>> Narrator: From the cube studios in Palo Alto in Boston, connecting with thought leaders all around the world. This is a cube conversation. >> Hi, I am Stu Miniman and welcome to this special cube conversations. We're here with Dell Technology to share the news of an update to one of their product lines. We've watched for a number of years, Dell has taken their portfolio like I said they powered them up. So, of course the servers are known for a long time PowerEdge and we've seen many of the storage products and like going through their power up and here we have is the PowerFlex. So people that are familiar with what's happening in the software defined storage and hyper-converged space will remember the VX flex, so it's powered up. Joining me to discuss this important announcement, we have Matthew Paul, who's the Senior Director of Product Management and Anthony Cinelli, who's the Senior Director of Business Development, both with Dell Technologies. Matt, let's jump right into it. PowerFlex, powering up this segment of the market, give us the importance and what the announcement is. >> Great, thank you Stu thanks for having us. Yeah, I'm really excited to announce that we're powering up our product and we're moving our VxFlex product through the new power brand and the power name, really responding to customers and our customers taking this product on and aligning it and using it to be able to... Inline with our bigger portfolio that we have at Dell EMC, delivering outcomes for our customers. So it's an exciting timeframe and it really reflects this idea of customers' adoption, in the technology and our investment as Dell Technologies in this software defined storage, to kind of signify to the market that we're here to stay and this is an exciting thing we're working through. The second part around this on top of kind of the rebrand is a new launch of PowerFlex three five So this new software and this software information is delivering some key additions to our portfolio, including a replication, including a new HDMI 5 GUI and including some really cool additions to our software management stack that customers are really been asking for. >> Excellent. So AC, in normal times you're out meeting with a lot of customers, I'm sure you're still talking to a lot of customers, even if you're in work from home mode during the pandemic, but help us understand one of the things we know that Dell has done is it is spring line the portfolio, but when you talk about storage software-defined storage, converged, hyper-converged, there's still a few different options inside the Dell family. So tell us where PowerFlex fits and how it differentiates in position, compared to some of the other pieces. >> Yeah, great question. So, I have a pretty nice role here for Dell, which is, I am responsible for our entire portfolio of converged, hyperconverged, and software defined offerings. And really what that affords me is one particular luxury when I engage with customers. And that luxury is that I can start every single customer engagement with a question. Which is, what problem are you trying to solve? And that's really important because having a portfolio at my disposal allows me to lead with that question and really focus the conversation and solution on what their business problem is and how best to solve it. Now, the things we typically listen for when it comes to Flex are things like flexibility, things like performance, things like I'm trying to solve a platform where I want to re-platform my architecture to a software-defined outcome. But I need to run a wide variety of workloads. I need to run virtual workload, I need to run physical workload, I need to run container workload, I want to consolidate all of that onto a single modern software-defined infrastructure. Or we hear workload specific things. Things like I have an incredibly high performance Oracle Database, or I have a workload. One great example of a customer was cause of COVID they had to go from 60,000 to 160,000 remote users over a weekend. They did that on Flex with zero incremental infrastructure required for the storage. All the performance, all of the horsepower was fully capable of handling that increased capacity. Another customer, curbside pickup was a great application for their business, saw a hundred X performance requirement increase essentially over the course of a weekend because of COVID. Running on flex, they were able to swallow that performance increase with no problem. So a lot of what we see when it comes to Flex and the problems we're hearing are I need a platform that has a lot of inherent flexibility, or I have a very acute workload problem, then I need something very scalable and very performant to solve. But again, my luxury is I can always ask the customer the question first and then leverage the power of our portfolio to provide the best solution to solve for their business problem. >> All right, so AC, appreciate you talked about scale and performance, two of the really big things, if you talk about what's happening in this space. Matt, maybe you can help us sequin through a little bit, as to how this differentiates compared to other solutions in the market place we saw software-defined storage, hyper-converged infrastructure run through its wave in the last few years, you've got some very large customers, big brand names globally, as well as service providers that have used Flex in the past. So explain how this is different from others out there. >> Yeah, I think when we talk about how we manage and we work through this, it's our concepts, so I'm trying to really democratize this software to the masses, right? And be able to make it easy to use and simple to use. If you think about old or traditional software-defined storage, all the knobs and all the tweaks, sometimes it make it difficult to implement. And so you get these really high end extreme customers that leave all these knobs to tweak. We do that very, very well, but what we've been focused on the last couple of years is ensuring we can get that to multiple places through robust kind of investment