>> Live from Barcelona, Spain, it's theCUBE. Covering KubeCon CloudNativeCon Euope 2019. Brought to you by Red Hat, the Cloud Native Computing foundation and eco-system partners. >> Welcome back to the Fira here in Barcelona, Spain. This is theCUBE's coverage of KubeCon CloudNativeCon 2019. I'm Stu Miniman, my co-host for two days of coverage is Corey Quinn, and we're excited to have on the program a first time guest, but a company that we've known for quite a while, Daniel Lopez Ridruejo, who's the CEO and co-founder of Bitnami. Just announced recently that Bitnami is being acquired by VMware. Daniel, thanks so much for joining us and congratulations to you and the team on the 'exit' as it were. >> Thank you very much, gracias. It's an honor to be here. >> Yeah so we had Erica Brescia who's the co-founder of yours on theCUBE seven years ago. Back then I was trying to figure out exactly what Bitnami was and where it fit in this whole world. Maybe you can just bring us up to speed for those that maybe don't know, and there's all these people in the enterprise space that might not know your community that the dev space knows real well, as to bring us back the who and the why of Bitnami >> Yeah Erica is my co-founder and we have been building this together over the years. It has been quite a fair ride and, we started Bitnami as an offshoot of our previous company called Bedrock in which we made software easy to install. And then we realized that a lot of what people wanted to make easy to install on Linux was Open Source software, so we started working with companies like MySQL and SugarCRM, Splunk really early on when they were only four or five people, and over time we decided to do the same thing as an Open Source project for all those other tools and projects that didn't have a way to make them easy to install. We started as Bitnami.org, we wanted to emphasize that it was an Open Source project, was never going to be a company, and it didn't turn out that way. >> All right so, we got a lot of things to cover, but help us connect the dots as to those early you know, dot org, it wasn't a company, to a company having the dev space to, we're starting down the path towards the enterprise, which seemed to be a natural fit as to what happened today. >> Yeah so going back to your original question of why we wanted to make, was always being driven. There is all this marvelous Open Source software out there that is super difficult to use for a great majority of people, and we just wanted to lower the barrier to make it easy to use, and that's what got it started. We never expected the success. It turns out we went from a hundred, to a thousand, to ten thousand to hundreds of thousands of downloads, and you know, we're super popular with developers. We have literally millions of developers using Bitnami, and as part of that evolution, we started working with the cloud providers. We drive a significant percentage of usage for Amazon, for Google, for Microsoft, that's what makes it valuable to those cloud vendors, and as the next stage of the company, we wanted to go directly to the enterprises in which we already have a lot of developers in those same enterprises, but when you go move to production, you know that it's a lot of red tape, a lot of gates that you have to go about compliance and security, and that's where we're taking the company to. >> Nine, ten years ago I stumbled over you, over your company or I guess project at that time, and it was the second best way I ever found to run WordPress. The first of course is, don't run WordPress. I'm very serious. Don't run WordPress. And I'm curious now, with the acquisition of Bitnami, what is the longer-term vision for how this fits into a more cloud-native landscape. Is it continuing to just be the, well not just but, is it continuing to be the application you get from a catalog and it's up and running, is their a containerized story, is there something else I'm not seeing? >> No, that's the core of Bitnami, and that will continue to do that. What has evolved over time is that initially you could download an installer and run it on your Mac. And then we were one of the first early adapters of AWS, so we created all these AMIs and when, you know, people were thinking that we were crazy, that Amazon was a company that sold books, but you know, what were we doing? We kind of saw where it was going early on. And then as Kubernetes came along, we were really, really early there as well, and we were one of the early partners of these around Helm. We provided a lot of the Helm charts. Right now we may have dabbled a little bit on Serverless, So whatever comes next, we will be there and our goal continues to be the same thing, which is to make awesome software available to everyone. So independently of the underlying platform, that's where we're focusing, so, the core mission is not changing, we're just omitting that, and going after the enterprise, more red hat enterprise Linux, you know, more OpenShift, more multi tier, high availabilty, more production features. >> All right so, you talk about all those pieces, and you talk about linux and everything there. I want you help connect, how does that tie into VMware and what you see them doing today because, sure Linux has been something that could live on a hypervisor for a long time, but in many ways there's been struggles in competition between VMware and them and the Linux community in the past, but, you know, we're starting to see some of that change and maybe this helps accelerate some of that change. >> Yeah I think there is a couple of companies, Microsoft and VMware, that were completely different companies than five years ago and probably the decision would have been different for us like five years ago versus what the company is today and where they're going. For us VMware is, the holy grail of acquisition is 2 plus 2 equals five, and that's hardly the, you know, there's a lot of acquisitions that don't go that way. For us it was a very thought out decision and it was, I think it was clear for us in the sense that we have a very big footprint with developers, they own enterprise IT, we wanted to go enterprise, they wanted to go into developers, they understand Open Source, they understand distributed teams, yeah. >> Maybe, I'd love to hear your insight as to that developer community, because when I walk around the show floor, you know, there was that struggle between the enterprise and the developers, and now, the storage world, we need to get CI/CD and all these things and they're like "uh, we don't know how to get there" . And over the last few years, it seems there's been a blurring of the lines, and more enterprise is embracing it, Open Source is a big piece of that, so is it, as you said, five years ago this wouldn't have happened, but now it feels like we're ready for that next step of the curve. >> Correct. And all of that is because of this standardization, that Kubernetes is allowing, you can standardize business practices, and your seeing a consolidation, the CI/CD wall. And it's like, things that used to be very exotic now is business as usual. And it's a parallel, you know, I started using Linux in '93, when there was not even a concept of a Linux distribution, you have to do all these things just to get a prompt, but over time people have standardized, you know I remember there were like, 50 or 60 Linux distributions; StagWare, SLS. And eventually, everybody converged on Red Hat enterprise Linux. I think something similar is going to happen, we're just midway there, in which you will not have KubeCon because Kubernetes will be something transparent that is boring. So, we're not there yet, but at some point Kubernetes will be boring and there will be layers on top of that where all the action is. Or will be. >> From my perspective, coming from a small startup background, it seemed to me that VMware was always one of those stodgy, boring companies I didn't have much time for and lately there've been a series of high profile acquisitions, Heptio, Wavefront, CloudFront and now Bitnami, and it's really changing, almost without me noticing, my entire perception of their place in the modern evolving cloud ecosystem. >> I think so, and that's one of the things that attracted us and I talked to Victoria about it, get to spend a bit of time with the CEO, with the people at the high level. For us it was very important. But again, one thing we haven't mentioned is that, for the most part we have been bootstrapped. We have been profitable, we only took a little money from Ycombinator when we were already profitable. So we have choices. Sometimes our BC funded peers don't have that choice, so it was a very meditated decision, and for me for these kind of acquisitions, when a much bigger company joins forces with a smaller company, the strategies need to be aligned. And to me, VMware realized that the world, a few years ago, that the world is going to be moved to cloud, the world is going to go towards Kubernetes and containers. And the acquisition of Heptio, the acquisition of CloudHealth, told us that they're serious about that and that we can fit right in and take advantage of that transformation they are going. And so far it's working really, really, really well and that's part of what made us decide to go in this direction. >> Yeah Daniel, what can you tell us about things, once this actually does close, what will that mean for the brand? What about relationships with, you mentioned Heptio? But not only Heptio, Pivotal obvously is a big player in this space. How does all of that line up? >> With Heptio and other units like the marketplace's other groups, we were already working with them before the acquisition, with Heptio, with ksonnet and a bunch of other initiatives. We're just going to double down on that, and they want to keep Bitnami, they want to keep the brand, they want to keep the team. If anything we're going to get more resources, and again, that was the fact that they didn't want to touch something that is working. We have been partners for, I think, seven or eight years. We have gotten to know each other over that time and built that trust that is needed. In a way nothing is going to change. We're going to have the same team doing the same things, we're just going to have more access to their userbase. Which is what we're going to do. We started down this path because we were raising money to build an enterprise sales force, and at some point we decided, okay, this doesn't make sense. We're going to give away all this chunk of the company to get access to the enterprise, or to build a sales force to get access to the enterprise, when we can be part of VMware and get that for free. >> You've mentioned a fair bit about what's going to change as far as you getting exposure to new customers, effectively broadening into additional markets. What does this mean for your existing customers who are, in some cases, whenever you're a customer of a small-ish company, and there's an acquisition, it sometimes is natural to be a little concerned of, do I need to find a new vendor? Do I need to find a new provider? And frankly, there's nothing else like you that I've ever seen on the market. >> No, that's a really good question. For us, what is a little bit unique is we have millions of users, but we only have a handful of customers. So our customers are AWS, Google, Microsoft, Oracle. So it was very important; VMware is already a vendor to all of these; and so far everybody is going to stay and we're just going to continue and deepen the relationship. And that's one of the things that made this attractive. So for customers, nothing is going to change. And we're just going to continue to deepen those relationships. And again, that was important. Had we gone through some of the other options there would have been a lot of very outward conversations to have and that is not the case. >> Yeah Daniel, how about the developer community itself. It's just had millions of downloads out there. We understand how some of the reaction can be. >> Yeah, everybody is like, is VMware going to be the evil company that's going to touch that? And I think so far the feedback has been extremely positive, including even Hacker News, right, which is shocking. >> And those people don't like anything. >> I've been high Hacker News since the very beginning and it can be harsh. So it was something I was monitoring how people. And so far it has been very positive and that's only not a testimony how much people like Bitnami but also again, VMware acquire Heptio and everything's great. We talk to a lot of the people at Heptio, you know, hey how are things going? How has it been? And everybody loved it there, so for us it was something that gave us a lot of reassurance that all these other companies with a lot of Open Source DNA were being successful there and gave us reassurance. Time will tell. We'll see one year from now where we are, but so far everybody that we have talked to, all the conversations have been great. >> So Daniel you have a very interesting viewpoint on this whole ecosystem, we work with all the cloud providers. Any commentary you'd give of, you talk about that midway point of maturity? Where do you see things today, where do you see them going? What do we need to fix as an industry? >> Well it's very difficult to predict where things are going I just think that at this point it's very safe to say that it's going to be a multi-cloud war. That was not like three, four years ago. It seemed like it could be a repeat of the '90s in which Microsoft own ninety-something percent of the market share. And there was a lot of things that didn't make sense. Right now at least Amazon, plus a bunch of other clouds, are viable, and if anything they are growing. So a lot of companies like HashiCorp, like VMware. Companies that support this multi-cloud environment, not all of them, but all of them are very well positioned to thrive because it's not going to change any time soon. The other thing I think that is safe to assume is, we are going to have more artifacts than ever, so companies like Artifactory, I think they will do well. As any companies have to do to do with security. We're going to have more security issues, not less. But in the long term that's as much as I can predict. >> All right, well, Daniel, thank you so much. Congratulations again, and we look forward to seeing you at VMworld. Where we'll have theCUBE there. It'll actually be our tenth year being at Vmworld. >> Awesome >> So we're excited and always happy to talk to, especially the startups some great news here. For Corey Quinn, I'm Stu Miniman, thanks as always for watching theCUBE.

