking impact this client to cloud to container world is where SD-WAN is headed toady. >> And Pat Gelsinger who just came fresh off the keynote, he'll be on tomorrow, I'm going to ask him this question directly but, we've always been saying public cloud is such a great resource, I mean, who doesn't want all that massive compute, massive storage, if you can use it? But when you start getting into hybrid, right? I said the data center's an edge. And he's talking about a thin edge and a big edge and a thick edge, so when you're a networking packet, when you're in networking you move stuff around, you're an edge and you're a center, you're a core. These are networking concepts, this is not new, I mean, this is not new. >> Yes, this is not new. And I think the concept of the edge, as he was pointing out, there's different edges everywhere and you have to really look at it from, as you're crossing the boundary, how do you get the packets from point A to point B? Making sure that the performances are short, so you get the application layer performance, but yet not increasing your attack surface from a security standpoint. And so, the facilities that Steve and myself and other folks at VeloCloud have constructed is really reducing the attack surface by segmentation. But making sure that the conversation from the client to the cloud to the container has that assured performance, particularly for real time applications. Which are actually not easy to get right because the underlying transport may not actually help in any great way. >> So, John, you said it's not really new for you networking guys, it's really not. At the same time, Pat talked about choice versus complexity so it's a much more complex world. So you've had to change the way in which, you approach from a technology standpoint I presume? The roadmap has probably shifted, maybe you could talk about that a little bit. >> So, absolutely. So the discussion about moving to the cloud has been about the compute, but then you have to also actually look at the network, right? They forecast that 30 to 50% of the enterprise traffic is going to go to the cloud, right? But the network in the past was built for applications going to the on premise data center. So what we've had is inequality where you've had a full enterprise grade network going to the enterprise data center, but actually your cloud access was a second grade citizen. As Sanjay was saying, I still want performance, I still want security, and then in fact, as people actually expand to the cloud but actually put more and more workloads in the cloud, they start to realize, gee, where's my automation? Where's my scaling? So that still has to be done at the branch that the remote sites that need access to the cloud, and they need this automated, secure, high performing access to all the cloud workloads. Especially even that it's now moved to multi-cloud, right? So you went from on premise, a little bit in the hybrid, private cloud, now many more instances and now multi-cloud, becomes more and more complex and that's where cloud delivered SD-WAN really addresses that problem. >> So Steve, lay out the architecture, so let's just all roleplay for a second here. I'm a CCO, CIO, I'm progressive, got my hands in all the top things, certainly security's number one concern I have. And I'm building my own stack, I love the cloud, I don't want to make it a second class citizen, I really want to re-architect this. What the playbook, what do I do, what's your recommendation? >> Alright, so the playbook is, and this is advice from the cloud compute centers as well, right? Go direct to the cloud, don't back haul it through the enterprise data center and introduce latency so you now need Internet Breakout at more locations, not just the central data center. But I still need the security, so how do I have cloud security for traffic going straight to the cloud versus going back to the east west, to the data center? So really, the advantage that the SD-WAN solution has is it's actually a hybrid that has a footprint on premise but also has a cloud footprint. So Sanjay and I and VeloCloud, we have this big network of cloud gateways so you have the footprint on prem and in the cloud to have distributed security. >> So, Sanjay, talk about, back to your original bumper sticker, client, cloud, containers. So, I see that security piece. How important has the container piece become? And what is that role of the container in the future? Is it going to be a wrapper for legacy apps, is it going to be primary for new apps? Because Kubernetes clearly is orchestrating a bunch of containers and other services so the role of the container's certainly super valuable. How does that impact some of the efficiencies that's needed for networking and to ensure security? >> Yeah, great question. You know, the networking folks, and networking was always relegated to being the underlay or the plumbing. Now what's becoming important is that the applications are making their intent aware to the network. And the intent is becoming aware. As the intent becomes aware, we networking people know what to do in the SD-WAN layer, which then shields all the intricacies of what needs to get done in the underlay. So to put it in very simple terms, the container's what really drives the need and what we're doing is we're building the outcome to satisfy that need. Now containers are critical because as Pat was saying, all of the new digital applications are going to be built with containers in mind. So the reason we call it client to cloud to container is because the containers can literally be anywhere. You know, we're talking about them being in the private cloud and then the public cloud, they could be right next to where the client is because of the edge cloud. They could be in the telco network which is the telco cloud. So between these four clouds, you literally have a network of these containers and the underlying infrastructure that we are doing is to provide that SD-WAN layer that'll get the containers to talk to one another as well as to talk to the clients that are getting access to those applications. >> You know, sometimes it takes a history lesson to figure out the future. I was talking with Steve Herrod and I want to get your reaction to a comment he made to me when we were talking about the impact of VMware back in the old days, you know, virtualization. Virtualization kind of came out as an application and then it became what it did in the server world, just changed the game. But one key thing that we talked about and he mentioned was, the key was that virtualization allowed for massive efficiencies. Not just on price and consolidation of service and efficiency on price, but it enabled more efficiencies in performance without any code changes to the application. So the question is, is that, okay, containers I buy 100%, we agree, since Docker and early days to now with the Kubernetes, containers are going to be a game changer. What's that dynamic that's going to come next? Is there a view from your perspective on that step up function of value without a lot of application rewrites or network changes? I mean, I'm just trying to figure out how that fits together what's your view on that? >> Yeah, let me drag this first and then maybe Steve can comment as well, so. The first thing is that SD-WAN, just like server virtualization did, we're doing what server virtualization was for the network. So you don't require any changes to your underlay, meaning that you don't require changes to your broadband, you don't require changes to your LTE and even 5G, as well as the NPLS network so you don't have to twiddle with those bits, we manage it all in the overlay, this is exactly similar to what VMs did when it came to server virtualization. Now, when containers come in, because we get the visibility of what the container wants, we can both in real time, as well as a priori, figure out how the network should be configured. And that is a game changer because a container could be right next to you, it could be in the cloud, far edge, thin edge, it's not just a destination, it's literally everywhere. And that underlying fabric, if the underlying fabric of the network doesn't work, your digital transformation project for containers is not going to work either. You there's a key building block over there. >> So if I get this right, you're saying is that because you have that underlay visibility without any changes, by making efficiencies there, you then can understand what the container wants so you're bringing intelligence to the container and vice versa? >> Yes, so that containers tells us what do they need to run, I mean the application tells us, which is built with containers. And what we do is we dynamically measure how the network is performing, and we adapt to what the container wants. We call this outcome driven. We know what the outcome is and we adapt the networking to deliver that outcome. >> So I want to ask you guys, so Pat talked today about 8% better improvement relative to bare metal, but it's really about the entire system, the entire network. And I'm curious as to how you guys are evolving. You know, John and I talk about cloud 2.0, how you're evolving to support that. Because it's really about application performance in total, what the user sees, not what I can measure in some on prem data center, I'm not saying Pat was doing that, but my guess to deduce the numbers for the keynote they probably did do that. So, how is your infrastructure and architecture evolving to support application performance across the network? >> Right, right. So, to add to what Sanjay was saying in terms of just being aware of the requirements of the containers and optimizing and having visibility but actually, leverage the container and virtual machine technology in the SD-WAN platform itself. So in terms of solving the network problem, it's not just about us virtualizing the network resources and then choosing the best path across the network to the applications, but actually hosting some applications that deserve to be moved out to the edge to help solve the performance problem as well. A good example is IOT, where you just have a lot of data, a lot of real time data that needs real time control response instead of necessarily going over the most efficient path to an existing cloud data center on premise, perhaps do some of the analytics actually in the SD-WAN network edge, and we can do that with containers. >> So what about the real time aspect? Because I think that's a key point, you mentioned that, Sanjay, earlier. Because, I