in our flex manager space. So be able to automate and make things a lot easier and simpler for customers to use that way we can go down and provide this technology to more people. And then the other thing is kind of meeting customers where they need to be. And so a couple of key mechanism, which people consume our products is through our appliances and our racks or integrated racks. So when a customer comes after a kind of a full end to end white glove solution, whether I want to roll a big rack into their environment, plug it in, get it up and going, we have a full integrated rack that we deliver to the customers that really drive that outcome. And then if you think about the difference between that and the appliance the appliance has given us a little more flexibility. So if you want to plug that into an existing network or an existing environment, well, both of these things give you that extreme scale and performance that AC was just talking about, while that rich management experience. so I think you kind of aligned the consumption models and the new management, which also brings a big differentiated value to the product. >> Excellent, so, Matt when I hear you talking about these solutions, wonder if you can help connect this with how your customers are talking about cloud in general, you talked about consumption model, you talked about how to manager, so where does this fit? whether it's the Dell Tech Cloud or just your customers overall discussion of cloud. >> Yeah, so a couple of things come to mind here. Typically what we see with PowerFlex is customer saying, I'm trying to achieve what we call this common platform, which is, I want to build an on premises cloud, that gives me the flexibility to run all the workloads in my data center. And when we say all the workloads, that's everything from obviously your virtualization stack through things like your physical bare metal workloads typically your high performance databases all the way through this emerging world of containers. And those containers could be virtual, could be physical. And giving customers the value of running all of that on a single underlying software-defined infrastructure, with all of the automation life cycle management to go along with it, there's really just nothing like that in the market. So really where we're seeing this adoption is customers who are saying, I want to build my own cloud within my data center, that gives me the ability to run my workloads and because I'm building them on a common infrastructure, I can build automation that allows my end users to consume that infrastructure in a very cloud-like manner. So that's one big thing that we are seeing customers really bite off on. Another approach is within that Dell Technologies cloud platform. Which is, how do we leverage the best of all of the assets under the Dell Technologies umbrella, namely assets from VMware, VMware cloud foundations and everything they offer in their multicloud story, and providing a wide variety of options within the Dell Technologies portfolio to solve that. Obviously we have our VxRail platform, which is the most integrated solution vertically within that VMware stack. We also have other offerings within our storage portfolio that have the ability to plug into that, PowerFlex being one of those as an option for customers to leverage within that Dell Tech Cloud platform strategy. >> Excellent. Matt, you mentioned the new updates with three dot five maybe give us a little bit more on that If whether it's an existing customer, what things they've been asking for that are in this release, or maybe first some new people that might not have looked at the Flex family for awhile that three dot five might be bringing to the table. >> Yeah, I think the great thing about this product, it's an end to end solution. So we bring all these things together that add that value. A couple of the key things is that we've been hearing and driving towards our customers is around replication or a synchronous replication. So the ability for us to be able to align that and give that to customers is probably the most important piece of this release. We also did some really cool stuff in the management stack. So if you think about other competition or other products, being able to align firmware updates for example, or software updates for example, because of the scale of our product, we've had to align real unique things in our managements like stack like the ability to do rack level updates. So really innovative, really differentiated. So customers can take racks at a time down to do updates 'cause they don't have time when there's thousands of servers in their environment, they don't have time to do one note at a time in a round robin fashion. >> And a point to add onto that, right? What's really unique and Matt touched on it, this concept of democratization. We've always done large really well with this technology, right? In a way that really no other technology platform in this space can. What the team has built on the management stack is now allowing us to also do small and medium incredibly well, where we can bring this incredibly disruptive technology to the masses, to your general enterprise, to your general mid market type customer, who's not solving for hundreds or thousands of notes, but maybe solving for 10, 20 or 50 notes and delivering this very disruptive outcome that helps them much more adapt or much more quickly adapt to changing demands they have, harnessing all this flexibility, but doing it with point click operations that are incredibly simple across the full stack. >> Excellent, well, we've heard from Jeff Clark when you get the power brand on there, that's a message to the customers that this is a platform that's going to be with us for quite a number of years. Give us a look forward as to both of you as to what would you expect to see from PowerFlex. >> Yeah, I mean, we're really excited about the future, right? To your point, aligning with the winning roadmap, the investment level in this technology is really high within the organization, how we work well