(intense orchestral music) >> Hello everyone, welcome to this special CUBEConversation, I'm John Furrier, co-host of theCUBE, co-founder of SiliconANGLE Media. I'm here with Erica Brescia, who's the co-founder and Chief Operating Officer at Bitnami, it's the app store for the cloud, they do automated packaging, an application provider. Great to see you, CUBE alumni, great to have you in the studio, thanks for coming in. >> Great to be here, thanks for having me. >> So, so much going on, you've been to theCUBE multiple times, we see each other at conferences and, you made some time, thanks for comin' down, appreciate it. >> Yeah. >> So Bitnami's doing some great things, so give us the update, what's goin' on with the company? >> Sure. So we just launched our new offering called Stacksmith, which is our first enterprise offering that basically takes all the tooling that we've built to deliver the application catalog that we have onto all the major cloud vendors, and allows enterprise IT departments to package up their own applications, both for cloud and cloud-native platforms, as well as for whatever they're running in the enterprise today. So, it kind of meets them where they are, helps them automate the application packaging and maintenance in place today, and then sets them up to successfully move to the cloud and Kubernetes and containers over time. >> So it's kind of reverse of this journey to the cloud, you go to where the user, the customers are, help them put it together. >> And make the journey, really. So what we find is a lot of the more traditional orchestration and packaging tools just aren't well suited to cloud and containers in particular. And so enterprises are looking for new tools to help them solve current problems, which is: we need to support all these different platforms, we might have some things running internally in VMware, we're running some things on Amazon, maybe using cloud formation, and now they're trying to get to Kubernetes, and they're trying to figure out how they can do that without having a separate pipeline for everything, and that's the problem that Bitnami solves. >> Yeah, and that's been a bit, we've identified a product at Amazon, then, I want Azure, I want Google Cloud, I got to hire a different development team, different stacks. So there's kind of this problem with multi-cloud. How are you guys talkin' to customers about it? 'Cause this seems to be the hybrid cloud main problem today. It's like, okay I see the cloud, I understand I'm going to be doing a lot of stuff in the cloud, or cloud's going to be on-prem, and it's going to be in the cloud. How do I get ready for the cloud? That seems to be a number one question. >> Yeah, and I think what people are struggling with is, you know, there're a lot of companies out there, particularly in the cloud-native space, that just say: if you just rebuild everything, then your life will be so much better, right? But that's not really realistic for most companies. They need to be able to take what they have, and be able to package it in such a way that they get a lot of the benefits of the cloud and containers without completely re-architecting everything. Because, it might be practical for, say a new start up, or a company like Netflix or Spotify to do that, but lets face it, most companies are not that, most companies have too many demands on their IT and Ops teams already, hiring talent is hard even for the startups working at the forefront of Kubernetes, so, you really need tools that are approachable and solve current problems, but again, I think the key is, set you up for success in the future, and I think we help people kind of bridge the gap between what they're doing today and what they're doing in the future without trying to push them in one direction, which might not make sense for them. >> Yeah, in Netflix, and the Googles of the world, are potential future scenarios of what they might look like, but they got to take care of the current move from IT to cloud, get ready for it. >> Yeah, maybe, and you know, for a lot of these internal applications it doesn't make sense to completely re-architect and rewrite them, like the ROI isn't there, and there are companies out there that have thousands of Java or .NET applications that they just need to be able to move perhaps out of their data center, in many cases it's being shut down, and, onto cloud platforms and so we try to find that nice balance between helping you get the advantage of the automation of cloud without having to invest in re-architecting apps that just aren't worth re-architecting. >> Got to ask you Erica, we've had a couple conversations, I forget what you were founded, at Bitnami, you've had a great journey, a lot of things have changed. When did you guys found 2010, or 2011? >> So we started Bitnami in 2013. The company before Bitnami was Bitrock, and we went through YCombinator in 2013, and that's when we really started growing out the company. First around the app catalog that we deliver both via Bitnami.com as well as all the major cloud platforms, and that's allowed us to bootstrap the business up to this point. And then obviously we took all of the learnings and the technology from delivering 140 applications across 14 different platforms, native and cloud, and productize that in Stacksmith, so our enterprise users, you know, we have over a million deployments a month, but people have only been consuming the things that we build now they can use our tooling, that we've been building out over the years, to automate the packaging of their own applications. >> And it's, just to kind of put some color commentary around that time, it wasn't the most calm waters of the cloud world, massive growth, a lot of things have happened, so containers come to the scene with Docker and that becomes standardized, now you've got Kubernetes, you got service meshes right around the corner, kind of now it sets a perfect opportunity for you guys to bring customers to this app store concept, for you guys. >> Yeah, and we see this great, we call it kind of the great unbundling, right? Where apps used to be distributed with the operating system and they kind of were this one cohesive piece, and now, with Kubernetes and cloud APIs, the applications are very separate, and so there's kind of this new operating system coming together, which is the operating system of containers and Kubernetes and cloud, and it allows you to combine these different pieces in ways that you never could before. Before, you know, you would just go to your OS repo to pull in the app that you wanted. >> And you see the trends, I mean, Google has the SRE concept sight, reliability, engineer, the operators on the VMware side, dealing with VMs kind of all converging together. So I got to ask you, how does that impact your customers with your new Stacksmith offering, what's the impact to the customers? Is it ease of use, is it ease of deployment, what's the main value at? >> So, I think the most important thing is, as you said, there're all these new technologies coming out and there's also cloud formation on AWS, and there's ARM on Azure, and each cloud vendor is coming out with their own tooling and then, like you said, there's operators for Kubernetes. The advantage that you get with Bitnami is you don't have to understand the intricacies of how to package for all of those different platforms because we do that for you. We abstract away having to understand how to build a cloud formation template versus a helm chart helps that Kubernetes, you know, package manager essentially and we've been very involved in helping define and further that project. We're actually the top provider of the official helm charts. So we see a lot of promise there but, what's interesting about Bitnami is at the end of the day we're platform agnostic. And once you start using Bitnami and Stacksmith, you can very easily add support for other platforms. So we have a customer who started out on AWS, for example, they wanted to give a try to running some things on Azure, and they essentially just had to flip a switch, and then they get an ARM template, instead of-- >> What was your alternative to that? If they didn't do that, what would they have to do? >> They would have had to do it either manually, or find system specific tools for each platform, to do it. So, there's no other like singular tool chain that lets you build natively for all the different platforms and that's the key, we don't try to abstract away ARM or any of these other orchestration technologies by giving you some kind of layer on top of them. We just make it really easy to build for those technologies and also, to maintain those applications and templates over time, so this isn't point-in-time thing, we track all of the updates in everything that goes into that image or a set of images, and allow you to automatically rebuild and redeploy across any of those platforms you need to support. >> You guys have been very successful in the cloud, but also have scar tissue like everybody else that's been through the cloud wars. And now, as it starts to hit kind of an inflection point, how has cloud changed now, what are we seeing now in cloud versus, say 2014, 2015 timeframe? >> Oh boy. So, I think the most interesting thing is how quickly Azure in particular has evolved. If I had to pick one thing that has been incredibly impressive and important in the changing cloud landscape, it's, you know, you go back to 2014, it was pretty much all AWS all the time, right? And, Amazon isn't quite the Goliath it used to be anymore, I mean there's-- >> Well it's still pretty damn big. >> They're still huge. Yeah, absolutely, but I'll tell you what, the others are gaining a lot of ground, and they have really interesting and different advantages, right? Google will send all of their amazingly smart engineers in to help you architect applications, or move them over, I've heard a lot of workloads moving off of AWS onto Google because Google is giving them so much love and support and trying to attract those workloads over. But Azure's advantage is their ecosystem, right? They really understand partnering in a way that Amazons retail DNA just, it doesn't lend itself to that, and so, I think Microsoft's approach to building out a really great ecosystem around Azure, coupled with their huge field sales team, which Amazon has just been building, they've never had an enterprise sales team, is making things really interesting and creating, for us, a great dynamic in the market because we like to see a number of cloud vendors flourish. >> You're an arms dealer. >> Yeah exactly! (Erica laughs) >> Whatever you want, any cloud. >> I don't know if our CMO would want me to put it that way, but. (laughing) >> Dave Alante's favorite term, by the way. >> Sure. >> It's good to be an arms dealer, or be Switzerland, as they, to be more politically correct. >> Yeah, we go with Switzerland. >> Azure's interesting, I was just having conversation with Dave about this, because, you know, you've got, consumerization of IT, and digital transformation, have been the biggest buzz words in IT for the past decade. First it was consumerization of IT, now it's digital transformation. If you think about it Amazon and Google are really the consumer companies, Azure is an enterprise company with an ecosystem, so it's going to be very interesting to see if consumerization is the winning formula or is it digital transformation on the enterprise side? So you got to be, watching that pretty closely. Your thoughts? >> So, I would say on the consumerization of IT side, I mean that is absolutely happening, and, there, we could talk for hours probably on why that trend is here and why it's not going away, just, expectations in general have