remember, not the date myself, but I remember back in the days when policy was a revolution, oh my God, we can do policy based stuff! And provisional stuff, that was an, oh my God, static network, though, I mean everything was provisioned, buttoned up nicely, you're not dealing with a static network when you're dealing with services. So you're moving up the stack, we're talking containers now, at the application level, assuming you have the fabric down here. There's going to be a lot of stuff being turned on, turned off, things provisioning, unprovisioning, so a lot of dynamic nature going on. So, if I see this right, policy is key and enables some intelligence, it's got to have an impact on the real time so talk about what real time means, some of the challenges, is it just a transactional issue? Is it latency? And is that where the container magic happens? Just unpack that a little bit. >> So there's really four classes of real time applications that we see. Voice, video, VDI and IOT. Now, there's of course, other applications that are built from these building blocks or these types of application, sub-applications. Now, each of these has a latency requirement, but it also has a requirement in terms of dynamism, so as you know, video can change dramatically from one moment to the other, variable portrayed video, right? Voice doesn't change as dramatically but has very stringent requirements in terms of when that packet should show up. So when we look at these, and you put them on a best effort network that only says that they're going to get the packet from point A to point B, these real time applications may not work. So what we have constructed is an overlay that supports realtime applications even on best effort networks. And this is actually a fairly significant shift in the industry, like if you look at running, you know, all of us have done a voice call, on a broadband and you hear these artifacts and rubberbanding and you can't hear the other person, right? But with VeloCloud, we're able to provide guarantees running on best effort networks. And I think that is a game changer. That is going to be a game changer also as the applications get much more dynamic. I mean, you bring in containers, one of the issues is where should that application run? That can be decided in real time. VMware invented this whole vMotion idea, well how about vMotioning the container? And how are you going to vMotion it and how are you going to decide where that container should be? So all of this is really what a networking infrastructure can provide for you in real time. >> And you've got this overlay, and without performance degradation or dramatic performance degradation, right? So what's the secret sauce behind that? >> So, the secret sauce in our solution is something we call dynamic multi-path optimization. So just like virtualization was done for the data center, first continuously monitor the resource's performance, capacity of the different underlay resources and then in real time, recognizing the business priority of the different applications, instantly put the workload, or in this case, the network WAN traffic on the right resource and actually have the flexibility to move it as conditions change, as capacity changes. And further than that, if you can't stare around the problems that we may see in the network, we can actually remediate the actual traffic streams and since we're on both ends we can have a lot of optimization tricks and actually make sure that real time data applications work perfectly. >> So it's a data analysis and a math problem to solve? >> Yeah, so we use that for real time optimization, and then the other benefit is we have this huge, in the cloud, of course, huge data lake of information that we continue to share more and more with the users so they can see the overlay, so that the entire underlay environment of the WAN, where it's going in the different hybrid cloud, and also the overlay performance. There's going to be huge value in that in terms of solving network problems. >> Are the telcos a bottleneck to the future or is 5G going to solve all that, or? >> Telcos are a partner, and more than 50% of our business is done with the telco. So it's us working with the telco and then going eventually to the enterprise. >> And they're moving at the speed that you want em to move? They're saddled with pressures on costs and network function virtualization, and it's a complicated problem. >> Right, as you heard Pat say in the morning, the telcos are going through a dramatic change. Because they're shifting away from this custom proprietary hardware infrastructure into a completely software driven world, right? And so the telco is a critical partner. They are virtualizing their own network, they are virtualizing the core of the network using VMware and other technologies, and as they're doing that, they're virtualizing what goes out to the enterprise customer. And the network virtualization piece, of course, is built on SD-WAN. One thing I wanted to add to what Steve said, is that we collect almost 10 billion flow records a day. From across all of our 150,000 sites, and this is a treasure trove of information. It is this information that allows us to develop the next generation algorithms. We're the only ones who have that much information that is collected, it's rich information, it's about how the network performs, how the applications are, where it is going, how the application workloads are. And using this we generate the next generation algorithms that'll optimize the networks and make them more secure. >> And that is the benefit of SaaS, the beautiful thing about having a SaaS platform, easy to stand up, the data becomes a really critical aspect for making the network smarter, to your point, this is all those data points. It's an operating, sounds like an operating system to me. >> It's a highly distributed network operating system. >> Guys, thanks for coming on, great insight. Final question to end the segment, as two co-founders and entrepreneurs, when you started VeloCloud, knowing what's going on today, explain in your entrepreneurial mind, where this is going, because this isn't your, as they say, grandfather's SD-WAN market anymore. It's really turning into, quite frankly, next generation networking, next generation software, you mentioned it's network operating system, it's one big distributed network. And all these new things are happening, what's the vision? Is this what you thought it would be when you guys started? >> Well, you know, the amazing this is many startups usually go through a pivot, right? They start off as one thing and maybe more than one pivot, in fact, I think it was a couple of years ago that we just for grins, looked at the first few slides that Steve has made when we had got started. For our seed investor, where we actually had absolutely nothing! And it was, actually is very true, the graphics were very very poor, other than that the idea of moving to the cloud and using the cloud as the network, even at that time we said the cloud is the network. That has not changed. And so, the enduring vision here is that regardless of where you are, you're on laptops right now, clients could be sensors, actuators, all of this is going to go through a network cloud. And that network cloud is going to be responsible for getting you to any final destination. Whether it's your nearby container or whether it's running in some public cloud. And so the vision is trust the network, it's going to make sure that it'll figure out whether you should be on Wi-Fi or Bluetooth or LTE or 5G or whatever have you. You just say this application's important to me. The network is going to take care of the rest of it. >> Well you guys are certainly music to our ears, we love network effects, we think network effects is not just the way media is today but also technology, the network is all interconnected it's all instrumented, you can get the data. There's no blindspots, if you can instrument it, you can automate it. You guys are pioneers, thanks for coming on theCUBE, appreciate it. >> Good to have ya. >> Thank you. >> CUBE coverage here, 10 years covering VWworld, I'm John Furrier, Dave Vellante. Back with more live coverage after this short break. (electronic music)

>> (upbeat music) From San Francisco it's the CUBE covering VMware radio 2019, brought to you by VM ware. >> Welcome to the cube Lisa Martin with John Furrier in our exclusive coverage of VM ware Radio 2019 in San Francisco. John and I are pleased to welcome back to the cube Rajiv Ramaswami, COO of products and cloud services Rajiv, Welcome back >> Rajiv Ramaswami: Oh thank you glad to be here as always >> Lisa Martin: 15th annual radio a lot of research a lot of innovation. Give our viewers an idea of some of the historical products and services that have come out of the radio and the innovation programs at VMware has been doing for a long time >> Rajiv Ramaswami: Yeah I mean, I'm excited about Radio right I mean many of our key innovations came out of Radio. Very early back in the days the fundamental concepts of vSphere replication and disaster recovery came out of Radio papers, a long time ago. Some of the innovations within vSAN were showcased at the radio many many years ago. So across the board, I would say many of the products you know are key portions of the products were deployed I mean in the form of Radio papers over the years and if you look at this year for example you know we can see how things have changed with the times as VMware is evolved, so does Radio along the way. So this year, I was struck by the number of papers on machine learning and AI right, it's forward-looking of course everything we do here and it's just now ML is now across many of our products and that's being you know seen in Radio and of course, what we see at Radio is always more forward-looking than what's actually in the products. So that's an area I see a lot of work and another area I see a lot of work on is Kubernetes and the cloud native and then of course the traditional areas of how to optimize storage, networking and even when it comes to networking and so forth, papers on cloud networking and how you know we can optimize for networking in the cloud So in general, I mean the trend here is a reflection of what we are probably likely to do in the next several years >> John Furrier: One of your jobs as Chief Operating Officer I see, to operate them on the product side of the business generate that kind of enablement for the sales team and ultimately customers