within the broader Dell Technologies portfolio is really exciting. So we'll continue to innovate and drive this democratization story that Anthony was talking about. Innovate in new data services, innovate in new management paradigms and stacks. Like the thing I just talked about in terms of doing rack level updates. And I think just giving customers, listening to our customers and providing that on a reoccurring basis is the critical thing. So we're really embracing this idea of providing updates on a regular basis to be able to respond to customers' needs on a daily day basis. >> Yeah, I think one thing to add to that, that I'm excited to see the team continue executing on is delivering actual workload solution-based outcomes, right? Very often customers will come to us and say, here's my workload problem, right? It's an Oracle, it's a Slung, it's an elastic stack or name your workload. The team's really done a great job of leveraging this platform and building full stack validated solutions, oftentimes in tandem with the application vendor. So customers can consume this technology with complete confidence to run oftentimes their most important or critical workloads, knowing that they have the full backing of the vendor, they have the full backing of the infrastructure provider and the application provider working together to deliver this technology as an outcome. And because of its extreme flexibility, we can adapt it to so many different workload scenarios and customers have responded to that incredibly well. So for me, I'm excited to see the team continuing to build that solutions portfolio because customers are really seeing a ton of value in that. >> Great. I guess final question I have for you Matt, probably up your alley there, availability of the product, is it available now at the launch and if I was a VxFlex customer before what does the move to PowerFlex move, how do I get from where I was to the future If there are any hardware changes or is it all software? >> Yeah, good point. So it's available now, there on the 25th, so, really excited for the customers and we do support customers going from the existing version to the new version. And so the upgrades are pretty straight forward, pretty easy to bring in that updated management stack and then bring in the updated FlexOS. I'm sorry, PowerFlex version. (giggles) >> It's all right, I'm sure customers will be going back and forth on the terms. All right, Matt and AC thank you so much for the update. Congratulations on the progress. (mumbles) All right, I'm Stu Miniman and thank you for watching the cube. (soft music)

>> Narrator: Live from Las Vegas, it's the Cube. Covering VM World 2017, brought to you by VM Ware, and it's eco system partners. >> Hi everybody, we're back. This is Dave Vellante with Peter Burris and we are here at VM World 2017 in Las Vegas. This is the eighth year of the Cube doing VM World, it started in Moscow and Moscow is under construction. So we're here back in Vegas. Although they've had VM World in Vegas a couple times. Collin Gallagher is here. He's the senior director of product marketing for Hyper Converged Infrastructure at Dell EMC. Collin, great to see you, thanks for coming to the Cube. >> Thanks Dave, thanks for having me. >> So first of all, how's the show going for you? >> Fantastic. Incredibly busy. As you can see, Hyper Converged is the hot thing yet again. I think last year was a big thing. But it's nice to see it's being... Customers are asking about it, you're seeing it in the keynotes. You know, the products being mentioned, Vsan, VXrail, et cetera. And just being swamped and busy and having a little bit of fun as well. >> So before we get into the announcements and we want to do that and give you the opportunity to talk about that, Peter and I and folks in the Cube have been talking all week, really all year. >> Peter: Yeah. >> About how customers are coming to the reality that I can't just reform my business and try to stuff it into the cloud, I really got to understand the realities of my business and bring the cloud model to the extent that I can, to the business. So what role does Hyper Converged play, in that context of bringing the cloud to my business? >> Well, I think Hyper Converged is the technology that allows you to do that. But as you bring out, as you mentioned, you have to also rethink about how you maintain your business, right? Because Hyper Converged consolidates you compute, your storage, your networking into one system. But that means that you may have to think about consolidating your storage teams, your compute teams and your networking teams as well. Right? And if you're going to keep them separate but merge the technology, there's going to be some impedance mismatched there. So Hyper Converged is an enabler for that, but it requires you to transform not just the technology, but also how you manage and staff your business as well. >> So I remember, I guess it was three years ago now, at VM World, you guys made the sort of first announcement of sort of software defined true Hyper Converged product and it's really evolved quite dramatically from then so maybe bring us up to where we are today and talk about some of the announcements that you made. >> Yeah, so... Yes, when Hyper Converged was announced a couple years ago, in a couple different products, but the point I was making a little bit earlier is that Hyper Converged is not just a single product. It's enabling technology. And much like Flash was five to seven year ago, it's going everywhere. >> Peter: It's a design approach. >> It's a design, exactly. >> Yeah, it's a design approach. And you're seeing it in appliances that have been very successful today, you're seeing it in larger rack scale systems, you're seeing it in software only systems, it depends on how and much, as you said, Dave, you want to transform right? You can do some of your build your own Hyper Converged stuff and not transform very much at all. You can do full turn-key cloud built on Hyper Converged, but that's going to require a vast degree of not just infrastructure transformation, but