>> Narrator: Live from Las Vegas, it's the Cube covering VMworld 2017. Brought to you by VMware and it's ecosystem partners. >> Hey. Welcome back everyone. Live here in Las Vegas, this is the Cube's exclusive coverage of VMworld 2017. Now I'm John Furrier, the co-host of the Cube with my partner Dave Vellante co-host. Eighth year of Cube coverage at VMworld's since 2010, we've been documenting the evolution of VMware. Next guest is Bask Iyer, who's the CIO of Vmware and Dell. Big time CIO, been in the field. Been in working, real practitioner. Now at the company. Going to the cloud. Hybrid cloud. Bask great to see you. >> Good to see you. Yeah. >> So, Pat Kelson's keynote really relevant. I just want to say, you know our conversation last year and even the year before, you're like Nostradamus. You're like predicting the future. We talk about IoT's and now IoT edge. Are you helping messaging it with Vmware, I mean? >> Well my background having working in Honeywell and so on is that and I saw IoT as a big opportunity. So, it was easy for me to see that it was going to be big but I didn't see, think it was this big. But I'm messaging more with CIOs, more than Vmware to say you're going to miss this wave. It looks like a lot of CIOs are so focused on business IT, they're missing IoT. So, my message is here's a great opportunity for you to get ahead of don't miss it. >> I want to talk about waves cause last year we really made and then you look at what Pat Kelson did last year. We were commenting that he gave the speech of his life. Was that two years ago I can't remember. He really was like under a lot of pressure. His toggle was like a 42, very low. Is he the right guy? He made some bets. Pat's a wave guy. He's all about the waves cause he said, "If you're not out for that next wave, you become drift wood." So, I got to ask you the question. By the way, he's got the great wave slide here. From a customer perspective, they're watching here, Gelsinger lay out a great vision, the stock price is booming, strategy is clear. Andy Jassy from Amazon comes on stage. There is clarity in this direction and the waves that you are on. Now customers have to make the choice of bets, they're looking at the waves and saying what are my bets; The question I have for you what bets are customers making now as CIO and what should they look at, in what sequence, how do they attack those bets and which are the right bets? >> So I think the cloud is a big bet. People don't want to talk about cloud because they think we have been talking about it for a long time but enterprise hasn't really gone much in the journey. There is still a lot of data centers running virtual machines which is great but you really don't have a private cloud set up and then this burst capacity do go to public cloud and so very few people have examples of that. There are some people but not the large majority. What happens in IT is, when you get spooked when you see a public cloud and a private cloud and your not sure which way it's going. So the nice thing about this announcement is that thing's mystery is out right. So you want to go to public cloud here's the way to get it. You want to stay in your private cloud here's the way you can stay in your private cloud. Plus moving legacy applications people never talk about legacy. They always talk about you know if you and I are building a new company to go to a public cloud, do cloud ready, pretty easy. But I have some old applications even in a technology company, how do I move it? So I think that as a customer when I look at past message they said that make sense to me, I can choose to run it on my data center, go to a private cloud and go into Amazon. >> I got to ask you, I know Dave was jumping he's got some good private cloud data to talk about. About a true private cloud data. You mentioned how hard it is to move legacy apps, can you give some illustration and some color to how hard it is. Because a lot of people in the press analyst even startups, It's so easy, I want to just win the enterprise. If it's a clean sheet of paper I get that but there is a lot of important things. How hard is it to really deal with this legacy data center environment in the path to hybrid and public cloud? >> Well there is still, you know people think of, if you think of an ERP, people have four or five ERPs still. You know you were just imagining everybody is just on one nice SAP or one nice Oracle. There are several instances and the reason we haven' migrating to one is not because is not because we don't know how to do it, there is an ROI you know, do I invest the money, do I do this right now, do I get the people, another $400 million to invest in an ERP system. >> Risky. >> Very risky. So you got a lot of these. You've got PeopleSoft which has different versions. You got HR systems, sale systems. So that's what in a lot of data centers believe it or not. How do you move it? Then when you go to a public cloud the guy says are you cloud ready? No you're not. You got a legacy system. >> What's that? >> You just don't want to run this. You want to run it in the most efficient way within a container. So I think people don't see that. The other thing they don't see is at scale it is expensive sometimes to go to public cloud. If you and I are starting a company, we won't build a data center we can probably go to the public cloud. But if I have scale, I already have data centers that I am running at scale and not everything is unpredictable. A lot of business IT is very predictable workloads, right. I know what I need to buy next year generally. So what burst capacity am I looking for? Not everybody requires that, so that's another reason. Security both ways right, people say that public cloud is more secure but there is a lot of regulatory bodies who want you to