right. >> Rajiv Ramaswami: Yes >> John Furrier: So you've got to kind of mind the farm here >> Rajiv Ramaswami: yeah >> John Furrier: kind of cultivate and see what's organically growing out of VMware from the top engineering and stuff top papers. what's the process? how do you go attack the all the action because there's a lot of forward-looking stuff there's a lot of pie in the sky is a lot of cool different stuff that looks weird >> Rajiv Ramaswami: yes >> John Furrier: but sometimes that weird stuff looks is actually going to be the future so you got to have a broad perspective, how do you act this? >> Rajiv Ramaswami: Yeah, in fact I would say one of our biggest jobs is portfolio management. We have to look at balance our investments across this range that you talked about right so at any point in time we will have a set of technologies and products that we incubating these are relatively new sometimes new areas for us sometimes extensions to existing areas that we are incubating and these are of course businesses that don't drive much revenue right now but over times yes hopefully well right and then there are businesses, I'll give you examples of each of these now there are businesses that are in growth mode where we've already established a good product market fit we know that we can scale this business and its a different set of investments and in that growth category and then there are relatively mature businesses that we know we need to run efficiently in fact they need to generate cash that we can go back and invest into these other right and then there are things that we want to get out of and diverse so we look at our R&D portfolio along those and at any point in time there's stuff in everyone of these buckets to give you some examples of what's in each of these today obviously we have a big focus in cloud native most of that is incubation at that point right not substantial revenue, yet a big you know we've acquired Heptio for example last year to bolster our own internal efforts so a lot of work a lot of effort being put into that with the idea of building a future business in a significant way some of our more recent growth business were are now very much in the scale category you look at VSAN, you look in a EXSi, you look at VeloCloud as part of the overall networking portfolio these are all in the scale category right they have substantial revenues are growing very nicely we're investing some of our other bigger businesses like vSphere which is our classic you know foundation for everything we do Yes, I would say in the mature, you know category and then over by an large we've reduced investments and some small businesses, I mean if we were to look at historically vCloud Air that the business we got out of right so these we do along the way otherwise >> John Furrier: a good call, or you quit call >> Rajiv Ramaswami: yeah so in fact one of Raghu's and my biggest jobs really is to figure out how much we put in each of the these buckets, make sure you're placing enough in the future of best category while also making sure your delivering on the numbers for the day >> John Furrier: I love that's exactly what I was going at this about the future bets >> Rajiv Ramaswami: yeah >> John Furrier: what is on the business side one of the I asked Pat Gels, I'll ask you the same thing but different context, you know this is an engineering celebration as well as kind of competition internally I guess kind of proud to be people are proud to be here kind of an elite status but engineers want to work for a company and solving hard problems >> Rajiv Ramaswami: yes >> John Furrier: also retention and attraction thing. what are some of the hard problems that you're trying to deal with on business side? you're operating some of the core products and it sounds easy to say abstraction layer make things look easy, but these are hard problems what are the hard problems that you're solving that need to come out of this world? >> Rajiv Ramaswami: yeah and some of these are better not this product they cut across every aspect of the company so far example we as a company are trying to move towards more of a cloud oriented business model right so that's why are group is called products and cloud services and those are combined in the sense that everything that we build up the product over time most of its get software also as a service and the underlying code base and the technologies are all the same great example for example is our VMware cloud offerings right they are all built on VMware cloud foundation which is offered as a software package for our customers who want to build private clouds its also available as a service from us as well as familiar for our partners. Now, for us the notion of transforming our company to be able to do both right just products from moving products to also to being delivering cloud services has a profound impact across every function R&D for sure, go to market in terms of how you align the Salesforce to sell that all our systems that are necessary to transact that business so that's a pretty big transformation that we are going through right now. >> John Furrier: That's a lot of software that needs to be code and automation is not easy >> Rajiv Ramaswami: yeah >> John Furrier: that's why machine learning problem is hot here >> Rajiv Ramaswami: absolutely yes >> Lisa Martin: What is that balance when you are looking at innovations that come out of not just radio but the other innovation programs that VMware has about managing the balance between the R&D investment and the investment that's going to be needed on the sales and marketing side to get the product or service the solution out on the market to start really dialing up this as a big revenue contributor. How do you look at that as you talk about that portfolio a minute ago and when something becomes like say it comes out of radio and it's well, this is a really good idea, but how are you looking at balancing the R&D investment versus what you know you're going to have to do to get it to market? >> Rajiv Ramaswami: yeah and by the way that's a great point there because, you know too often engineers think about hey I've the coolest product let me go build it they don't think about how it needs to be sold and the how it needs to be sold is equally important the front more important than how you build it right. So in our world so when we do our planning on an annual basis for example we look at a holistic plan that covers the entire gamut right which means R&D, sales and marketing right and when within sales and marketing, investment across what our core sales team needs to do what our specialist sales teams you know For example some of these newer products will require specialist to sell they might be targeting different buyers within the customer base right, so we have to align our R&D and go to market investments together to create a full plan for the year and we do that for pretty much every product in our portfolio >> John Furrier: what I going to ask, I want to ask you a business question I know R&D is going to be key you guys did a great job, so Congratulations but one of the things that we're seeing in the market is new shifts in the landscape of either tech enablement or trends like kubernetes or 5G gives companies an opportunity to reset their architecture >> Rajiv Ramaswami: yes >> John Furrier: and you now see with virtualization some of the things that you guys are doing we're seeing couple pivot points for customers now one cloud native, kubernetes >> Rajiv Ramaswami: yes >> John Furrier: software - defined, your on-premise cloud operations, not C private cloud [Rajiv Ramaswami] yeah >> John Furrier: cloud and then like 5G >> Rajiv Ramaswami: yes >> John Furrier: a little bit of you know networking these are major trends >> Rajiv Ramaswami: yes >> John Furrier: how should companies start thinking? okay I have an opportunity as a catalyst to shift what what's your take on that trend advice to those customers because they might be able to do wholesale changes or migration >> Rajiv Ramaswami: Yeah, look from a customer perspective right, every one of them is going through this transformational journey and depending on you know where they are right, so if you take Telco's for example that's where the 5G applies primarily, I mean they have they go through this big capital cycles of investment that are geared towards massive technology generation size so last generation was 4G LTE and now the next thing is 5G and that is big new capital cycle and there's an opportunity at that time for them to fundamentally re-architect how they deployed their infrastructure and that's what they are doing with network function virtualization is 5G and so if 5G and we kind of go hand-in-hand together and its an opportunity too for them to go deploy a new infrastructure that is much more virtualized much more using standard hardware running everything in virtualized applications what's right the network function than they could before >> John Furrier: so the edge now is more dynamic than it was years ago so we look at 4G. What we have, what year that was, but I mean that even with healthy there's many many years ago the edge was not built out now you have a programmable intelligent, the edge market >> Rajiv Ramaswami: exactly >> John Furrier: how is 5G going to impact the Telco's? because this might be the right time for them to actually have a real business model. >> Rajiv Ramaswami: Yeah, well look I think 5G's offers them to try out many different models for example given that many the 5G radios are much more shorter range right, so your going to deploy more smaller cell sizes that means for example there's a new business model possible where you deploy radio multiple operators are sharing that radio, right where as traditionally today you know your base station so AT&T has their own, Verizon has their own tomorrow you could be okay you could have a bunch of >> John Furrier: basing radio service provider >> Rajiv Ramaswami: yeah in the buildings right here that and that could be shared by all the providers so its a completely different business model so those are the kind of things that 5G enables >> Lisa Martin: are there any projects that are being featured here talked about here at radio 2019 along the spirit of and NFP,5G >> Rajiv Ramaswami: Oh yeah there's a bunch of projects I mean on the floor right, you can go in fact even in the posters that you're sitting around here you'll see a lot of projects in 5G we have some nascent efforts on this what we call networks slicing for example >> Lisa Martin: and what is that? >> Rajiv Ramaswami: so the ability are going to share the network that you deploy a single network infrastructure and you are able to slice that into chunks and have different people use those chunks >> John Furrier: and I think that points out a trend that we've been reporting least on the queue and ways people say don't move data around move compute to the edge or software-based virtualization. You're putting basically virtualization on the radio's >> Rajiv Ramaswami: yes exact software exact edge yeah, >> John Furrier: so when you look at the marketplace when you say okay VMware, it's got a transfer over one of the things that's come up a lot we've heard on the cube is a VMware's great, they don't know networking though now of course if NSX is didn't win now we know where that comes from multiple competitors. But talk about the networking aspect of what you're doing? because, the investment in this era that's the first real SDN company there's been some SDN around before but you guys not only do SDM you got networking, you got compute, security, talk about networking in the innovations there >> Rajiv Ramaswami: yeah let me talk about the division for networking and then also how its part of all the solutions right not necessarily just a stand alone sale so networking fundamentally you know it used to be about connect, for example it used to be about connecting in the campus, your laptops and desktops into the network right it was called workgroups and then campus networking or your land campus LAN then it became Wi-Fi came in there right and the in data center it was about connecting servers to storage and servers to other servers right all about this box mentality in the branch it was about putting in a branch router and providing a network connection through that right, but if you look at fundamentally what networking is evolved to now it's about connecting, what connecting users applications and data and these could be anywhere, right. you use this could be anywhere you could be sitting in a Starbucks shop accessing your applications that are sitting in a cloud someplace not even running through your enterprise network so the notion of a classic network has changed completely. so the network now is much more, it's really a virtual network because, you don't you know its not physical plumbing anymore that matter yes you need the physical plumbing the physical plumbing is going to be provided by multiple people that you as an enterprise do not even necessarily control. You might control your campus LAN you might control your data center, but you don't control the could right, you don't control running over a service partner networked into the edge of the branch and so fundamentally now the new networking layer has to be a layer of software that really delivers and connects and secures these applications users and data and that's really the concept of SDN that's evolved into what we call the virtual cloud Network and that fundamentally is our focus and for us we're not really burdened by the fact that we have an underlying physical network business that we have to go protect and we have to go build. >> John Furrier: your software company >> Rajiv Ramaswami: we're software company >> John Furrier: so you know like Cisco you (mumbles) switches and routers that's if you don't have one on the top of them >> Rajiv Ramaswami: yeah it doesn't matter what do you have underneath right everything runs on top and so that's the fundamental philosophy now when you look at how this is now starting to get deployed of course you know and you're seeing, we started out with the data center and we started you know focusing on virtual machines connecting virtual machines now we now extend that to connecting containers. Right, you can you need to network containers right applications running in containers they need to be networked you need to network base metal machines you still have some of those leftovers right, so you've got a network do's and then you have to network applications running well >> John Furrier: its not a software question, I want to ask this is the trend who was seeing hyper convergence is proven >> Rajiv Ramaswami: yeah >> John Furrier: glass multiple things into one thing and reduces one footprint and some easier to manage the 5G and these shifts and technologies cause some give people that operating reset they're our architecture a lot of people say okay Cisco's got gear, I got UCS and other thing >> Rajiv Ramaswami: sure >> John Furrier: so how it collapse that in well? they want me to not do that you guys are kind of a different approach or do you then Cisco? >> Rajiv Ramaswami: so this is exactly what we do right so now you take the networking that we've got with virtual floor networking and you actually integrate that as part of a solution with our VML foundation okay and now what, are you have a full solution that can be deployed on any hardware right, can be Cisco UCS hardware, can be del hardware or it can be HP hardware so you essentially have a software foundation that includes compute storage, networking automation all put together in a solution that you can deploy on Prem and you can deploy in the cloud >> John Furrier: that's like super hyper convergence >> Rajiv Ramaswami: yes and in fact hyper-converged now it's not just about storage and compute anymore right that's how it started out. Its our compute storage networking all put together available not just on Prem, in a hardware appliance software that can be run on anything and extended it into the cloud that's really the new hyper-converged >> John Furrier: and that's new chanak's is plan actually, they are moving from a hardware, trying to do software. >> Rajiv Ramaswami: yeah we've always been there right. We started out with software and we've expanded that to the hybrid cloud right. Think about where we're at now we've got you know we mark Loudon AWS, we've got our four thousand plus VM cloud provider partners and increasingly more and more users >> John Furrier: so, you are saying copied you guys basically >> Rajiv Ramaswami: absolutely >> John Furrier: okay >> Lisa Martin: imitation is the highest form of flattery (laughing) >> Lisa Martin: question for you in terms of customers. You know we we're I'm sure going to hear some phenomenal successful customers at vmworld, which is just around the corner, how our customer is going to benefit from the innovation? and this is we talked about the competition, competitive nature of radio, but also the fact that one of these guys and gals are doing this in their spare time so this is really deep-rooted passionate projects we expect customers in any industry to be able to benefit from this and say the next nine to twelve months? >> Rajiv Ramaswami: yeah look I mean at the end of the day you know these are complex systems and software that we have provide and deploy all right and a lot of innovations as under the covers and we have to translate that into value propositions that resonate with the customer that they can go deploy so what's the customer trying to do right? so think about it from a customer lens in so the customer is trying to say, well okay I'm on this journey I've got for example figure out how to have a completely you know dynamic infrastructure where I can run my applications and those could be if my existing applications modern applications that I'm building and they need to be able to run flexibly anywhere I want to be able to run them on Prem I want to be able to run them in the cloud give me an infrastructure that can solve that problem and that's really what we do with our hybrid cloud solution so the and so we have solved that problem for the customer then the customer's next problem is going to be around saying that well I want that flexibility I want to use AWS, I want to use Azure, I want to use Google and every one of these has a silo by itself I've got to retrain all my people to come manage every one of these separately VMware can you help us with that and we provided consistent operations and management's control planes that work across everyone of these clubs but allowing them to solve that problem easily and networking and security we already talked about right there's notion of being able to connect the absence users and data so converting all these innovations into you know solutions that customers can use is really what we do well >> John Furrier: you know we like to put pressure on you guys and ask the tough questions we've got to say you guys have done a great job, over the past couple of years on the product tech site a lot, a lot of clarity on vCloud air get that out of the way amazon relationship now that you got vCloud foundation, things are coming together the numbers are up >> Rajiv Ramaswami: yes >> John Furrier: Boss happy everyone's happy. What's next? What's the big next journey chapter and wave you ridin? >> Rajiv Ramaswami: look I think we're still early days when it comes to the two big transformational seems to be around right. cloud in containers I think we've got all of our solutions in the market now. We have to scale and build them past talked about this mission of how to you know make these cloud delivered service bigger chunk of our portfolio going forward and then containers in kubernetes I think is a big big cloud native with a big new area for us a lot more to go when it comes to networking in times transforming networking insecurity. I do expect us to be doing more and more there in that front and on the inducer I thin on there which we didn't cover much about here there's a fundamentally massive opportunity for us with modern management on Windows right with our partnership with Dell and taking really work space one into every windows machine that's out there and you also saw that partnership announcement with Microsoft last week at deltek world a couple of weeks ago so all of that I think you know There is a lot for us to execute >> John Furrier: I just want an alienware monitor the curve monitors are so good. I want one of those. >> Rajiv Ramaswami: Oh yeah those are beautiful monitors, elite. >> Lisa Martin: Well an impressive trajectory that you have no doubt the queue will be following closely, Rajiv thank you so much for joining me on the cube VMware radio 2019 we appreciate your time >> Rajiv Ramaswami: oh thank you Lisa, thank you John glad to be here again thank you >> Lisa Martin: our pleasure for John Fourier, I'm Lisa Martin coming to you from San Francisco at VMware radio 2019. Thanks for watching (high intensity music)