also work force transformation to go with it. >> Now, one of the things we've observed, Collin, and get some feedback from you on this is that... Cause we totally agree. In fact, we wrote a piece of research we called the Iron Triangle of IT and the fact that there is this very tight linking between people with skills, the automation that they use to manage products, that dictate the skills that dictate the automation, and breaking that as well. And a lot of our CIO clients are telling us, that you guy don't understand. The biggest problem I got is getting my people to work differently together. New processes, new approach to doing things. So one of the forcing funtions has been is historically when we think about designing systems to run work loads, we started with the CPU. We sized the CPU and then we did everything else. Now we start thinking about a lot of these data driven, digital oriented kinds of systems. We're thinking about something different. That catalyzed with this enormous performance improvements and storage over the last few year through Flash, vSAN related types of things. What are some of the new design principles that people have to factor as they start thinking about the role that Hyper Converged is going to play? >> So let me play off that. So yes, people design for the CPU because that was the bottle neck, right? Then as CPU performance grew, 5X, 10X, et cetera, they started designing for storage because that became the bottle neck, right? So part of your question is what's going to be the next bottleneck? Right? And I think you just had Chad talking on before. I think the network may be that upcoming bottleneck right now. You know, particularly in the Hyper Converged world where everything is connected through the network. That's your back plan. It's a different approach to storage. So designing around your network capabilities or your network infrastructure, you know, deploying Hyper Converged in a branch office with one GIG is very different than deploying Hyper Converged in a data center with 25 GIG and how you do it. So that's one, but I think Hyper Converged is all about balance in general, right. There's a fixed ratio depending on the product implementation of storage to compute, right? And generally they like to be in the Goldilocks zone, right? Not too much CPU, just... Not too CPU heavy or not too much storage heavy. And I think as Hyper Converged is going more mainstream and more normal, it's pushing those subtle boundaries there. And I think things like flexing out to the cloud when you need additional storage or additional compute capability, is one of those design considerations you need to take into account as you're deploying Hyper Converged because, as you said, you're designing around constraints and there's some physical constraints you have to manage and you have to figure out how you can tap into some of the extra ones. >> So literally it's start with the outcomes, identify the data that's associated with those outcomes, figure out the physical characteristics necessary to apply and process and move that data or not move it. And use that as the starting point for the design considerations. Being very cognitive, going back to what Chad was talking about, that at the end of the day, it's the network that's binding these things and how far out is a protocol going to go, local versus wide area. >> I'm going to steal something that I read on Twitter the other day, that data is the new oil. Alright, and that's how you run your business. And just like how you ship oil to and from, from a well to a refinery, to finally to your gas station pump, you have to think of it, what's your data chain and how you get it and where you need to move it. >> So that's a term that we started using in the Cube in, I don't know, 2010. But what we found is that data is plentiful, but insights aren't. And so you see organizations really spending a lot of time, money, energy, trying to get to those insights, to give them competitive advantage and a new infrastructure emerging to support those. So I wonder, Collin, if you could talk about the portfolio, the products that you sort of look after and tie it into some of the things that you've announced this week. >> Yeah. So I look after our VM or Hyper Converged systems so Vxrail and Vxrack SDDC. You know, both jointly developed with VM Ware. I'm sure you've heard Pat and everybody else talk about them so if you've been watching any of the keynotes. But we also have a much larger portfolio. We have our Vsan ready nodes for customers who want to do it themselves, want to build their own systems. And again, that's, as we talk about degree of transformation, that allows customers to get into the Hyper Converged space, but not significantly transform how they're managing their business. We have the appliances. Obviously our Vxrail systems. So by the way, the news with the Vsan ready nodes is we're announcing them available on the Dell Poweredge 14G Platforms. Those are available now to order. On our Vxrail appliances, and the rest of the portfolio that'll be out on the 14G platform by the end of the year. But what's new with Vxrail, we're announcing Vxrail 4 dot 5, which provides life cycle management orchestration for the latest and greatest VM Ware software stacks. So Vsan, 6 dot 5, Vsan 6 dot 6 Vsphere 6 dot 5. So both of those are out now and available. With all the great goodness that you've seen and heard about them. We're also announcing new configuration options for our Vxrack SDDC platform. So that's our much larger, it's the big brother to Vxrail, fully turn-key, you know, software defined data center infrastructure including NSX, all managed under one umbrella. >> So a higher-end solution? >> It's a much higher-end solution. Much higher for larger... Not necessarily scale because you know, it's not necessarily scale because you can start pretty small. As low as-- >> Peter: But still organized, coherent, well-packaged. >> But you have to, again, if we're talking about degrees of transformation, if you go with an appliance, okay you manage your compute and