show and there is a lot of work that I have to certify to show that. So what [CIS 00:05:30] is trying to do is to say we will try to go cloud where we can but there is still 80% 90% of your stuff running in a data center. Help me bridge that. >> Well we talk about cloud, private cloud, we coin this term true private cloud and the basic concept is bring the cloud model to your data. >> Right. >> We tell our CIOs, look don't try to form your business and fit it into the cloud. Fit the cloud into your business wherever the data lives. >> Yeah. >> Is that a reasonable way to look at it and is that what you're doing with your business? >> Yeah, so I'd define it a even more simply. I'd kind of say if you have a lot of people running your data center, you don't have a cloud. I mean the whole point of cloud is automation. The reason public clouds are cheaper or better is because it is highly automated. So that's the trick. If you have people in the data center then it's not a cloud. So get your data center modernized. I define it as private cloud you can call it whatever you want, you can call it automation. But get it automated. Then the scale comes up and your cost comes down. But then when you want burst capacity you don't have to build servers for that you can go to the public cloud for burst capacity. But the big point for me is, people ought to sit down and figure out a strategy. Few years ago people said don't go into infrastructure just outsource it. So we all outsource it and that became a mess. Sooner or later you got to figure out what you need to do. You can't just outsource it, put it in the cloud, not think about it, make it go away. So you see a lot of CIOs coming back and saying I want that but I also want to fix this, how do I automate? I want to get the cost down. That's how I define a private cloud don't have too much cost. >> So are you running a private cloud or? >> Not only am I, I should be modest but I'm not going to be. I think we run one of the best private clouds there is for VMware. Everything that you see in Vmware, the hands on labs you see there is all running on a private cloud at scale. We are extending the cloud to now Dell Technologies. We are taking the same model and cut and paste it. Imagine how much leverage you get from EMC and Dell Data Centers when you extend the private cloud. So for a company like us it's a sure bet. >> So what is it look like underneath? I mean you got vSan running. >> Yeah. You have vSan, NSX everything we talk about. >> Have you thrown out all your arrays? >> No, you don't throw out all our arrays but vSan is. What you see in the market is happening in my data center. So vSan is, there is more and more vSan nodes now but your mission critical SAP and Oracle stuff that I don't want to necessarily save dollars I would want something that is mission critical, proven, ready, certified, etc. So the other things don't go away but your storage is growing. As the storage grows you see a lot more of the vSan growing with that. I use to have a lot of vSan, a lot of NSX. >> You know how many clusters you have now? Probably a zillion. I mean a pretty large number. >> It's a large number of clusters. >> It's just a, the reason I don't know is every month they just amazingly growing. Last year when we talked about it when you asked the question about vSan there was only a few left in my data center. So I deliberately dint talk a whole lot about it. Now it's taking on like fire. >> Yeah >> Right, as the reliability increases, the cost value proposition is taking off. >> Your talking about tens of thousands of vms and petabytes of data. >> Yeah, multiple petabytes of data. Over 60% of that is growing. The growth mark is really large in the vSan as well. >> I got to ask you the journey for the CIO and the CXOs out there, cause there's multiple CXOs. You've got chief security officers, some say chief economic officer because of crypto currency block chains coming around the corner. We got to talk about block chains because next year it's going to be in the wave slide. Cause decentralization is all about block chain. There should be a computing areas there. They all want to get in, they don't want to screw up. I need the head room but I don't want to make any move too early to get over my skis or foreclose an opportunity. So what's the path, Are they getting there house in order with the private cloud as a stepping stone to hybrid cloud. What are some of the day in life of the CIO right now because what we're seeing with the data is true private cloud on premise is growing really well. It's not declining in any capacity. That where the action is right now more than hybrid clouds. >> Yeah >> What's the CIO doing, is that the trend that you see, what's going on in their world? >> Well there are three or four things going. Then their SAS application that compute is going with that SAS vendor. So that is happening a bit. But I see the private cloud growing. Right, you know, I don't see it disappearing anywhere and I talked to my other CIOs and say should I be saying this or is it true or not? And everybody say yes it is growing and so is SAS and so is public cloud. But you know, a big majority of Vmware Compute is run on a private cloud and so I see it grow. So what the CIO's would look for is I want to run my private cloud efficiently but I also want to I don't want to have this large boxes for burst capacity. Say I have a Thanksgiving sale or a Christmas sale I don't want to have boxes sitting doing nothing. Can I take advantage of the public cloud for that and then cloud ready when I want to do some experiments on the newer development, let me try it on the public cloud. My feeling is my stats tells me and you guys are the experts on it is. If you have a scale at some scale, if your on a good private cloud