>> Live from Las Vegas, it's theCUBE! Covering Dell Technologies World 2019. Brought to you by Dell Technologies and its ecosystem partners. >> Hello everyone. Welcome back to theCUBE's live coverage here in Las Vegas for Dell Technologies World. I'm John Furrier with Dave Vellante. Dave, we've got Pat Gelsinger back on theCUBE. He stopped by yesterday, did a flyby after his keynote to kick off our intro section. He's back for the sit-down. >> (laughs) Welcome back. >> I can't get enough of you, Pat. >> CEO of VMware, Pat Gelsinger. >> Yeah, I love to photobomb you guys, so it was great. >> Anytime. I know you're super busy, business is going great. And you know, what a three years its been. I remember the keynote you gave at VMworld a few years ago. This was really on a time where, I would call it the seminal moment for you because you saw a vision, and we've talked privately and on theCUBE about, and you gave this speech of this is going to be the preferred future, and it was very visionary-oriented, but it ended up happening. That became the beginning of a run for VMware. And since then, you've been kind of chipping away and filling in all the tech pieces, the business model, and deals, with Amazon and now Azure and others. How are you feeling about it? What's the highlights? What's your perspective of where we are now? What's the notable accomplishments? >> Well you know, it's been just great. And you think about the run that we've been on where we, five years ago, we described a hybrid future. And you know, most people said, what are you, stupid? And you know, student body right to the public cloud. And now everybody is starting to understand the difficulty of replatforming, right? And says wow, this is really hard. I can spend millions and millions of dollars, in fact, one customer's estimate was that they were going to spend almost $1 billion replatforming all their applications to the cloud. And when they got them cloud-native, what do they have? The same apps. So imagine going to your board and saying I'm going to spend $1 billion just so I can be on the cloud, but give you no new business value. You've got to be kidding! And that's why this hybrid future, and as I like to joke, Andy, five years ago, Andy Jassy said if you're running your own data center, you're stupid. And Pat said if you're using Amazon, you're stupid. And now we're doing bro hugs on stage with each other. (laughter) >> And by the way, hybrid, you picked that trend that was right. Multi-cloud, though, came out of more a reality, less of an operating vision, 'cause hybrid cloud, you know, you saw the dots, connected those dots, but I think multi-cloud was much more of just a reality. When people started to realize that as I started doing stuff on premises, wow, I got native workloads on the cloud, and there are benefits for being in the cloud first for certain workloads. But then the multi-cloud thing comes up. >> And I think everybody has started to realize, and I really, as I would say, I think every CIO needs a three-cloud strategy. Making their private data centers into a proper operating private cloud. And some of this week's announcements, I'm sure we'll get back to those a little bit, to me are just a huge dimension. You know, VMware Cloud on Dell EMC, you know, a huge accelerant of making your private data center op like a private cloud, right, at scale. Second, you need a primary public cloud partner. And I think most people should pick a primary. Not one, a primary, and then a secondary cloud, right, you know, as their partners. And then you have your range of SAS offerings. And I think that needs to be the core, right, of every IT, CIO's strategy for the future. And our objective is to create an environment between what we're doing with VMware Cloud Foundation, and now VMware Cloud on Dimension. What we're doing with Amazon, our preferred partner for the public cloud offering. What we announced this week with Azure, right? Our 4000 other cloud partners, including, you know, very successful relationship with IBM. And saying, okay, that's your infrastructure. And the bulk of your workloads should run on a VMware environment that we can operate across that, with the same tools, the same interfaces, the same security, the same management tools, and then use the other cloud services as they bring you business value. You're a fan of Tensorflow? Go for it, baby. Right? You know, and use it in your app. You love function as a service with Lambda, go for it. But the bulk of your workload should lay in here and use these where they have business value. >> And to follow up on the three legs of the cloud stool, the CIO's legs, number three is for what? Is it for risk mitigation, exit strategies, or more specific best-of-breed, horses-for-courses type of workloads. >> Yes, yes, and yes. To some degree, really it's saying, nobody wants to say, I'm only in one. Right? Nobody wants to lock in for it. Also you know, clearly, hey, you know, these are technologies that break. You get more resilience that way, right? You want to be able to manage your cost environments. There's clearly this view of okay, you know, if I can do one, two, and three, I can do N. 'Cause most people are also going to end up picking, oh, I'm in Hong Kong. Okay, I need a Hong Kong cloud, because my data can only go there. You know, I'm in Malaysia, oh, they require all data to be there. 'Cause a practicality, if you're a big enterprise company, it's not just going to be three. You're going to need to be four, five, and six as well, for regional. And then you're going to acquire somebody, they're using a different partner. It really says, build an operational environment that works that way. Give myself business flexibility. I have application flexibility, and if I've done that, I really can move to the other environments that my business requires. >> I think one of the reasons why you guys have been so successful, if I go back five or six years, I remember you laying out the market, the market segmentation, you're obviously close to customers. You're a very clear thinker. You've obviously looked at the market for multi-cloud. How do you describe that, how do you look at the TAM, how big is it? >> Well you know, if you think about cloud today, right, we're closing in on $100 billion of the public cloud. You add SAS to it, you know, you got almost another $100 billion at that level. And you know, the overall data center market is probably on the order of, you know, $1 trillion-ish. >> Give or take. (laughs) >> Yeah, on that order. And then you know, you throw the operations costs inside of it, you're probably looking at something that's, you know, on the order of $2 trillion as well. So this is a big market, right? You know, part of the excitement that people are seeing in this cloud environment, is that they can just go faster. And as I described in the keynote today, we want to enable every one of our customers to stop looking down and look up, right? Spend less time looking down at the infrastructure. We're going to operationalize it, we're going to automate it for you, we're going to take care of it so that every one of your engineers can become software engineers building app and business value. >> I want to ask you on that point, because one of the things, I was talkin' last night, the analyst said at the briefing or the reception was, having a debate with one of the strategists in Dell, and I'm like, look it, outcomes are great at the top of the stack. Looking up, you want outcomes. But during the OSI stack days, no one cared about outcomes. It was either token ring or Ethernet. Speed won, so certain things have to be speed-driven, world-class, and keep getting better. And so that's what we're seeing as an infrastructure requirement. Horizontal scalability, operational scale. So that's a speeds and feeds game. So the outcome there is faster (laughs), and simpler. Up the stack, data becomes a big part of that. That, more, is where we see outcome. Do you see it that way, Pat? Because you know, again, infrastructure is often, that's how they said it on stage. We want to have whole new-paved, new infrastructure for this generation, essentially a refresh of infrastructure. Okay. Well, what does it look like? It's got to be fast, got to be flexible, software-defined. Your thoughts? >> So you know, clearly, I mean, what we're trying to do is we build this common infrastructure layer. And build an environment that allows you to be fast, but also allows you to be in control and cost-effective. Because if you would say, oh, I just want to be fast, ah, that doesn't work, right? We still have limited budgets, and you know, people, someday there's a CFO day of reckoning. But you also have to realize, part of the hybrid cloud laws that I described this morning, you know, one of those is the laws of physics, right? Hey, my factory automation for robotics needs to be 40 milliseconds, period. And if I round-trip to the cloud at 150 milliseconds, guess what? (laughs) >> Latency. >> Right. You know, my image recognition for being able to detect my autonomous vehicle is less than 50 milliseconds. I can't round-trip to the cloud. It has to be fast, right, but we also need to be able to push more of this data, more of the inference of my machine learning and AI closer to the edge. That's why, you know, you heard Michael talk about, and Jeff talk about this explosion of data. Most of that data will be at the edge. Why? Because every camera, you know, every sensor will be developing it, and I'm not going to round-trip it to the cloud because of economics. I can't afford to take all that data to the cloud. It's not just the latency. >> Latency matters. >> Yeah. And so for that, so I can't take it to the cloud, I got to be able to compute locally. I got to be able to apply the inference of my AI models locally, but you know, I also then need to scale aspects of cloud as well. My third law, of course, was regulation, where you know, guess what? I was just with a major customer in Latin America, and they said they are repatriating 100% of their data and applications out of the public cloud, 'cause the new president, right, is assisting on data only in his country for all of their nationalized resources and assets. >> So that's driving the change. This brings up the multi-cloud kind of thing earlier. You guys got to play in all the ponds out there, in the industry. But let's talk about on-stage here at Dell Technologies World. You were on-stage with Michael Dell and Satya Nadella, and I was lookin' up there. I'm like, man, the generational