storage together. If you're going with a rack scale system, your managing the network as part of that as well. So that's another degree of transformation you have to be willing to make. So that's what's really the big difference between the two. New configuration options, up to 40 different hardware configs available now for that so really driven by customer choice. I want lower powered CPU's for certain workloads, I want higher powered CPU's, I want more all Flash choices, so really flush that portfolio out. And then lastly, we're announcing, our EHC and NHC platforms from Dell EMC are available built on Vxrack SDDC as well. >> EHC acronym? >> Collin: Enterprise Hybrid Cloud. >> And? >> Native Hybrid Cloud. EHC and NHC, sorry. Both of those two systems, which had run on our Vblock infrastructure before, are now running on Vxrack SDDC as well. So you get fully turn-key hybrid cloud built on top of an HCI system. >> And when you think of a EHC, Enterprise Hybrid Cloud, and Native Hybrid Cloud, NHC, can you talk about the work loads? That customers should think about putting on each? >> Yeah, so EHC is much more for traditional workloads. For customers who are looking to get into hybrid cloud. Actually, we see a lot of, our number one customer for someone who buys EHC, is they've tried to build cloud on their own and failed. They want something turn-key, they don't want to make the same mistakes again, they have the scars, and they want something easier and simpler than building it themselves. But that is traditional workloads, your traditional data center workloads managed in a cloud environment. NHC, our Native Hybrid Cloud product is for cloud native workloads, it's actually turn-key pivotal systems. So it's PSC based so if you're deploying workloads that will run in pivotal and you want it as a test dev system in house, or you want to run that in house and then migrate it later to the cloud, that's what NHC is for. >> Okay, we got to leave it there. But I'll give you a last word on VM World 2017, cloud, Hyper Converged, a lot of new innovation. What's your bumper sticker, Collin, on the show? >> My bumper sticker is again, HCI is primetime, it's here, I used to say that, customers, when I started this job two years ago would tell me, "tell me why I need HCI?" And what customers are asking me now is, last year was, "tell me how I use HCI?" and this year it's "tell me where I can't use HCI?" So there's been this waterfall shift in how they're looking at doing it. >> Dave: So they like it, they're trying to apply it. >> Peter: What is it? How it works? And what's the impact? >> Dave: And I want to apply it in as many places as possible. Where are my blind spots? >> Yeah, where doesn't it fit? What are the constraints where it doesn't fit? >> Collin Gallagher, thanks so much for coming back in the Cube. >> Oh, my pleasure. Thanks, Dave. >> Keep right there, everybody. We'll be back, this is Dave Vellante. For Peter Burris, this is the Cube. We're live at VM World 2017 and we'll be right back.

[Voiceover] Live from the Mandalay Bay Convention Center in Las Vegas it's The Cube. Covering VMworld 2016. Brought to you by Vmware and it's ecosystems sponsors. Now, here are your hosts, John Furrier and Stu Miniman. >> Welcome back everyone we are here live in Las Vegas for VMworld 2016 at the Mandalay Convention Center. We're in the hang space where The Cube is located. I'm John Furrier with Stu Miniman. We're here with Chad Sakac the President of EMC's Converged Platform division formerly known as VCE. Welcome back. Great to see you. Fist pump. >> It's good to see you. >> Seven years we've been doing The Cube you've been on it every single year. >> I can't believe it. >> We love having you on. >> The Cube has become a fixture of VMworld for me. Seeing you guys. Your good looking faces. It puts a smile on my face. But I can't believe it's been seven years. That's insane. >> Yeah. The seven year itch as they say in VMworld. So I got to ask you. You're always candid and colorful. But you've seen the transition. You've been in the trenches. Coding. Now you're president of a division. Big division doing great. >> It's terrifying isn't it? (laughs) >> It's interesting. The Cube is bigger. We're all getting bigger. What's your take right now? You've seen the journey. Seven years. Where are we? >> VMworld has always had a huge community. One of the things that's been defining about VMware's whole journey has been the community. And that's one thing that has stayed pretty constant. Right? There's a lot of people here. This time in Vegas. Previously in San Fran. They share a passion and a love for all things that Vmware is doing. That said. It's a very different show. It's a very different context. It's a very different ecosystem. Literally at the beginning it was one product. Right? Now if you look at the keynotes they have to struggle to get all of the awesome into an hour and a half and do it in two days. Right? And they can only hit certain highlights. Sanjay did a great job today. Kit did a great job. My favorite, Yanbing. Yanbing Li has got passion, energy and loves her baby vSAN. But imagine trying to cram all of that stuff in previously in years past. If you go back seven years that would've been all of Vmworld would it had just been on just one thing. Right? And then obviously the other thing that's going on is the entire ecosystem has changed. So we're seeing consolidation in the ecosystem. But we're also seeing, I think Pat actually did the best job I've ever seen of that realistic balance of what's happening in traditional IT, private, public hybrid cloud models. And how that's going to play out over the next few years. But there' no question that public clouds are a huge part of the landscape for here. For now. For tomorrow. Forever. >> Pat got some criticism on Twitter. Also, some blog posts out there said that the keynote was a snoozer. But it was straight talk. And that's what the ecosystem wants and we're hearing. Stu might have his own opinion on this but what I'm hearing is I want to see the path. I want to see where VMware is