changed with the advent of iPhone and app stores and convenience across every aspect of our lives, so, I think even Microsoft gets that, and I don't think that the consumer DNA of those companies actually gives them a real edge in this case. What is interesting is, every company is starting to really focus on their app stores and their marketplace strategies, and trying to provide a frictionless buying experience. And there're a bunch of announcements coming, both on the AWS side, and the Azure side in particular, around things that they're doing to ease the enterprise buying process. >> Well we identified the three things, SAS business is table stakes, IOT is coming, connected devices, and then you've got the mobile. Those three things are on 20 year runs. Talking about Bitnami's update, you mentioned Stacksmith, you have some new stuff there, you guys are hiring, what's the ramp up, marketing, cash flow, top line revenues? Go ahead, share it. >> I'm not giving you all that. (both laughing) But, yeah it's a really exciting time for us, obviously bringing this enterprise product to market. We're gearing up to scale quite significantly, so, Bitnami's is kind of unusual in the Valley in that we're bootstrapped, and we're very heavily engineering driven. >> So no outside funding? >> A million dollars in total, which pretty much doesn't even count in Silicon Valley, and that was really just they had a number of individual folks involved in the company, when we went through YC. >> So no venturing? >> No, no institutional funding So, we are just getting ready to build out the whole go to market team around the Stacksmith product, which is very new in the market, just launched in the last couple months. >> So is it generally available? >> Oh yes! Generally available, customers, lots of great things to talk about, but, we don't have the full sales team in place. >> And what's the benefits of Stacksmith? What's the bottom line value proposition? >> It's really helping you to automate the packaging and maintenance of your applications, whether internal or external, you know, third-party commercial apps that you're using internally, and deploying them on any of the platforms that you need to support. >> App store for the cloud, I love that. So let's talk about what you're workin' on, one of the things I'm really impressed, first of all I'm really impressed with what you've done with Bitnami, I love it, love the bootstrap stories, we were bootstrapped as well in the run of SiliconANGLE. So it's great, in Silicon Valley, I think that's like the top tier player, if you can bootstrap it to economic visibility around scale, that's a success so congratulations. But you also have something exciting going on with venture investing. X factor, >> X factor, yep. >> This is super impressive. You raised a small little fund, X factor, investing in women entrepreneurs. Take a minute to explain what X factor is, do you have some news coming, another fund coming? >> Sure, yeah it's been very exciting, so, in the free free time that I really don't have, but this is such a good cause it's worth it. We put together a three million dollar fund, to invest a hundred thousand dollars in 30 different companies, with at least one female founder. And this actually was spun out of fly bridge, we have our token guys, we call 'em Chip Hazard, who's a career venture investor, who's doing a lot of interesting things. But, he basically led the charge with a woman named Anna Palmer, to put together a group of female founders, that's what really differentiates us, I think, from the rest of the market, who are operating their own companies, to invest in these very early stage female founded companies And, I think that gives us a really unique advantage in the market of venture, in that first we have an incredible pipeline and deal flow because, you know, we know these folks who are starting the companies. And we also have a unique perspective on the challenges of getting a new venture off the ground, and I think we can really be an ally to the entrepreneurs that we're funding, and helping them get that first bit of funding in the door, we typically help them with their series A rounds and beyond and they really see us as a peer and someone they can relate to and come to for advice, and so, I think it's a pretty unique value prop that we have as a VC fund. >> Operating experience brings a lot to the table, so, you want to get those first three steps goin', get that venture off the ground, trust. >> Yeah, and we have a very diverse range of experiences that we can bring to bare too, I mean some of us have deep infrastructure experience, some folks are on the consumer side, we've got a few East Coast people, a few West Coast people, a few people scattered in other areas. And we all have different areas of expertise, right? I'm pretty strong on the business development side, and I'm business model, SAS, enterprise software. Some of the other women are much more familiar with like distribution deals, or hardware deals, or other consumer businesses as well, so I think we have a really unique range of experiences and expertise that we can bring to bare in supporting our founders. >> And mentoring too, it's being there for, you know, don't give up! >> Yeah! And we've had founders go through things, and they'll call us at, one of our founders I was just on the phone with, and she was looking at changing her role within the company to take on more responsibility, and we had a great conversation around that, and that resulted in her becoming the COO, which was fantastic. Another founder was going through a difficult time where she and her co-founder were splitting up, and I was able to talk her through that. And we have a lot of those stories where, I think, you know, we have really been seen as an ally who can help founders get through those times, because we've been there, and we can empathize. And, it's an interesting dynamic because everybody knows that we're not going to invest in the next round, so there's never any posturing to make sure that they're still selling us on investing in the company. It's all about, once we're in, we're in, and we'll do anything we can do to help you scale successfully over time. >> And the key is get to that next round, or get a clear line of sight on visibility in the union economics or, scale. >> Exactly. >> Alright, so how much is going into the next funding? Can you talk about the amount, or? >> Yeah, so we're not raising yet, we're just about to start raising, we're going to be expanding the number of investment partners on the team, which is fantastic, and I'm really excited to bring some amazing new women on board, so, you know, for the women out there who are maybe interested in starting to learn a little more about venture and have raised funding and build their own companies, please send us an email: hello@xfactorventures the fund should be about 10 million dollars, is the current target. >> How is it structured? Are they structured as limited partners, general partners? How is it, so if someone comes on board, as you expand the partnership what does it look like? >> Sure, so, we all do invest our own money, but the fund has LPs just like any other fund, so there's a number of great folks who have backed up X factor. We do bring in some of our own folks along the way, you know, I had people that I know, who have invested in the fund and I'm sure that will be the case in the next one, but it's not like the fund is only funded by the investment partners, we have LPs like any other fund. >> But you guys are taking profits out of it, through the caring, right? So typical venture capital? >> It's typical venture capital, you know, it's a fairly small fund to start as we work through things, but we expect it to grow quite significantly over time. I'll tell you, without giving away too much, that we have quite grand ambitions for the long term. >> Alright, well let's keep in touch on the deal flow, congratulations on Bitnami, and, we'll see you at the cloud shows, Amazon, Microsoft Ignite, Google Next. >> Everywhere, yep, I'll be there. >> Erica, thanks for coming on and spending some time here on theCUBE. CUBEConversations here in Palo Alto, I'm John Furrier, you're watching CUBEConversations, thanks for watching. (intense orchestral music)

(upbeat music) >> Welcome back, everyone. Live coverage here at KubeCon + CloudNativeCon here in Detroit, Michigan. I'm John Furrier, your host of theCUBE for special one-on-one conversation with Scott Johnston, who's the CEO of Docker, CUBE alumni, been around the industry, multiple cycles of innovation, leading one of the most important companies in today's industry inflection point as Docker what they've done since they're, I would say restart from the old Docker to the new Docker, now modern, and the center of the conversation with containers driving the growth of Kubernetes. Scott, great to see you. Thanks for coming on theCUBE. >> John, thanks for the invite. Glad to be here. >> You guys have had great success this year with extensions. Docker as a business model's grown. Congratulations, you guys are monetizing well. Pushing up over 50 million. >> Thank you. >> I hear over pushing a hundred million maybe. What the year to the ground will tell me, but it's good sign. Plus you've got the community and nurturing of the ecosystem continuing to power away and open source is not stopping. It's thundering away growth. Younger generation coming in. >> That's right. >> Developer tool chain that you have has become consistent. Almost de facto standard. Others are coming in the market. A lot of competition emerging. You got a lot going on right now. What's going on? >> Well, I know it's fantastic time in our industry. Like all companies are becoming software companies. That means they need to build new applications. That means they need developers to be productive and to be safely productive. And we, and this wonderful CNCF ecosystem are right in the middle of that trend, so it's fantastic. >> So you have millions of developers using Docker. >> Tens of millions. >> Tens of millions of developed Docker and as the market's changing, I was commenting before we came on camera, and I'd love to get your reaction, comment on it. You guys represent the modernization of containers, open source. You haven't really changed how open source works, but you've kind of modernized it. You're starting to see developers at the front lines, more and more power going to developers. >> Scott: That's right. >> They want self-service. They vote with their code. >> That's right. >> They vote with their actions. >> Scott: That's right. >> And if you take digital transformation to its conclusion, it's not IT serves the business or it's a department, the company is IT. >> That's right. >> The company is the application, which means developers are running everything. >> Yes, yes. I mean, one of the jokes, not jokes in the valley is that Tesla is in a car company. Tesla is a computer company that happens to have wheels on the computer. And I think we can smile at that, but there's so many businesses, particularly during COVID, that realize that. What happened during COCID? If you're going to the movies, nope, you're now going to Netflix. If you're going to the gym, now you're doing Peloton. So this realization that like I have to have a digital game, not just on the side, but it has to be the forefront of my business and drive my business. That realization is now any industry, any company across the board. >> We've been reporting aggressively for past three years now. Even now we're calling some things supercloud. If companies, if they don't realize that IT is not a department, they will probably be out of business. >> That's a hundred percent. >> It's going to transform into full on invisible infrastructure. Infrastructure as code, whatever you want to call that going, configuration, operations, developers will set the pace. This has a lot to do with some of your success. You're at the beginning of it. This is just the beginning. What can you talk about that in your mind is contributing to the success of Docker? I know you're going to say team, everything, I get that, but like what specifically in the industry is driving Docker's success right now? >> Well, it did. We did have a fantastic team. We do have a fantastic team and that is one of the reasons, primary reasons our success. But what is also happening, John, is because there's a demand for applications, I'll just throw it out there. 