knowledge of the three people on-stage, the history. >> (laughs) I think that just means I'm getting old. (laughs) >> Well I mean, you've seen it all. I mean, from Intel, to EMC, to VMware. Dave and I, Dave's a historian of tech, as he'll self-claims, but I'm up there, I was pretty blown away. You guys are leading the industry. What kind of moment was that for you, because now you've got Microsoft doing a deal with VMware. Who would've thought that would happen? >> Well, maybe two different aspects to it. You know, one is, I've known Satya for over 25 years. You know, he was sort of going through the Microsoft ranks, Windows NT, SQL, et cetera. (laughter) You know, at the same time I was. So we got to know each other. Almost 25 years since our first interactions. When Michael Dell first came to Intel to meet Andy Grove to get microprocessors so he could start his business, I was there. So I mean, these relationships are decades old. So in that view, it's sort of like, hey Satya, how's the wife, you know. (laughter) Hey Michael, how's Susan doing? Really, it-- >> But you haven't even gone anywhere, you're still in the industry. (laughs) >> Yeah. But then to be able, the announcement was really pretty special in the sense that I call it 20 years in the making. You know, not a year or two, 20 years in the making, 'cause VMware and Microsoft has essentially been at odds with each other for two decades. You know, at that level. And to be able to be on-stage and saying, that's right, we're cooperating on cloud, we're cooperating on client, and we're cooperating on futures, okay, that's a pretty big statement as well. And I think customers respond very positively to that. And you know, I'm-- >> It's been a bold move, and you also made a bold move with the cloud, too, Pat. I got to say, that was another good call. Partnering with Andy Jassy. Again, once, both idiots, I guess, calling each other clever, you know. (laughs) Hey, public cloud, at odds, partner. Boom. >> And I really think this idea, moving headwinds to tailwinds. And you know, the Amazon partnership with Andy, and as we say, it's our preferred cloud partner, VMware Cloud, our native US hub, VMware-offered service. You know, super committed to it. We're closing in on 2000 customers on that now. >> Clarify the Amazon relation. I saw some press articles that kind of missed, skewed a little bit. They kind of made it sound like the Azure deal was similar to the Amazon deal. So just explain the difference between the VMware deal with AWS and Andy Jassy, that relationship, and the other cloud ones. Take a minute to explain that. >> Yeah, thank you. And what we're doing with Amazon is VMware is offering a cloud service that I operate for customers, that runs on Amazon. And that is a VMware-delivered service. They're our preferred partner. We're not bashful about that, that if we have the choice, that's the one to go to. It's going to be best. But what we've done now with Azure is we've made the VMware Cloud Foundation, the same underlying components, available with CloudSimple and Virtustream, they're partners, to have a VMware Cloud Foundation offering delivered by Microsoft as a first-party service. So VMware Cloud, VMware is delivering it. In the Azure for VMware services, that's being delivered and supported by Microsoft. >> And that's the same deal you did with IBM. >> It's very, the same-- >> Google and other ones. >> Yeah, the same as we've done with our 4000 other cloud partners, right? And obviously, Virtustream and CloudSimple are part of that 4000, and they're making the VMware Cloud Foundation available to Azure customers now. >> And what's the benefits to VMware's customers for those deals? >> Well, imagine that you're somebody in, Walmart was quoted in the press release, as an example. Walmart's a big VMware customer. Walmart is also a big Azure customer. So their ability to say, oh, I can have a hybrid environment makes a lot of sense for that kind of customer. So we really do see it as saying, you know-- >> Customer-driven, basically. >> Absolutely. And people said, which are you going to sell to us? Well in most cases, customers have already decided who their major cloud partners our. We're saying that VMware offering, even though we're first and best with Amazon, we're saying as they make their cloud choices, we'll have a valid VMware Cloud Foundation offering available. >> And best, I want to understand best. Best is, in part, anyway, because of the engineering you guys have done. When we interviewed Andy Jassy in November at re:Invent, he said you can't have a lot of these types of partnerships. And it's very deep integration. Is that why it's best? And what makes it best? >> Yeah, I call it first and best for two reasons. One is because we are engineering, we are co-engineering, the bits first get done on VMware Cloud, and then we make 'em available to the other partners. That's where we're doing the core engineering, the innovation. Andy has hundreds of engineers working on this. I have hundreds of engineers working on it. So it's first and best from an engineering sense. And, given it's my service and my offering, we're selling it aggressively in the marketplace, positioning it as part of the broader set of solutions and leveraging that, like you saw this week with the Dell EMC offering, VMware Cloud on Dell EMC. It's leveraging all that first and best work to now bring it on-premise as well. So it really is both the engineering as as a go-to-market. >> I'm going to ask some CEO questions. (laughs) So Tom Sweet has said they're happy to have the Class V transaction behind them. I'm sure you're glad, too. Thank you. That was very generous of you. >> (laughs) >> You've been incredibly good at acquisitions. I mean, obviously Nicira, Heptio, CloudHealth, AirWatch, I mean, on and on. >> VeloCloud. >> VeloCloud. I mean, most acquisitions, frankly, don't live up to their objectives. I think that's not the case for VMware. So now you're, good news is you draw off a lot of cash, so you're building up that pot again. How do you see, going forward, use of that cash? R and D, M and A, maybe you could make some comments there to the extent you can? >> Yeah, and you know, we said the primary ways we use cash, stock buybacks and M and A. And that continues. We did the special one-time dividend, which helped Dell go public. Everybody's happy. The market's responded super positively on both the Dell side. They're up, what, 40% since they go public. VMware up almost 50% this year. Just tremendous. >> Tremendous, $80 billion value now, awesome. >> Yeah, just tremendous. And, right then, we said going forward, it's business as usual for us. We're going to continue to do stock buybacks. We're going to continue to do M and A's. As you've said, we're good at this acquisitions stuff. And part of that is, I call it, imagine you're a hot startup company. And you say, do I want to be part of VMware? And we try to answer these questions. Do we have vision alignment? >> (laughs) >> Second is, can we accelerate your vision? Because most startups, you know, I mean, you talk about unicorns and so on like that. But what really motivates them is their vision. And if they believe their vision is going to be accelerated as part of VMware, so they're on this and we're going to turn 'em to that, aw man, they get excited. Do we have a cultural fit? I mean, with every CEO of our acquisitions, and HR does, we really, are they going to fit our team? Because you know, cultural issues, you can't butt your heads day and night. Life's too short. >> Certainly VMware, you guys are (laughs) that culture's very hardcore. Work hard, play hard. (laughter) >> Yeah, and you know, it has to be this deep drive for technical innovation, right? The technical due diligence that we do with our startups. Right? It's sort of like, you know, this is like a PhD exam for these, I mean, they really got to know their stuff. >> Yeah, so people don't fit in the culture at VMware, and there-- >> And we've said no to a number of potential acquisitions over cultural issues as well, if they're just not going to fit. And hey, we're not going to be perfect, but the fact that we can bring these companies in, accelerate their vision, give 'em a culture that they're excited about. You know, we have maybe 90-ish% success rate. The industry average is below 50% >> Yeah, fantastic track record. I mean-- >> And that just gives us the ability to do organic and inorganic innovation, which to me is like, a potent recipe. >> And you got the radio conference coming up. What will your talk, theCUBE will be there. Pat, you've created great shareholder value. You turned those headwinds into tailwinds, and we were watchin' the whole time. It's been great to watch. And what's next? You have your VMware tattoo still on from VMworld? (laughter) Like you have a jail tattoo? >> No, I'll tell you >> Cute tattoo. >> a little inside, I'll tell you a little inside story. My wife, you know, after the VMworld keynote with the tattoo on, we were leavin' on vacation two weeks later. And all she said to me after the keynote was what's that tattoo thing, it better be gone by the time we leave for vacation. (laughter) It's like, there was no, honey, that was a great keynote today, it's like, that better be gone! (laughs) >> Nothin's better than watchin' that video and that CUBE sticker we had on your hand. Pat, great to see you, as always. Great commentary, great analysis. Congratulations on all the success with VMware. Again, the transformation's just getting started. We're seeing a lot more good things for you guys as well. >> Yeah, and you know, this has been a great week in some ways. I sort of joked this morning on-stage that, it almost felt like VMworld. We talked about VMware technologies and that Dell partnership accelerating so well. >> It's not AMCWorld, it's DellWorld now, it's a whole new vibe. >> (laughs) And you know, with that, you know, I just really believe in the superpowers that I talk about, we're just getting started. So we're going to be doing this a long time together. >> What's on your plate in front of you now? You got VMworld coming up in a few months. Priorities, objectives, what's on your plate? >> Well, I have to leave some of the secrets for what we're cookin' up for VMworld this year. But some of these steps clearly, in the developer container space, super important for us to really make some progress there. Obviously, we'll have some incremental cloud announcements as well. >> ContainerWare rhymes with VMware. (laughs) >> Yes, that's very good! We have an