going to be going so I can get behind that train. Clarify. Show me the straight and narrow roadways so I can turn up the gas a little bit. >> There's the expression that basically says the customer is always right. Or the people are always right. You can trust the people. Sometimes the customer is wrong. And sometimes the people are wrong. So last year they went bananas over vMotioning of VM between two clouds. Because it plays to the base. It plays to the audience who are like I love vMotion. Why wouldn't vMotion between clouds make sense? The reality of it is that while that was cool and technically accurate. This year's demonstration of basically saying no, you're not going to motion vm between on prem and public clouds very often, if at all. But you will need to be able to do things that bridge public clouds. Is actually a much more correct and relevant answer for the market. Now the difficulty is is that sometimes you're telling people things before there ready to fully internalize it. >> Embrace it. (laughs) It's shock of the system almost. Really. So you play the base. It's a lot like politics in that way. But I got to ask you the question. >> By the way. Just like in politics if you constantly play to the base you never move forward. >> Yeah. And this has always been a diverse ecosystem. So let's start with the cloud things. Obviously ecosystem is back on the table, I'd say. It's front and center. It's always been front and center but as it consolidates we're seeing its straight path. The question that people want to know is. Will everyone have fair access to the VMware as an independent company visa the new big mega merger was announced by Michael Dell just minutes ago that September seventh will be the close date. >> What are you talking about? >> Dell Technologies. >> What? (laughter) >> You can talk about it. Dell announced it. Michael tweeted about it. >> We're not bait and switching you. We'll show you his tweets if you want. >> I'm joking. I'm joking. And by the way, I'm so pumped and so excited. Frankly, I think not everybody understands exactly what's going on inside the industry. The server storage and networking ecosystems as stand alones are actually shrinking. As workloads move to SAS. As workloads move to public cloud IOS. The parts of the ecosystem that are growing are customers that are basically saying they want converged, hyper-converged and turnkey software stacks and that's they way they want to consume. They want to simplify stuff down. To be able to pull that off you have to have all the ingredients inside the stack. Increasingly, you will not be able to be competitive without having all the those components in the stack. And this is why I am passionate that convergence hyper-convergence and convergence and also turnkey software stacks will be at the center of Dell Technologies. And I keep telling Michael and he keeps agreeing which is a good thing. Right? The reality of it is is that we cannot, in spite of that statement being true, it is also true that people will continue to want variability. That may a be a declining set but it's a bigger set of customers. And the customers are like I'm all in on turnkey. So this one is smaller but growing faster this one's a much bigger ecosystem of, I'll mix and match whatever I want and put it together. Alright? So if you look at Yanbing's section. So she said HP with vSAN. Then she went VxRail and Yanbing thanks for the shout out during the session. That was awesome. They were powering basically some great events with Di data and powerful things in small packages. That's a highly integrated system. And then they brought up a customer that was totally building it themselves. Right? So it literally in a span of two minutes you had the continuum of build it yourself, a turnkey thing and it build it yourself. So will it be sustained? Yeah. Can you expect that we are going to lean in like crazy on our integrated stack? Yeah. But will we do it in exclusion of the ecosystem? No. >> There's just different use cases. >> Yeah. VxRail is winning in the marketplace because it's a highly opinionated vSphere HCIA. If you don't have vSphere. You don't like VMware it's not the HCIA for you. Right? However, more customers say yes than they say no. And that's awesome. But we know that we're going to need to create a next generation of the Microsoft Azure stack. On prem HCIA. It won't be built by the VxRail team. But there customers want it that way. And we're not talking about it a lot this week. But last week we launched VxRack new treno which is a turnkey open stack KVM SUSE based thing. Choice baby. >> So Chad, first of all the Dell deal is announced. So this is the final nail in the coffin of VCE, correct? >> Absolutely. Of course not. The reason that we are shifting the way we talk about VCE is something really simple. If I say VCE what's the first thing that appears in your brain? >> Stu: vBlock. >> Va-blah vBlock. And that's a good thing in a sense. >> How much revenue did you do last year, Chad? >> Three point five plus billion dollars. Almost entirely in vBlock and VxBlock. >> That would be a nice a public company on it's own. >> On it's own. Right. And growing at 40% cumulative annual growth rates. That is amazing. Right? >> It's not a fail. >> And by the way the thing that's interesting is that hasn't slowed down one iota in spite of the fact that everyone knows the Dell deal is going to close. However, the difficult it is is that we are no longer just he vBlock group. We have these hyper converged appliances that are growing like sync and customers are voting with their feet and their dollars. I think in a short amount of time we'll be the number one by customer, by revenue HCIA player in the market. But furthermore, we also do these turnkey cloud stacks. So realistically VCE is more of a product brand than it is a company brand. And we're no longer a separate company. We're a part of VMC and on the seventh we'll be part of Dell EMC. >> Chad, can you help us connect the dots? We've got the converged infrastructure. The platform. You've got some SUSE team. Talk