750 million new applications are coming in the market in the next two years. That is more applications that have been developed in the entire 40 years history of IT. So just think about the productivity demands that are coming at developers. And then you also see the need to do so safely, meaning ship quickly, but ship safely. And yet 90 some percent of every application consists of open source components that are now on attack surface for criminals. And so typically our industry has had to say one or the other, okay, you can ship quickly but not safely, or you can ship safely, but it's not going to go fast. And one of the reasons I think Docker is where it is today is that we're able to offer both. We're able to unlock that you can ship quickly, safely using Docker, using the Docker toolchain, using integrations we have with all the wonderful partners here at CNCF that is unique. And that's a big reason why we're seeing the success we're seeing. >> And you're probably pleased with extensions this year. >> Yes. >> The performance of extensions that you launched at DockerCon '22. >> Yes. Well, extensions are part of that story and that developers have multiple tools. They want choice, developers like choice to be productive and Docker is part of that, but it's not the only solution. And so Docker extensions allow the monitoring providers and the observability and if you want a separate Kubernetes stack, like all of that flexibility, extensions allows. And again, offers the power and the innovation of this ecosystem to be used in a Docker development and context. >> Well, I want to get into some of the details of some of your products and how they're evolving. But first I want to get your thoughts on the trend line here that we reported at the opening segment. The hot story is WebAssembly, the Wasm, which really got a lot of traction or interest. People enthous about it. >> Interest, yeah. >> Lot of enthusiasm. Confidence we'll see how that evolves, but a lot of enthusiasm for sure. I've never seen something this hyped up since Envoy, in my opinion. So a lot of interest from developers. What is Wasm or WebAssembly is actually what it is, but Wasm is the codeword or nickname. What is Wasm? >> So in brief, WebAssembly is a new application type, full stop. And it's just enough of the components that you need and it's just a binary format that is very, very secure. And so it's lightweight, it's fast and secure. And so it opens up a lot of interesting use cases for developer, particularly on the edge. Another use case for Wasm is in the browser. Again, lightweight, fast, secure also. >> John: Sounds like an app server to me. >> And so we think it's a very, very interesting trend. And you ask, Okay, what's Docker's role in that? Well, Docker has been around eight years now, eight plus years, tens of millions developers using it. They've already made investments in skills, talent, automation, toolchains, pipelines. And Docker started with Linux containers as we know, then brought that same experience to Windows containers, then brought it to serverless functions. About 25% of Amazon Lambdas are OCI image containers. And so we were seeing that trend. We were also seeing the community actually without any prompting from us, start to fork and play with Docker and apply it to Wasm. And we're like, Huh, that's interesting. What if we helped get behind that trend, such that you changed just one line of a Docker file, now you're able to produce Wasm objects instead of Linux containers and just bring that same easy to use. >> So that's not a competition to Docker's? >> Not a competition at all. In fact, very complimentary. We showed off on Monday at the Wasm day, how in the same Docker compose application, multi-service application. One service is delivered via Linux container, Another service is delivered via Wasm. >> And Wasm is what? Multiple languages? 'Cause what is it? >> Yes. So the binary can be compiled from multiple languages. So RAS, JavaScript, on and on and on. At the end of the day, it's a smaller binary that provides a function, typically a single function that you can stand up and deploy on an edge. You can stand up and deploy on the server side or stand up and deploy on the browser. >> So from a container standpoint, from your customer standpoint, what a Linux container is is a similar thing to what a Wasm container is. >> They could implement the same function. That's right. Now a Linux container can have more capabilities that a function might not have, but that's. >> John: From a workflow standpoint. >> That's right. And that's more of a use case by use case standpoint. What we serve is we serve developers and we started out serving developers with Linux containers, then Windows containers, then Lambdas, now Wasm. Whatever other use case, what other application type comes along, we want to be there to serve developers. >> So one of the things I want to get your thoughts on, because this has come up in a couple CUBE interviews before, and we were talking before we came on camera, is developers want ease of use and simplicity. They don't want more steps to do things. They don't want things harder. >> That's right. So the classic innovation is reduce the time it takes to do something, reduce the steps, make it easier. That's a formula of success. >> Scott: That's right. >> When you start adding more toolchains into the mix, you get tool sprawl. So that's not really, that's antithesis to developer. So the argument is, okay, do I have to use a new tool chain for Wasm? Is that a fact or no? >> That's exactly right. That was what we were seeing and we thought, well, how can Docker help with this situation? And Docker can help by bringing the same existing toolchain that developers are already familiar with. The same automation, the same pipelines. And just by changing a line of Docker file, changing a single line of composed file, now they get the power of Wasm unlocked in the very same tools they were using before. >> So your position is, hey, don't adopt some toolchain for Wasm. You can just do it in line with Docker. >> No need to, no need to. We're providing it right there out of the box, ready for them. >> That's raise and extend, as they would say, build Microsoft strategy there. That's nice. Okay, so let's get back into like the secure trusted 'cause that was another theme at DockerCon. We covered that deeply. Software supply chain, I was commenting on my intro with Savannah and Lisa that at some point open source means so plentiful. You might not have to write code. You got to glue together. So as code proliferates, the question what's in there? >> That's right. This is what they call the software supply chain. You've been all over this. Where are we with this? Is it harder now? Is it easier? Was there progress? Take us through what's the state of the art. I think we're early on this one, John, in the industry because I think the realization of how much open source is inside a given app is just now hitting consciousness. And so the data we have is that for any given application, anywhere from 75 to 85% is actually not unique to the developer or the organization. It's open source components that they have put together. And it's really down to that last 15, 25%, which is their own unique code that they're adding on top of all this open source code. So right there, it's like, aha, that's a pretty interesting profile or distribution of value, which means those open source components, where are they finding them? How are they integrating them? How do they know those open source components are going to be supported and trusted and secured? And that's the challenge for us as an industry right now is to make it just obvious where to get the components, how safe they are, who's standing behind them, and how easy it is to assemble them into a working application. >> All right. So the question that I had specifically on security 'cause this had come up before. All good on the trusted and I think that message is evergreen. It's a north star. That's a north star for you. How are you making images more secure and how are you enabling organizations to identify security issues in containers? Can you share your strategy and thoughts on that particular point? >> Yes. So there's a range of things in the secure software supply chain and it starts with, are you starting with trusted open source components that you know have support, that you know are secured? So in Docker Hub today, we have 14 million applications, but a subset of that, we've worked with the upstream providers to basically designate as trusted open source content. So this is the Docker official images, Docker verified publisher images, Docker sponsored open source. And those different categories have levels of certification assurance that they must go through. Generate an SBOM, so you know what's inside that container. It has to be scanned by a scanning tool and those scanning results have to be made available. >> John: Are you guys scanning that? >> So we provide a scanner, they can use another scanner as long as they publish the results of that scan. And then the whole thing is signed. >> Are you publishing the results on your side too? >> Yeah, we published our results through an open database that's accessible to all. >> Free. >> Free, a hundred percent free. You come in and you can see every image on hub. >> So I'm a user, for free I can see security vulnerabilities that are out there that have been identified. >> By version, by layer, all the way through. And you can see tracking all the way back to the package that's upstream. So you know how to remediate and we provide recommendations on how to remediate that with the latest version. >> John: And you don't charge for that. >> We don't charge for that. We do not charge for that. And so that's the trusted upstream. >> So organization can look at the scan, they can look at the scan data and hopefully, what happens if they're not scanned? >> So we provide scanning tools both for the local environments for Docker Desktop, as well as for hub. So if you want to do your own scan, so for example, when you're that developer adding the 15, 25%, you got to scan your stuff as well. Not just leave it up to the already scanned components. And so we provide tools there. We also provide tools to track the packages that that developer might be including in their custom code, all the way back upstream to whatever MPM repo or what have you that they picked up. And then if there's a CVE 30 days later, we also track that as well. We say, Hey, that package was was safe 29 days ago, but today CVE just came out, better upgrade to the latest version and get that out there. So basically if you get down to it, it's like start with trusted components and then have observability not just on the moment. >> And scan all the time. >> Scan all the time and scanning gives you that observability and importantly not just at that moment, but through the lifecycle of the application, through lifecycle of the artifact. So end-to-end 24/7 observability of the state of your supply chain. That's what's key, John. >> That's the best practice. >> That's the key. That's the key. >> Awesome, I agree. That's great. Well, I'm glad we've dug into that's super important. Obviously organizations can get that scanning that's exceed the vulnerabilities, that can take action. That's going to be a big focus here for you, security. It's not going to stop, is it? >> It's never going to stop because criminals are incentive to keep attacking. And so it's the gift that keeps on giving, if you will. >> Okay, so let's get into some of the products. Docker Desktop seems to be doing well. Docker Hub has always been a staple of it. And how's that going? >> Yeah, Docker Hub has 18 million monthly actives hitting it and that's growing by double digits year over year. And what they're finding, going back to our previous thread, John, is that they're coming there for the trusted content. In fact, those three categories that I referenced earlier are about 2000 applications of the 14 million. And yet they represent 56% of the 15 billion downloads a month from Docker Hub. Meaning developers are identifying that, hey, I want trusted source. We raise those in the search results and we have a visual cue. And so that's the big driver of hub's growth right now, is I want trusted content, where do I go? I go to Hub, download that trusted open source and I'm ready to go. >> I have been seeing some chatter on the internet and some people's sharing that they're looking at other places, besides hub, to do some things. What's your message to folks out there around Docker Hub? Why Docker Hub and desktop together? 