advertisement on that coming out, so a new ad. But it really is, I think, that topic area's one that, how can we really solve that for customers that really can deploy at scale containerized environments for an enterprise workload. So, excited about that area. And you know, maybe just a few deliverables from what we announced this week. >> Alright, take your CEO of VMware hat off, put your CUBE analyst hat on. What's the most important story here at Dell Technologies World, if you were a commentator? You can't say VMware 'cause that's biased, but you got to be objective. You can say VMware if an objective. What's the most important storyline here as a backdrop for Dell Technology Worlds, what's the real net net to customers? >> Well you know, I think, and I'll say, as exciting as the Microsoft announcements were, I think the most important thing was VMware Cloud on Dell EMC, on-prem. Because to me, you know, the fact, I go to CIOs, and I've done this probably five times since the keynote finished on Monday. And I say, how many of you have fully updated your hardware, your firmware, your operating systems, your networking stack, your compute stack, your management on the latest releases, all of them patched, upgraded appropriately for your environment? >> And they say, their eyes roll. (laughs) >> And the answer is none. Not some, none. I have customers that are askin' me to extend support for vSphere 4.5. It's like, what, that's been EOL'ed for a year and a half, what are you talking about, right?! But the reality is that most people go to the cloud, public cloud, not because it's more cost-effective or because it's better, it's because it's easier. So what we've really said is we can make easy in the private cloud and truly deliver that hybrid cloud experience. And I think the customers really experience the TCO benefits, the acceleration, the reductions in their operational environments, the personnel associated with it, the security benefits of being always patched, upgraded the most release. You know, now you're talkin' about attacking that other $1 trillion of operational costs that they're bearing in the personnel and so on. To me, that is like, so powerful if we really get that engine going. >> And the simplicity that comes out of that, is just-- >> You know, and again, the demo that we showed. That was the VMware Cloud on AWS being able to demonstrate, now, a complete picture into the on-premise environment. That's powerful. >> Pat Gelsinger, CEO of VMware. I know he's got to go. Thanks for your generous time, I know you're really busy. Again, Pat Gelsinger. >> Love you guys, thank you. >> Thanks, Pat. >> Love you too. Pat Gelsinger, CEO of VMware, creating a lot of shareholder values, got a lot of tailwinds at their back. VMworld's coming up, theCUBE, of course, will be there with two sets. As usual, theCUBE cannons, two sets here, firing cannonballs of content here at Dell Technology World. I'm Jeff Furrier with Dave Vellante, stay with us for more after this short break. (electronic music)

>> Live, from Las Vegas, it's theCube! Covering AWS re:Invent 2018. Brought to you by Amazon Web Services, Intel, And their ecosystem partners. >> Hey, welcome back everyone, live here, in Las Vegas, Amazon Web Services AWS re:Invent 2018. 52,000 people here. Two days. Second day of three days of wall to wall coverage here at theCUBE. I'm John, with Dave Vellante. Dave, six years, we've been doing theCUBE. We've been to all re:Invents except for the first year. We've been a customer, we've been following these guys. >> Plus the summits! >> Plus the summits. Great ecosystem. And VMware and VMworld, similar dynamic. I want to talk about that now, obviously the new announcement, on-premise, is huge. Want to dig in to it with our guest, Sanjay Poonen, who's the Chief Operating Officer of VMware. Sanjay, great to see you. Cube alumni, many times, thanks for coming back again. >> John and Dave, pleasure to be on your show. >> Thanks for coming on, great to see you. >> Congratulations on all this success, you've got a wonderful booth and presence here, and I think this is becoming like the Mecca of all IT events. >> You know, we have our new video cloud service on AWS, we're ingesting over 110 videos, we'll have 500 short video clips behind it. Tons of blog posts, tons of coverage. There's an insatiable appetite for Amazon Web Services content as Andy pointed out in my interview with him. And it's just the beginning. You guys at VMware really, I mean, talk about a seminal moment in the history of the computer industry, and VMware was, when you guys recognized the sea change of operators on IT and cloud developers coming together, you guys were very proactive two years ago. Raghu, yourself, and the team, Pat. We're going to, hey you know what? Let's just align. Culture's a fit with Amazon. Let's co-develop. Let's ride the wave together, and let's see where the chips fall. Which is basically, I'm oversimplifying, but that's kind of what's happened. So much has happened. I saw Raghu last night at the Greylock partner event. This is a historic moment. Good outcome so far, deep partnership, meaningful partnership. A lot of resonance in the marketplace, you guys are iterating and raising the bar. That's Amazon talk for success. How do you feel? >> Yeah, no, I think it's, absolutely, John. We, if you think about how this has evolved, you know five years ago when I joined VMware, I felt like cloud and containers, the two C's, were our big headwinds. We've turned those headwinds now into tailwinds, but it took some catharsis from us. We had vCloud Air, our own public cloud. We had to divest that. And I think the Amazon VMware coming together, when we announced it two and a half years ago, was like a Berlin Wall moment, where you had the US and the Soviet Union getting together. That was good for world peace. People were surprised, because these are two purported enemies now, and it really built trust. And step by step, launching VMware on AWS, announcing RDS on VMware, the beginning of on-premise, and then today, announcing Outposts, it's just an example of not just the validity of VMware as a hybrid cloud leader, but the strength of this partnership. We have a very special relationship with Andy, Pat, myself, Raghu, spent a lot of time together. Often, you can't tell, when our engineering teams meet, when an Amazon engineer and a VMware apart from each other. They're like finishing each other's sentences. That, we don't do, like, Mickey Mouse, Barney, you know press releases. It's real stuff. >> And the culture of, the engineering culture of VMware, which has been a core, cultural thing, the DNA of VMware is technical. Very community oriented. Amazon, technical, very operationally efficient, good community. This is good fit there. I got to get your perspective, though, on how that is going to evolve, specifically around on-premise. Because certainly Andy Jassy validates on-premises with the announcement that VMworld, which you guys covered, Pat Gelsinger uses words like dial tone, Kubernetes, you mentioned containers. Andy, when I asked him, "Andy, you know you told me "in theCUBE, five years ago, "that everything's going to the public cloud. "Change of tune? "You mind if I pin you down?" "No, John, you can pin me down all you want." He says good leaders are self-aware. He said "Our customers wanted this." And he's cool to it. And the partnership with VMware highlights that this is not going to happen overnight, he recognizes the duration, the role of on-premise. And then he also says that the data center's like a big Edge. So, if everything's cloud, what you guys basically announced with Outpost is, cloud, public cloud everywhere. So, just, there's no public, private, it's just cloud. This is a game changer, because-- >> Absolutely. >> Just, why wouldn't I want to buy this product? >> I mean, first off, congratulations on scoring that interview. Not many people have access to Andy that way, and you guys have built a very good relationship. I thought that interview you did with him was phenomenal. There was a special point in that, John, where you tried to get him to talk about Outposts, this was before he announced it, which is will Amazon go on-premise. So a couple of months ago, when Andy called us, and Matt Garman, to talk about this project under NDA, it was a continuation of those RDS type discussions where we basically said, if you want to do anything on-premise, you should do it with VMware, because you're going to have to go through this door called VMware. We are the de facto king of the on-premise private cloud world. Many of these customers are used to our tooling, vSphere, vMotion. They want anything to run on VMware. So from that became a sequence of discussions that really really evolved very quickly, and well, so we can announce this together. I mean, you know, Andy had three guests on stage, and only one partner, and that was VMware. And that's an indication of the strength of this partnership. Vice versa, of the 50,000 people here, probably all of them have VMware on-premise. So if Amazon's going to do more on premise, why not do it with the leader in that area, VMware. And we want to be in the software industry. The de facto standard for software-defined infrastructure. Right? And that's a special space that we can fill. >> Well, the amazing thing to me, is, here's VMware, no public cloud, Amazon wouldn't even say the word hybrid, or private cloud, doesn't use private cloud, but it wouldn't say hybrid before. You've now emerged as the tandem, de facto leader in hybrid cloud. Overnight. With an ecosystem that all wants to connect and partner with VMware and all wants to partner with AWS. Overnight. I mean, it feels that way anyway, 24 months. >> I think that's absolutely right. I mean, we were the first to start using the term hybrid, three or four years ago. As we did, then it took a while, because I think a lot of customers, and some of the public cloud vendors, felt it was going to be binary, all public cloud and no private cloud, but they began to realize you need both. But your point on the ecosystem, also surrounding, I just came back from meeting one of the top SIs in the world. They're betting big with us because they see this as the place for both of them, and they're also betting big with AWS. The System Integrators are all over this. The security vendors, all over this. Palo Alto Networks, Splunk, want to see. Often, many of these companies come to us and say, "You have cracked something special "in your relationship with Amazon. "How did you do