about SAS and public cloud. How does Dell, EMC, VMware stay relevant going forward and play a part in that whole story? >> So it's a great question. I'm going to try to see if I can do this in an uncharacteristically concise way. Do you believe that hybrid cloud models will win? >> Stu: Sure. >> Chad: Do you really believe it? >> I mean what we have today isn't really good hybrid cloud but that's where we need to go. >> So, by the way, we need to make the on premise clouds as simple and easy to consume in utilized modes as the public clouds are. >> Stu: Love that. >> Chad: Right. However, I think that it is inherent that economics, governance, data gravity will always balance out some workloads biasing toward public. Some biasing towards private. Furthermore, do you think that there will be one cloud model that will win? Will it all be the VMware SDDC cloud? Will it all be Azure? Will it all be Amazon? Will it all be cloud foundry? Will it all be SoftLayer? >> Well Andy Jassy has an answer for you but many people will differ with that. Including Satcha and Michael and everybody else. >> I think that there's never been in the history of all time any sustained period where there's a singularity of a stack. >> VMware has done pretty good for a while. >> Yep. But, by the way, there's never been in all of history any extended period of time when there's been a singularity of a stack. Right? So our point of view is very simple. My mission in the converged platform division today is basically to build turnkey CI and HCI to power VMware powered clouds and Cloud Foundry power clouds. Tomorrow, meaning on the seventh, immediately my strategic posture toward Microsoft pivots. EMC has always had a partnership with Microsoft but nothing like Dell's. Right? So immediately, I'm going to go. Well we must have the best on and off premises version of the Microsoft Azure stack. Dell currently leads in that market but it's very early days of that. We go from having two clouds both on and off premises. To a third one that we add. And then of course there's a fourth one which says if you want to run your most mission critical, business critical, classic apps. Virtustream is the way to go for an SAP legacy landscape. That you want to put in the cloud. That needs to have an on premise variant too. So, four clouds. Each one on and off premises. Each one available in Capex or utilitized models. If we can pull that off we can be the strongest cloud player on the market bar none. I think that's cool. >> With the choice as the key sales pitch to the client which is pick the cloud that does the best job. >> The thing that's interesting is that sometimes choice is a euphemism for blah. Like I have no strategy. I have no opinion. It's just pick whatever you want and assemble it. What I'm describing is something a little different. Which is a choice between four highly opinionated turnkey offers. >> Okay. >> Right? Now of course, we'll enable customers to build there own things but I think that over time less and less customers are going to want to do that. >> And Chad, I think that points to what we've seen in the wave of converged infrastructure and cloud is we need to get out of that heterogenous mess where I've got the poor guy buried in wires. Running around. Trouble tickets and everything else like that. It needs to be simpler. We need to have the management tools. Chad, I want to get your viewpoint on VMware. One of the criticisms I've heard is kind of the cloud management stack. We've been swinging a bunch at this and we don't yet have a solution that customers are happy with. Where do you think we are? Where do we need to go? >> So, you've been around the block on this and customers who are watching this have been around the block on this. Cloud management platforms are tough. Its actually a very, very fragmented market. With very little consolidation in the past or even looking forward. Now inside that space vRealize is actually the strongest. And it's the most deployed. It's the most widely used. But again, I don't want to make it sound like ahh we're number one. Right? Clearly there's a lot of work to be done. Last night I was talking with Sajay who heads up the vRealize suite team. And what we've seen is that the team has done a lot of work out of the 6.x, 6.5 dot and you know 6.X days into the 7.X days. And customer feedback is that it's much closer to the mark. A in terms of core product workflow, upgrade-ability. All of those sorts of things. But also in the fact that it actually has extended out to be able to automate and deploy on top of Azure and AWS. In the beginnings of the extended cloud connects vision. Now that said. In those four opinionated cloud stacks. Now this is my personal opinion, here Stu. So I always have to safe harbor all that jazz. (laughs) I think that what you see is you see those highly opinionated cloud stacks. The CMP layers, the top part of it, being able to speak to each other but always favoring their own ecosystem. Right? I think that we're going to be in that mode for a long time. >> So Chad, some people might not be aware that in addition to the VCE products in there that the solutions piece and the cloud that you have. The progress that you've made. We've talked to some of your team. I think we've got Peter coming on today. Can you talk about the EHC NHC maybe even share a bit of revenue if you can. >> Yeah. Sure. First things first, it's important to understand this at its core. The original idea of VCE, which is now eight years old, was a basic premise that says we have a pile of giblets that are all awesome. However, customers struggled to assemble them. And they want to have a turnkey offer that they can lean on us to not only deploy but sustain, support as a single offering. That was the origination story. Replace server networking compute with hypervisor, IT business operations a CMP all of those things and you have the enterprise hybrid cloud. We started getting lots of feedback from customers. We love vSphere. We love vRealize. We love vRealize automation and operations. We love all of this log-in sites