'Cause you mentioned the toolchain before, but those two areas, I know they've been around for a while, you continue to work on them. What's the message to the folks out there about stay with the hub? >> Sure. I mean the beauty of our ecosystem is that it's interoperable. The standards for build, share and run, we're all using them here at CNCF. So yes, there's other registries. What we would say is we have the 18 million monthly active that are pulling, we have the worldwide distribution that is 24/7 high, five nines reliability, and frankly, we're there to provide choice. And so yes, we have have our trusted content, but for example, the Tanzu apps, they also distribute through us. Red Hat applications also distribute through us because we have the reach and the distribution and offer developers choice of Dockers content, choice of Red Hats content, choice of VMware's, choice of Bitnami, so on so forth. So come to the hub for the distribution to reach and that the requirements we have for security that we put in place for our publishers, give users and publishers an extra degree of assurance. >> So the Docker Hub is an important part of the system? >> Scott: Yes, very much so. >> And desktop, what's new with desktop? >> So desktop of course is the other end of the spectrum. So if trusted components start up on Docker Hub, developers are pulling them down to the desktop to start assembling their application. And so the desktop gives that developer all the tools he or she needs to build that modern application. So you can have your build tooling, your debug tooling, your IDE sitting alongside there, your Docker run, your Docker compose up. And so the loop that we see happening is the dev will have a database they download from hub, a front-end, they'll add their code to it and they'll just rapidly iterate. They'll make a change, stand it up, do a unit test, and when they're satisfied do a git commit, off it goes into production. >> And your goal obviously is to have developers stay with Docker for their toolchain, their experience, make it their home base. >> And their trusted content. That's right. And the trusted content and the extensions are part of that. 'Cause the extensions provide complimentary tooling for that local experience. >> You guys have done an amazing job. I want to give you personal props. I've been following Docker from the beginning when they had the pivot, they sold the enterprise to Mirantis, went back to the roots, modernized, riding the wave. You guys are having a good time. I got to ask the question 'cause people always want to know 'cause open source is about transparency. How you guys making your money? Business is good. How's that work and what was the lucky, what was the not lucky strike, but what was the aha moment? What was the trigger that just made you just kick in this new monetization growth wave? >> So the monetization is per seat, per developer seat. And that changed in November 2019. We were pricing on the server side before, and as you said, we sold that off. And what changed is some of the trends we were talking about that the realization by all organizations that they had to become software companies. And Docker provided the productivity in an engineered desktop product and the trusted content, it provided the productivity safely to developers. And frankly then we priced it at a rate that is very reasonable from an economic standpoint. If you look at developer productivity, developers are paid anywhere from 150 to 300 to 400, 500,000 even higher. >> But when you're paying your developers that much, then productivity is a premium. And what we were asking for from companies from a licensing standpoint was really a modest relative to the making those developers product. >> It's not like Oracle. I mean talk about extracting the value out of the customer. But your point is your positioning is always stay quarter of the open source, but for companies that adopt the structural change to be developer first, a software company, there's a premium to pay because you devalue there. >> And need the tooling to roll it out at scales. So the companies are paying us. They're rolling it out to tens of thousand developers, John. So they need management, they need visibility, they need guardrails that are all around the desktop. So, but just to put a stat on it, so to your point about open source and the freemium wheel working, of our 13 million Docker accounts, 12 are free, about a million are paid for accounts. And that's by design because the open source. >> And you're not gouging developers per se, it's just, not gouging anyone, but you're not taking money out of their hands. It's the company. >> If the company is paying for their productivity so that they can build safely. >> More goodness more for the developer. >> That's right. That's right. >> Gouging would be more like the Oracle strategy. Don't comment. You don't need to comment. I keep saying that, but it's not like you're taxing. It's not a heavy. >> No, $5 a month, $9 a month, $24 a month depending on level. >> But I think the big aha to me and in my opinion is that you nailed the structural change culturally for a company. If they adopt the software ecosystem approach for transforming their business, they got to pay for it. So like a workflow, it's a developer. >> It's another tool. I mean, do they pay for their spreadsheet software? Do they pay for their back office ERP software? They do >> That's my point. >> to make those people popular or sorry, make those people successful, those employees successful. This is a developer tool to make developer successful. >> It's a great, great business model. Congratulations. What's next for you guys? What are you looking for? You just had your community events, you got DockerCon coming up next year. What's on the horizon for you? Put a plugin for the company. What are you looking for? Hiring? >> Yeah, so we're growing like gangbusters. We grew from 60 with the reset. We're now above 300 and we're continuing to grow despite this economic climate. Like our customers are very much investing in software capabilities. So that means they're investing in Docker. So we're looking for roles across the board, software engineers, product managers, designers, marketing, sales, customer success. So if you're interested, please reach out. The next year is going to be really interesting because we're bringing to market products that are doubling down on these areas, doubling down a developer productivity, doubling down on safety to make it even more just automatic that developers just build so they don't have to think about it. They don't need a new tool just to be safer. We hinted a bit about automating SBOM creation. You can see more of that pull through. And in particular, developers want to make the right decision. Everyone comes to work wanting to make the right decision. But what they often lack is context. They often lack like, well, is this bit of code safe or not? Or is this package that I just downloaded over here safe or not? And so you're going to see us roll out additional capabilities that give them very explicit contextual guidance of like, should you use this or not? Or here's a better version over here, a safer version over there. So stay tuned for some exciting stuff. >> It's going to be a massive developer growth wave coming even bigger we've ever seen. Final questions just while I got you here. Where do you see WebAssembly, Wasm going? If you had to throw a dart at the board out a couple years, what does it turn into? >> Yeah, so I think it's super exciting. Super exciting, John. And there's three use cases today. There's browser, there's edge, and there's service side in the data center of the cloud. We see the edge taking off in the next couple years. It's just such a straight line through from what they're doing today and the value that standing up a single service on the edge go. The service side needs some work on the Wasm runtime. The Wasm runtime is not multi-threaded today. And so there's some deep, deep technical work that's going on. The community's doing a fantastic job, but that'll take a while to play through. Browsers also making good progress. There's a component model that Wasm's working on that'll really ignite the industry. That is going to take another couple years as well. So I'd say let's start with the edge use case. Let's get everyone excited about that value proposition. And these other two use cases will come along. >> It'll all work itself out in the wash as open source always does. Scott Johnston, the Chief Executive Officer at Docker. Took over at the reset, kicking butt and taking names. Congratulations. You guys are doing great. Continue to power the developer movement. Thanks for coming on. >> John, thanks so much. Pleasure to be here. >> We're bringing you all the action here. Extracting the signal from the noise. I'm John Furrier, day one of three days of wall-to-wall live coverages. We'll be back for our next guest after this short break. (gentle music)