that and how can we follow that model?" We're happy to share our playbook of how we think about ecosystems. So, we want to create a platform, just like Amazon's a platform, where everybody, SIs, tech vendors, software vendors, can all plug in to. >> And the other observation I make is, you know, previously the distance between infrastructure players and the guys who really are driving application value, the application developers, was quite a distance. And now it's closing, with infrastructure as code. And it's just so transformative for organizations. >> I think, and one of the things that's making that is microservices and containers. And as you know, since we last talked, we acquired Heptio. If you think about Heptio, they are the founders of Kubernetes, okay? They left Google, started their own company, Craig and Joe, and we're excited about that. That platform will augment PKS, which was our big bet in containers, and become something that could run on-premise, or in a public cloud environment like this. We acquired CloudHealth. CloudHealth is a multi-cloud management tool for costing resource management. That becomes something that could send, a lot of Amazon reps actually refer CloudHealth as the preferred way to get your insights. So we're beginning to see this now a lot more clearly than we did two years ago, thanks to this partnership. >> So, Sanjay, I know that Outposts, super exciting, it's been covered on Silicon Angle, there's a zillion stories on our site on this whole event. But, it's not going to be shipping for about a year. But you guys already have some working products now. What's the current track to that shipping because when that comes out, that'll be a game changer. Why would anyone want to buy hardware again? Michael Dell wins either way because he's got VMware. But others who sell hardware, this is a real, it could be a killer blow. But, I don't want to (laughs), you can comment on that if you want, but what's in-between that one year, you've got a product now, how do customers move along? >> Yeah, I think there's some very tangible things that, first off, VMware Cloud on AWS is, as you've described Dave, the best hybrid cloud option. You get the best of the on-premise world and the public cloud. You know, we announced hundreds of customers, we have a goal to get to thousands of customers, and then tens of thousands of customers. We're going to continue down that march. I want to have a significant number, over 500,000 customers. If Amazon has 40, 50 percent market share, based on some of the numbers that Andy shared today, a significant number of our customers have Amazon, we should get them onto VMC. VMware Cloud and AWS. Secondly, we do have, we announced Project Dimension, some Edge computing capabilities running on existing hardware players, so we are beginning this journey ourselves, in terms of cloud managed on-premise environment. Right? Project Dimension was announced before this, and that will run on Dell and Lenovo hardware, and that's well and good to go. They will have Edge IOT use cases. And then when Amazon comes and gets us ready, we would have learned a lot about this market. Which is really kind of this Edge computing market, cloud-managed. So we're not going to be, we're going to plan and do the other pieces. Much of the software components that VMware is building is not completely from scratch code. We're taking NSX. One of the most important components that VMware is adding to Outposts is NSX. We're not rewriting NSX, we're taking the NSX and applying this now, to a use case that's very much like that because we've adapted NSX now to be container-friendly, cloud-friendly. We've added NSX into the branch, VeloCloud. So those are the things that we're, you know, there's no rest for the weary anymore. >> And that gives you a consistent networking model, which is not trivial, as we've talked about. >> One of the things that I'm excited by, intrigued by, is, I know it's nuanced, but I see it as a key point, containers sometimes don't meet the security boundary issue. So, you guys can run a VM around a container, and run it under the covers. With Lambda. At super lightning speeds. It's not like a ten second instance to stand up. So that means there's more opportunities to create more abstractions around Kubernetes. And maintain security. There's so many benefits from this integrated kind of concept of consistency of operations for the software developer. >> John, you're absolutely right. Part of what we're trying to do is that word you talked about. Consistent infrastructure and operations. Consistent infrastructure and operations. And the container, if you've been seeing some of the ads in the San Francisco airport, we have some in London, and a few of the airports in New York, you'll see an ad that says "Containerware." It's playing on the word "ware", VMware. We want to be everyWARE, W-A-R-E. And if you think about the container being as pervasive as the vm in the future, I'm not going to say we're going to change the name of the company to be Containerware, but we want to be as pervasive as vm has been in VMware. So we have tens of millions of vms, in the twenty years we've had, maybe there'll be ten times as many containers. We want to become that de facto platform and containerware starts to take over. Right? What is that? Kubernetes-based. And we'll partner with the best. We've partnered with Google, we've partnered with Pivotal. Some of it would land on AWS, some of it will land on Azure. And you get a lot of the flexibility you have with that microservices platform. >> So, since you guys are on more of the software side, obviously Amazon's got software, but you guys actually are going to be much more broader, multiple clouds, as Amazon moves up the stack, I would imagine that as customers, I'm not going to buy in to only one cloud, there's other clouds out there, you guys should become a real strategic, traversal between clouds. So, we were debating, will customers have certain instances in, say, different clouds for specific, unique things, but yet run still horizontally, scalable on-premises, with VMware across multiple clouds. >> I think, you know John, it's going to be a lot like the hardware market was 20 years ago. It started to evolve into two or three major players. What's today Dell, HPE, Lenovo, at the time it was IBM, they divested to Lenovo, Cisco. In the storage place, two or three. I think the public cloud is not going to be three, five, ten. It's going to be two or three. Maybe four. And then maybe, in like China, Alibaba. So already, we have certain tools. Like CloudHealth's proposition is to manage costs and resources across multiple clouds. So we began to be already thinking about what is a multi-cloud world do? That said, in areas like this, which is a data center offer, we felt it was good for us to focus and get VMware Cloud and AWS to be the best hybrid cloud option. Give that a couple years, rather than trying to do everything and do it poorly, when you peanut butter your approach and try to do a lot of things with various different, so this is why we put a lot of special attention on VMware Cloud and AWS. We have an offering with IBM. We announced something with Alibaba. In due course VMware will need to have multiple cloud offerings. But I feel like this partnership and the specialness of this has really benefited both sides. >> Well, it's going to be very interesting, because IBM just made a 34 billion dollar validation of multi-cloud, so, and we talk about competition all the time. And it's evolving. >> We have a very good relationship with IBM. And listen, you have to be reasonably nuanced in your partnerships. So we're going to partner very heavily with IBM Global Services. We're going to partner very well with IBM Cloud. We're going to compete really hard with Red Hat! That's okay! Well, we'll compliment Linux. The bulk of their revenue's Linux. >> Of course, yeah. >> But make no mistake, we're going to compete hard with OpenShift. That's okay! That doesn't mean our IBM relationship is competitive. There's one piece of that, a very small part of the Red Hat revenue, OpenShift, that we overlap. The rest of it is complementary. We can be nuanced. It's sort of like walking and chewing gum. We can do both. And that's how we play. >> Before you wrap, now you know what we think of you, we think very highly of you, you're a superstar in our minds. However, you got to interview Sushmita, in India-- >> You know who Sushmita is? >> a true Bollywood superstar. Yes, an amazing actress, beautiful, talented. That must have been quite an experience. >> Well I got to tell ya, I was very intimidated. I opened-- >> I'll bet. >> Cause somehow I get assigned all these interviews to do. Malala, I'm usually on the opposite end. Your end. Malala, and Condoleezza Rice, and I told her I was really intimidated by her, and she said "Why?" I said, it's the first time that, I'm usually not tongue tied, but I did not know how to explain to my wife that I was going to be interviewing Ms. Universe. Okay, and she's like "What do you guys do at VMware? What the heck does Sushmita Sen have to do" But it was a good interview, I mean listen, for the India audience, we were celebrating our 20 year anniversary. She is an amazing woman who has achieved something that very few Indians have. And we wanted our Indian audience there to see that women can be successful. She's a big supporter of more women in business, fairness, equality, no prejudice, equal pay, all those things that we stand for. Which is part of our values. And if it weren't for the India audience she probably, I don't know if she would have worked at a Vmworld. We had Malala there, we had Condoleezza Rice at our last sales kickoff. We do these because we want to both teach our employees something, but also inspire them. And sometimes these speakers help with that cause. >> Sanjay, great to see you, thanks for coming on. I know you got to catch a flight. Big day today for you guys at VMware, congratulations. >> Thank you very much for having me. >> Thanks for all your support, great to see you. Great commentary, great insight. Sanjay Poonen, COO at VMware breaking down the announcement of Outposts, its relevance and impact on the market, and more importantly, the VMware AWS relationship. This is theCUBE bringing you all the action, day two of three days of wall-to-wall coverage. Two sets, hundreds of video assets coming, tons of posts on siliconangle.com, where all the coverage is. We'll be right back with more after this short break. (techno music)