the costs are going to be better for you. That's what my experience tells me. >> Because some of the things are predictable like hey retail seasons here, I can go burst in the cloud for that. >> Right. >> Then everything else kind of overflow to the cloud auto scaling. >> The key is labor. >> Yeah >> You could take labor out. So I just want to share some numbers with you guys. >> Sure. >> We so, what we call the true private cloud you're calling private cloud. >> Yeah. >> Growing at 33% vs the infrastructure as a service for the public cloud going at 15%. >> Wow. >> It's a 10 year forecast. We have true private cloud at 230 billion. The infrastructure as a service public cloud at 150 billion. So the biggest market growing the fastest to your point, SAS is bigger than both. >> Right. >> That's growing really really fast but it's the IT labor piece $150 billion coming out of labor going into, then their R&D and shifting to analytics and >> Value. >> Transformations, value producing things. >> I think that is the transformation. The transformation is labor is going out, automation is coming in. So I can put that on DevOps or the business kind of transformation projects. That's good to see. That's where intuitively as a practitioner I say, but it's good to have the data. I'm going to go read it up and see. That makes a lot of sense to me. >> Pat Gelsinger actually made a quote on the keynote I thought this is why I was honed in on that is that. He actually said shifting to value activities. That's analytics, you called vendor R&D which is basically a way to fund some of the new project where the hybrid and public are being operationalize to be predictable to some level. >> Sure exactly. >> But I totally see that the hybrid cloud is stalled in my opinion you guys can comment on it but based on my anecdotal hundreds of shows we go to it's hyped up beyond all recognition. >> Yeah. >> But it's happening after private cloud is set up because the operating model of the clouds got to get set up and it's just a law for the enterprises. >> Good points, maybe bursting, maybe some DR, but it's not a federated, set a federated apps or is it. >> At least I don't see it that way. I mean so things should be simple but not simpler is what they say. You got to get your house in order. I mean you can't, I mean I made the mistake of saying let's just outsource it because I don't want to think about it. This is the same thing that we are talking about let's just put it all in the cloud. What do you mean, I mean there are legacy apps. You still have them running at a good cost. You still have to know it. So I'm little old fashioned that way to say your house in order and have the options open for burst and other kind of things that you want to do. >> Well digital transformation also has a lot of pressure on top line revenues. So now >> Yeah. >> You can't just put the paint a side and not look at it. >> Sure. >> Put it in the corner. >> But look, IoT, we talked about this. You're going to have to set your whole business being censored. That needs a lot of late latency and other kind of issues lot of data. You need to be better have a good private cloud story for the IoT. Not everything can be put on the public cloud to make it happen. They just don't have the latency. There's law of physics still. So like a car is going to be a data center more less right, you need to make a response in a very short time. Factories have to have responsive systems and robotics. You can't go traverse the internet, go get a data from a public cloud, come back to make a decision on robot. So don't ignore as all I'm saying. Do everything but don't ignore it. >> The future, let's talk about future. AI is here, that's all also hyped up beyond all recognition but I love AI because it's got a software aspect to it. Machine learning super relevant. Block chain, Pat Gelsinger in his keynote really address and I thought a really clever way to weave this in, decentralization. >> Yeah. >> I see we all know it distributed computing is. >> Sure. >> Centralized database can be hacked. Distribution and decentralization around blockchain is interesting. So if we're putting our futuristic hats on. >> Yeah. >> What is IT look like in a totally non controllable, fully instrumented, blockchain crypto currency market? Is there going to be IT coins? I want some IT. >> I think so, I mean it's exciting, the only the thing with blockchain in enterprise is not the technology, it's our ability to think creatively on it. Right we are not able to envision these kind of things yet. It'll come in a year, I think it's our. We have to sit down and think about how to take advantage of that it's pretty exciting and you know we still have simple issues on you know. We know we can't centralize everything. That we've tried for years and years and years it's gone already. Now I want to decentralized, perhaps use technology like this to make sure I can still control what I want to control right. So the thing with block chain internally when I talk to people is, don't show me a proof of concept of technology I get the tech. What is the use case? >> Yeah. >> So we have to use our brains and I think in 6 months we will have it. We're just not there yet completed . >> That's where the destruction vector will be. >> Right. >> If anyone is doing in IT coin token you can say I'm interested. >> IoT we talked last time it looked like vaporware and now we have examples and every bodies doing it. I think block chain is definitely there. >> I mean supply chain could be applied to network with packets as we would say at the edge. Bask thanks for coming on the Cube. >> Sure, thank you. >> Great stuff good to see you. Cube coverage live here in Las Vegas with Vmworld 2017. We'll be right back with more coverage after this break. Thank you.