(soft music) >> Welcome back, everyone. theCube's live coverage. Day two here at VMware Explore. Our 12th year covering VMware's annual conference formally called Vmworld, now it's VMware Explore. Exploring new frontiers multi-cloud and also bearing some of the fruit from all the investments in cloud native Tanzu and others. I'm John Furrier with Dave Vellante. We have the man who's in charge of a lot of that business and a lot of stuff coming out of the oven and hitting the market. Ajay Patel, senior vice president and general manager of the modern applications and management group at VMware, basically the modern apps. >> Absolutely. >> That's Tanzu. All the good stuff. >> And Aria now. >> And Aria, the management platform, which got social graph and all kinds of graph databases. Welcome back. >> Oh, thank you so much. Thanks for having me. >> Great to see you in person, been since 2019 when you were on. So, a lot's happened since 2019 in your area. Again, things get, the way VMware does it as we all know, they announce something and then you build it and then you ship it and then you announce it. >> I don't think that's true, but okay. (laughs) >> You guys had announced a lot of cool stuff. You bought Heptio, we saw that Kubernetes investment and all the cloud native goodness around it. Bearing fruit now, what's the status? Give us the update on the modern applications of the management, obviously the areas, the big announcement here on the management side, but in general holistically, what's the update? >> I think the first update is just the speed and momentum that containers and Kubernetes are getting in the marketplace. So if you take the market context, over 70% of organizations now have Kubernetes in production, not one or two clusters, but hundreds of clusters, sometimes tens of clusters. So, to me, that is a market opportunity that's coming to fruition. Sometimes people will come and say, Ajay, aren't you late to the market? I say, no, I'm just perfectly timing it. 'Cause where does our value come in? It's enterprise readiness. We're the company that people look to when you have complexity, you have scale, you need performance, you need security, you need the robustness. And so, Tanzu is really about making modern applications real, helping you design, develop, build and run these applications. And with Aria, we're fundamentally changing the game around multicloud management. So the one-two punch of Tanzu and Aria is I'm most excited about. >> Isn't it true that most of the Kubernetes, you know, today is people pulling down open source and banging away. And now, they're looking for, you know, like you say, more of a robust management capability. >> You know, last two years when I would go to many of the largest customers, like, you know, we're doing good. We've got a DIY platform, we're building this. And then you go to the customer a year later, he's got knocked 30, 40 teams and he has Log4j happen. And all of a sudden he is like, oh, I don't want to be in the business of patching this thing or updating it. And, you know, when's the next shoe going to fall? So, that maturity curve is what I was talking about. >> Yeah. Free like a puppy. >> Ajay, you know, mentioned readiness, enterprise readiness and the timing's perfect. You kind of included, not your exact words, but I'm paraphrasing. That's a lot to do with what's going on. I mean, I'll say Cloud Native, IWS, think of the hyper scale partner, big partner and Google and even Google said it today. You know, the market world's spinning in their direction. Especially with respect to VMware. You get the relationship with the hyperscalers. Cloud's been on everyone's agenda for a long time. So, it's always been ready. But enterprise, you are customer base at VMware, very cloud savvy in the sense they know it's there, there's some dabbling, there's some endeavors in the cloud, no problem. But from a business perspective and truly transforming the VMware value proposition, is already, they're ready and it's already time now for them, like, you can see the movement. And so, can you explain the timing of that? I mean, I get enterprise readiness, so we're ready to scale all that good stuff. But the timing of product market fit is important here. >> I think when Raghu talks about that cloud first to cloud chaos, to cloud smart, that's the transition we're seeing. And what I mean by that is, they're hitting that inflection point where it's not just about a single team. One of the guys, basically I talked to the CIO, he was like, look, let's assume hypothetically I have thousand developers. Hundred can talk about microservices, maybe 50 has built a microservice and three are really good at it. So how do I get my thousand developers productive? Right? And the other CIO says, this team comes to me and says, I should be able develop directly to the public cloud. And he goes, absolutely you can do that. You don't have to come through IT. But here's the book of security and compliance that you need to enforce to get that thing in production. >> Go for it. >> Go for it. >> Good luck with that. >> So that reality of how do I scale my dev developers is turning into a developer experience problem. We now have titles which says, head of developer experience. Imagine that two years ago. We didn't talk about it. People start, hey, containers Kubernetes. I'm good to go. I can go get all the open source technology you talked about. And now they're saying no. >> And also software supply chains, another board that you're think. This is a symptom of the growth. I mean, open source is the software industry. That is, I don't think debatable. >> Right. >> Okay. That's cool. But now integration becomes vetting, trust, trusting codes. It's very interesting software time right now. >> That's right. >> And how is that impacting the cloud native momentum in your mind? Accelerating it? What inning are we in? How would you peg the progress? >> You know, on that scale of 1 to 10, I think we're halfway marked now. And that moved pretty quickly. >> It really did. >> And if you sit back today, the kinds of applications we're involved in, I have a Chicago wealth management company. We're building the next generation wealth management application. It's a fundamental refactoring of the legacy application. If you go to a prescription company, they're building a brand new prescription platform. These are not just trivial. What they're learning is the lift and shift. Doesn't work for these major applications. They're having to refactor them which is the modernization. >> So how specifically, are they putting some kind of abstraction layer on that? Are they actually gutting it and rewriting it? >> There's always going to be brownfield. Remember the old days of SOA? >> Yeah, yeah. >> They are putting APIs in front of their main systems. They're not rewriting the core banking or the core platform, but the user experience, the business logic, the AIML capability to bring intelligence in the platform. It's surrounding the capability to make it much more intuitive, much more usable, much more declarative. That's where things are going. And so I'm seeing this mix of integration all over again. Showing my age now. But, you know, the new EAI so is now microservices and messaging and events with the same patterns. But again, being much more accelerated with cloud native services. >> And it is to the point, it's accelerated today. They're not having to freeze the code for six months or nine months and that which would kill the whole recipe for failure. So they're able to now to fast track their modernization. They have to prioritize 'cause they got limited resources. But how are you guys coming up to that? >> But the practice is changing as well, right? Well, the old days, it was 12, 18 months cycle or anything software. If you heard the CVS CIO, Rohan. >> Yeah. >> Three months where they started to engage with us in getting an app in production, right? If you look at the COVID, 10 days to get kind of a new application for getting small loans going with Pfizer, right? These are dramatically short term, but it's not rewriting the entire app. It's just putting these newer experiences, newer capability in front with newer modern developer practices. And they're saying, I need to do it not just once, but for 100, 200, 5,000 members. JPMC has 50,000 developers. Fifty thousand. They're not a bank anymore. >> We just have thousands of apps. >> Exactly. >> Ajay, I want to get your thoughts on something that we've been talking about on our super cloud event. I know we had an event a couple weeks ago, you guys were one of our sponsors, VMware was. It was called super cloud where we're defining that this next gen environment's a super cloud and every company will have a super cloud capability. And underneath that is cross cloud capabilities. So, super cloud is like a super set on top of a multi-cloud. And little word play or play on words is, ecosystem partners versus partners in the ecosystem. Because if you're coming down to the integration side of things, it's about knowing what goes what, it's almost like building an OS if you're a coder or an operating systems person. You got to put the pieces together right, not just go to the directory and say, okay, who's got the cheapest price in DR or air gaping or something or some solution. So ecosystem partners are truly partners. Partners in the ecosystem are a bunch of people out on a list. How do you see that? Because the trend we're seeing is, the development process includes partners at day one. >> That's right. Not bolt-on. >> Completely agree. >> Share your thoughts on that. >> So let's look at that. The first thing I'm hearing from my customers is, they're trying to use all the public clouds as a new IS. That's the first API or contract infrastructures code IS. From then on they're saying, I want more and more portable services. And if you see the success of some of the data vendors and the messaging vendors, you're starting to see best of breed becoming part of the platform. So you are to identify which of these are truly, you know, getting market momentum and are becoming kind of defacto leaders. So, Kafka goes hand in hand with streaming. RabbitMQ from my portfolio goes with messaging. Postgres for database. So these are the, in your definition, ecosystem partners, they're foundational. In the security space, you know, Snyk is a common player in terms of scanning or Aqua and Prisma even though we have Carbon Black. Those become partners from a container security perspective. So, what's happening is the industry stabilizing a handful of critical players that are becoming multi-cloud preference of choice in this. And our job is to bring it all together in a all coordinated, orchestrated manner to give them a platform. >> I mean, you guys always had ecosystem, but I think that priority more than ever. It wasn't really your job at VMware, even, Dave, 10 years ago to say, hey, this is the strategic role that you might play one partner. It was pretty much the partners all kind of fed off the momentum of VMware. Virtualization. And there's not a lot of nuance there. There's pretty much they plug in and you got. >> So what we're doing here is, since we're not the center of the universe, unfortunately, for the application world, things like Backstage is a developer portal from Spotify that became open source. That's becoming the place where everyone wants to provide a plugin. And so we took Backstage, we said, let's provide enterprise support for Backstage. If you take a technology like, you know, what we have with Spring. Every job where developer uses Spring, how do we make it modern with Spring cloud. We work with Microsoft to launch a service with Azure Spring Enterprise for Spring. So you're starting to see us taking communities where they have momentum and bringing the ecosystem around those technologies. Cluster API for Kubernetes, for have you managed stuff. >> Yeah. >> So it's about standard. >> Because the developers are voting with their clicks and their code repos. And so you're identifying the patterns that they like. >> That's right. >> And aligning with them and connecting with them rather than trying to sell against it. >> Exactly. It's the end story with everyone. I say stop competing. So people used to think Tanzu is Kubernetes. It's really Tanzu is the modern application platform that runs on any Kubernetes. So I've changed the narrative. When Heptio was here, we were trying to be a Kubernetes player. I'm like, Kubernetes is just another dial tone. You can use mine, you can use OpenShift. So this week we announced support for OpenShift by Tanzu application platform. The values moving up, it's around outcomes. So industry standards, taking lead and solving the problem. >> You know, we had a panel at super