stuff. We're all in with Vmware can you guys give us the easy button? Right? And so we started on version one. Then on version two, version three, 3.5 and this week we announced version 4.0. Right? We're now up to hundreds of customers so it's still in the hundreds. But it is the most curated. The most turnkey way to get the VMware SDDC deployed. Now, I still think we have a long ways to go. Because we need to make it so push button, easy. And cloud foundations that Pat announced on Monday. Is a core part of that. Think of cloud foundations turning to validated designs and the enterprise hybrid cloud being the ultimate manifestations. >> Chad, just a clarification. Hundreds of customers but from a revenue standpoint that's probably bigger than the hyper-converged market. >> So you know what's fascinating. That's actually a fact. So I hadn't really thought about it. But we're currently on a revenue run rate that we don't disclose publicly, but I'm like, how do I tiptoe around this? It is larger than the largest HCIA players by a good market margin. >> Right. >> So you're talking about hundreds of millions of dollars worth of annual revenue. And customers are saying, look I'm in. I saw the keynote. I'm aligned with VM where I want to go. Right? And enterprise hybrid cloud is designed to do that. We keep reiterating on it. On virtual geek there's a whole slew of details on the 4.0 lease. And then the other thing that we started to see is we started to see customers say, I get it. With the enterprise hybrid cloud you've made my IT operations for classic IT better. How do you help my developers build the digital enterprise? Which doesn't start with infrastructure. And it doesn't start with IAS. It starts with the way developers see the world. Which is the platform layer. And we're on version 1.1 now of the native hybrid cloud which is targeted at how do we build a platform for building cloud native apps? And that starts not with infrastructure. Not with VMware. Not with EMC. Not with servers or network. It starts with cloud foundry. >> Chad, we got to wrap. I want to get one final point in and I want to get your thoughts on it. It's more of a historical perspective but also kind of a futuristic. Take your EMC hat off and put the personal Chad hat on. The ecosystem. Where is it going to go? Obviously it's consolidating. Which means it's shifting. So the old ecosystem was great and robust as you mentioned. It's not necessarily dying. It's just shifting. It's consolidating. So that means it's shifting to something else where there will be growth. Where is it moving? Where is that puck going so people can skate to where the puck will be? >> That's a great question, John. I'm always a geek at heart. I'm always going to run that vSphere cluster in my basement. It gives me joy and gratitude on cool new intel NUC. Great stuff. But in my new job. (laughs) as the leader of a big business. The broad landscape picture is fascinating. This isn't actually rocket science. You can decode it remarkably and quickly. In industries that are declining or under pressure. Secular pressure. Consolidation is inevitable and you have to pick your partners wisely. I think people underestimate how much giants that they would think of as safe and secure bets are under pressure. Michael was wise enough to take first mover advantage. Because in those periods no one has shrunk themselves to success. Right? Conversely, you see very diversified ecosystems. When you see a very diversified ecosystem ergo cloud management platforms. Ergo security, like oh my goodness, the number of security startups and players. A hyper converged startups. I count 39 of them at the last turn. Right? They go through a life cycle of explosion of ecosystems and then inevitable consolidation phase. And people look at that consolidation phase and say oh, the fun is all over. No that means that the fun has begun because your actually starting to really move the needle at customers. Right? So you can expect to see consolidation and security space. You can expect to see by the way very disruptive point technologies occur. The container ecosystem is going to explode and then consolidate. And when you see that consolidation happening the container act Sysco acquisition is one of the earlier indications in that space but just one of them. It means that it's moving from sizzle to steak. Again, look at the open stack ecosystem. About a year ago everyone was like, all the fun is over. All of them have consolidated down into the big massive players. It's because people are now getting down- >> John: Rubber is hitting the road. >> Rubber is hitting the road. >> So where is it going now? Where is the fun going to be? >> The fun is definitely going to be very much in new data fabrics and new applications. There's no rocket science there. The space that you saw the tip of the iceberg on the cloud. Cloud connection of how you can bridge. Bridge doesn't mean migrate it means create connective tissue between on premises and off premises clouds. It's going to be really, really interesting. I think one thing that is fascinating is roles for human beings that span functions. That is the new magic mojo. When I find someone who is a developer. Who understands infrastructure they've got mojo. When you find someone who understands the span of what's going on inside the ecosystem that person's got a bright future. >> As they say in baseball, the players have to have multiple tools in their bag. Chad, we got to break but great conversation. Thanks for coming on. Really appreciate it. Good seeing you. Congratulations on all your business success and September seventh is going to be the big close date for the mega transaction. >> It's going to be awesome and by the way guys, congrats to you. Seven years of this is great. I can't wait for next year. It'll be a lot of fun. >> Thanks. Chad Sakac here inside The Cube. Where all the things are happening at VMworld inside the Hang Space at the Mandalay Bay this year for VMworld 2016. I'm John Furrier with Stu Miniman. We'll be right back. You're watching The Cube. (upbeat music)