cloud. Dave, I know you got a question. I'll get to you in a second. But the panel was the innovator's dilemma. And then during the event, one of the panelists, Chris Hoff knows VMware very well, Beaker on Twitter, said it should be called the integrators dilemma. Because the innovations here, >> How do you put it all together? >> But the integration of the, putting the piece parts together, building the thing is the innovation. >> And we come back and say, it's a secure software supply chain. It starts with great content. Did you know, I published most of the open source content on every hyperscaler through my Bitnami acquisition. So I start with great content that's curated. Then I allow you to create your own golden images. Then I have a build service that secures and so on and so forth and we bring the part. So, that opinionated solution, but batteries included but you can change it is been one of our key differentiator. We recognize the roles is going to be modular, come back and solve for it. >> So I want to understand sort of relationship Tanzu and Aria, John was talking about, you know, super cloud before we had our event. We had an earlier session where we help people understand that Aria was not, you know, vRealize renamed. >> It's rebranded. >> And reason I bring that up is because we had said it around super cloud, that one of the defining characteristics was, sorry, super PaaS, which is a specific purpose built PaaS layer designed to support your objective for multi-cloud. And speaking to a lot of people this week, there's a federated architecture, there's graph relationships, there's real time ability to ingest and analyze. That's unique. And that's IP that is purpose built for what you're doing. >> Absolutely. When I think what came out of all that learning is after 20 years of Pivotal and BA and what we learned that you still need some abstraction layer. Kubernetes is too low level. So what are the developer problems? What are the delivery problems? What are the operations and management problems? Aria solves all the operations and management problem. Tanzu solves a super PaaS problems. >> Yes. Right. >> Of providing a consistent way to build great software and the secure software supply chain to run on any infrastructure. So the combination of Tanzu and Aria complete the value chain. >> And it's different. Again, we get a lot of heat for this, but we're saying, look, we're trying to describe, it's not just IAS, PaaS, and SaaS of last decade. There's something new that's happening. And we chose the name super cloud. >> And what's the difference? It's modular. It's pluggable. It fits into the way you operate. >> Whereas PaaS was very prescriptive. If you couldn't fit, you couldn't jump down to the next level. This is very much, you can stay at the abstraction level or go lower level. >> Oh, we got to add that to the attribute. >> We're recruiting him right now. (laughs) >> We'll give you credit. >> I mean, funny all the web service's background. Look at an app server. You well knew all about app servers. Basically the company is an app. So, if you believe that, say, Capital One is an application as a company and Amazon's providing all the CapEx, >> That's it. >> Okay. And they run all their quote, old IT spend millions, billions of dollars on operating expenses that's going to translate to the top line called the income statement. So, Dave always says, oh, it's on the balance sheet, but now they're going to go to the top line. So we're seeing dynamic. Ajay, I want to get your reaction to this where the business model shift if everything's tech enabled, the company is like an app server. >> Correct. >> So therefore, the revenue that's generated from the technology, making the app work has to get recognized in the income. Okay. But Amazon's doing all, or the cloud hyperscale is doing all the heavy lifting on the CapEx. So technically it's the cloud on top of a cloud. >> Yes and no. The way I look at it, >> I call that a super cloud. >> So I like the idea of super cloud, but I think we're mixing two different constructs. One is, the cloud is a new hardware, right? In terms of dynamic, elastic, always available, et cetera. And I believe when more and more customer I talk about, there's a service catalog of infrastructure services. That's emerging. This super cloud is the next set of PaaS super PaaS services. And the management service is to use the cloud. We spend so much time as VMware building clouds, the problem seems, how do you effectively use the cloud? What problems do we solve around digital where every company is a digital company and the product is this application, as you said. So everything starts with an application. And you look at from the lens of how you run the application, what it costs the application, what impact it's driving. And I think that's the change. So I agree with you in some way. That is a digital strategy. >> And that's the company. >> That's the company. The application is the company. >> That's the t-shirt. >> And API is the currency. >> So, Ajay, first of all, we love having you in theCube 'cause you're like a masterclass in multiple dimensions. So, I want to get your thoughts on the abstraction layer. 'Cause we were also talking earlier in theCube here as well as before. But abstraction layers happen when you have major movements in markets that are game changing or major inflection points because you've reached a complexity point where it's working so great, this new thing, that's too complex to reign it in. And we were quoting Andy Grove by saying, "let chaos reign then reign in the chaos". So, all major industry moments go back 30, 40 years happen with abstractions. So the question is is that, you can't be a vendor, we've observed you can't be a vendor and be the abstraction. Like, if Cisco's running routers, they can't be the abstraction layer. They have to be the benefit of the abstraction layer. And if you're on the other side of the abstraction layer, you can't be running that either. >> I like the way you're thinking about it. Yeah. Do you agree? >> I completely agree. And, you know, I'm an old middleware guy. And when I used to say this to my CEO, he's like, no, it's not middleware, it's just a new middleware. And what's middleware, right? It's a thing between app and infrastructure. You could define it whatever we want, right? And so this is the new distributed middleware. >> It's a metaphor and it's a good one because it does a purpose. >> It's a purpose. >> It creates a separation but then you have, it's like a DMZ zone or whatever you want to call it. It's an area that things happen. >> But the difference before last time was, you could always deploy it to a thing. The thing is now the cloud. The thing is a set of services. So now it's as much of a networking problem at the application layer is as much as security problem. It's how you build software, how we design. So APIs, become part of your development. You can't think of APIs after the fact, right? When you build an API, you got to publish API because the minute you publish it and if you change it, the API's out of. So you can't have it as a documentation process. So, the way you build software, you use software consume is all about it. So to me, digital product with an API as a currency is where we're headed towards. >> Yeah, that's a great observation. Want to make a mental note of that and make that a clip. I want to get your thoughts on software development. You mentioned that, obviously software development life cycles are changing. I'll say open sources now. I mean, it's unlimited codes, supply chain issue. What's in the code, I get that verified codes going to happen. Is software development coding as much or is coding changing the notion of writing code? Or is it more glue layer you're writing. >> I think you're onto something. I call software developments composition now. My son's at Facebook or Google. They have so many libraries. So you don't no longer start with the very similar primitive, you start with building blocks, components, services, libraries, open source technology. What are you really doing? You're composing these things from multiple artifacts. And how do you make sure those artifacts are good artifacts? So someone's not sticking in security in a vulnerability into it. So, the world is moving towards composition and there are few experts who build the core components. Most of the time we're just using those to build solutions. And so, the art here is, how do you provide that set of best practices? We call them patterns or building blocks or services that you can compose to build these next generation (indistinct) >> It's interesting. >> Cooking meals. >> I agree with you a hundred percent what you're thinking. I agree about that worldview. Here's a dilemma that I'm seeing. In the security world, you've got zero trust. You know, Which is, I don't know you, I don't trust you at all. And if you're going to go down this composed, we're going to have an orchestra of players with instruments, say to speak, Dave, metaphor. That's trust involved. >> Yes. >> So you have two spectrums of issues. >> Yes. >> If software's going trust and you're seeing Docker containers getting more verifications, software supply chain, and then you got hardware I call network guys, love zero trust. Where's the balance? How do you reconcile that? Is it just decoupled? Nuance? I mean, what's the point? >> No, no. I think it all comes together. And what I mean by that is, it starts with left shifting it all the way to hands of the developers, right? So, are you starting with good content? You have providence of the stuff you're using. Are you building it correctly? So you're not introducing bad things like solar winds along the process. Are you testing it along the way of the development process? And then once in production, do you know, half the time it's configurations of where you're running the stuff versus the software itself. So you can think of the two coming together. And the network security is protecting people from going laterally once they've got in there. So, a whole security solution requires all of the above, a secure software supply chain, the way to kind of monitor and look at configuration, we call posture management or workload management and the network security of SaaS-e for zero trust. That's a hard thing. And the boundary is the application. >> All right. >> So is it earned trust model sort of over time? >> No, it's designed in, it's been a thing. >> Okay. So it's not a, >> Because it developed. >> You can bolt in afterwards. >> Because the developers are driving it. They got to know what they're doing. >> And it's changing every week. If I'm putting a new code out every week. You can't, it can be changed to something else. >> Well, you guys got guardrails. The guardrails constant is a good example. >> It stops on the configuration side, but I also need the software. So, Tanzu is all about, the secure chain is about the development side of the house. Guardrails are on the operational side of the house. >> To make sure the developers don't stop. >> That's right. >> Things will always get out there. And I find out there's a CV that I use a library, I found after the fact. >> Okay. So again, while I got here again, this is great. I want to get test this thesis. So, we've been saying on theCube, talking about the new ops, the new kind of ops that emerging. DevOps, which we believe is cloud native. So DevOps moving infrastructure's code, that's happened, it's all good. Open source is growing. DevOps is done deal. It's done deal. Developers are doing that. That ops was IT. Then don't need the server, clouds my hardware. Check. That balances. The new ops is data and security which has to match up to the velocity of the developers. Do you believe that? >> Completely. That's why we call it DevSecOps. And the Sec is where all the action is. >> And data. And data too. >> And data is about making the data available where the app meets. So the problem was, you know, we had to move the logic to where the data is or you're going to move the data where the logic is. So data fabrics are going to become more and more interesting. I'll give you a simple example. I publish content today in a service catalog. My customer's saying, but my content catalog needs to be in 300 locations. How do I get the content to each of the repos that are running in 300 location? So I have a content distribution problem. So you call it a data problem. Yes, it's about getting the right data. Whether it's simple as even content, images available for use for deployment. >> So you think when I think about the application development stack and the analytics stack, the data stack, if I can call it that, they're separate, right? Are those worlds, I mean, people say, I want to inject data and AI intelligence into apps. Those worlds have deployment? I think about the insight from the historical being projected in the operational versus they all coming together. I have a Greenplum platform, it's a great analytics platform. I have a transactional platform. Do my customers buy the same? No, they're different buyers, they're different users. But the insight from that is being now plugged in so that at real time I can ask the question. So even this information is being made available on demand. So that's where I see it. And that's most coming together, but the insight is being incorporated in the operational use. So I can say, do I give the risk score? Do I give you credit? It's based on a whole bunch of historical analytics done. And at the real time, processing is happening, but the intelligence is behind it. >> It's a mind shift for sure because the old model was, I have a database, we're good. Now you have time series database, you got graphs. Each one has a role in the overall construct of the new thing. >> But it's about at the end. How do I make use of it? Someone built a smart AI model. I don't know how it was built, but I want to apply it for that particular purpose. >> Okay. So the final question for you, at least from my standpoint is, here at VMware Explore, you have a lot of the customers and so new people coming in that we've heard about, what's their core order of operations right now? Get on the bandwagon for modern apps. How do you see their world unfolding as they go back to the ranch, their places, and go back to their boss? Okay. We got the modern application. We're on the right track boss, full steam ahead. Or what change do they make? >> I think the biggest thing I saw was with some of the branding changes well and some of the new offerings. The same leader had two teams, the VMware team and the public cloud team. And they're saying, hey, maybe VMware's going to be the answer for both. And that's the world model. That's the biggest change I'm seeing. They were only thinking of us on the left column. Now they see us as a unifying player to play across cloud native and VMware, the uniquely set up to bring it all together. That's been really exciting this week. >> All right, Ajay, great to have you on. Great perspective. Worthy of great stuff. Congratulations on the success of all that investment coming to bear. >> Thank you. >> And on the new management platform. >> Yeah. Thank you. And thanks always for giving us all the support we need. It's always great. >> All right Cube coverage here. Getting all the data, getting inside the heads, getting all the specifics and all the new trends and actually connecting the dots here on theCube. I'm John Furrier with Dave Vellante. Stay tuned for more coverage from day two. Two sets, three days, Cube at VMware Explore. We'll be right back. (gentle music)

>> From theCUBE studios in Palo Alto in Boston, bringing you data driven insights from theCUBE and ETR. This is Breaking Analysis with Dave Vellante. >> In the words of my colleague CTO David Nicholson, Broadcom buys old cars, not to restore them to their original luster and beauty. Nope. They buy classic cars to extract the platinum that's inside the catalytic converter and monetize that. Broadcom's planned 61 billion acquisition of VMware will mark yet another new era and chapter for the virtualization pioneer, a mere seven months after finally getting spun out as an independent company by Dell. For VMware, this means a dramatically different operating model with financial performance and shareholder value creation as the dominant and perhaps the sole agenda item. For customers, it will mean a more focused portfolio, less aspirational vision pitches, and most certainly higher prices. Hello and welcome to this week's Wikibon CUBE Insights powered by ETR. In this Breaking Analysis, we'll share data, opinions and customer insights about this blockbuster deal and forecast the future of VMware, Broadcom and the broader ecosystem. Let's first look at the key deal points, it's been well covered in the press. But just for the record, $61 billion in a 50/50 cash and stock deal, resulting in a blended price of $138 per share, which is a 44% premium to the unaffected price, i.e. prior to the news breaking. Broadcom will assume 8 billion of VMware debt and promises that the acquisition will be immediately accretive and will generate 8.5 billion in EBITDA by year three. That's more than 4 billion in EBITDA relative to VMware's current performance today. In a classic Broadcom M&A approach, the company promises to dilever debt and maintain investment grade ratings. They will rebrand their software business as VMware, which will now comprise about 50% of revenues. There's a 40 day go shop and importantly, Broadcom promises to continue to return 60% of its free cash flow to shareholders in the form of dividends and buybacks. Okay, with that out of the way, we're going to get to the money slide literally in a moment that Broadcom shared on its investor call. Broadcom has more than 20 business units. It's CEO Hock Tan makes it really easy for his business unit managers to understand. Rule number one, you agreed to an operating plan with targets for revenue, growth, EBITDA, et cetera, hit your numbers consistently and we're good. You'll be very well compensated and life will be wonderful for you and your family. Miss the number, and we're going to have a frank and uncomfortable bottom line discussion. You'll four, perhaps five quarters to turn your business around, if you don't, we'll kill it or sell it if we can. Rule number two, refer to rule number one. Hello, VMware, here's the money slide. I'll interpret the bullet points on the left for clarity. Your fiscal year 2022 EBITDA was 4.7 billion. By year three, it will be 8.5 billion. And we Broadcom have four knobs to turn with you, VMware to help you get there. First knob, if it ain't recurring revenue with rubber stamp renewals, we're going to convert that revenue or kill it. Knob number two, we're going to focus R&D in the most profitable areas of the business. AKA expect the R&D budget to be cut. Number three, we're going to spend less on sales and marketing by focusing on existing customers. We're not going to lose money today and try to make it up many years down the road. And number four, we run Broadcom with 1% GNA. You will too. Any questions? Good. Now, just to give you a little sense of how Broadcom runs its business and how well run a company it is, let's do a little simple comparison with this financial snapshot. All we're doing here is taking the most recent quarterly earnings reports from Broadcom and VMware respectively. We take the quarterly revenue and multiply by four X to get the revenue run rate and then we calculate the ratios off of the most recent quarters revenue. It's worth spending some time on this to get a sense of how profitable the Broadcom business actually is and what the spreadsheet gurus at Broadcom are seeing with respect to the possibilities for VMware. So combined, we're talking about a 40 plus billion dollar company. Broadcom is growing at more than 20% per year. Whereas VMware's latest quarter showed a very disappointing 3% growth. Broadcom is mostly a hardware company, but its gross margin is in the high seventies. As a software company of course VMware has higher gross margins, but FYI, Broadcom's software business, the remains of Symantec and what they purchased as CA has 90% gross margin. But the I popper is operating margin. This is all non gap. So it excludes things like stock based compensation, but Broadcom had 61% operating margin last quarter. This is insanely off the charts compared to VMware's 25%. Oracle's non gap operating margin is 47% and Oracle is an incredibly profitable company. Now the red box is where the cuts are going to take place. Broadcom doesn't spend much on marketing. It doesn't have to. It's SG&A is 3% of revenue versus 18% for VMware and R&D spend is almost certainly going to get cut. The other eye popper is free cash flow as a percentage of revenue at 51% for Broadcom and 29% for VMware. 51%. That's incredible. And that my dear friends is why Broadcom a company with just under 30 billion in revenue has a market cap of 230 billion. Let's dig into the VMware portfolio a bit more and identify the possible areas that will be placed under the microscope by Hock Tan and his managers. The data from ETR's latest survey shows the net score or spending momentum across VMware's portfolio in this chart, net score essentially measures the net percent of customers that are spending more on a specific product or vendor. The yellow bar is the most recent survey and compares the April 22 survey data to April 21 and January of 22. Everything is down in the yellow from January, not surprising given the economic outlook and the change in spending patterns that we've reported. VMware Cloud on AWS remains the product in the ETR survey with the most momentum. It's the only offering in the portfolio with spending momentum above the 40% line, a level that we consider highly elevated. Unified Endpoint Management looks more than respectable, but that business is a rock fight with Microsoft. VMware Cloud is things like VMware Cloud foundation, VCF and VMware's cross cloud offerings. NSX came from the Nicira acquisition. Tanzu is not yet pervasive and one wonders if VMware is making any money there. Server is ESX and vSphere and is the bread and butter. That is where Broadcom is going to focus. It's going to look at VSAN and NSX, which is software probably profitable. And of course the other products and see if the investments are paying off, if they are Broadcom will keep, if they are not, you can bet your socks, they will be sold off or killed. Carbon Black is at the far right. VMware paid $2.1 billion for Carbon Black. And it's the lowest performer on this list in terms of net score or spending momentum. And that doesn't mean it's not profitable. It just doesn't have the momentum you'd like to see, so you can bet that is going to get scrutiny. Remember VMware's growth has been under pressure for the last several years. So it's been buying companies, dozens of them. It bought AirWatch, bought Heptio, Carbon Black, Nicira, SaltStack, Datrium, Versedo, Bitnami, and on and on and on. Many of these were to pick up engineering teams. Some of them were to drive new revenue. Now this is definitely going to be scrutinized by Broadcom. So that helps explain why Michael Dell would sell VMware. And where does VMware go from here? It's got great core product. It's an iconic name. It's got an awesome ecosystem, fantastic distribution channel, but its growth is slowing. It's got limited developer chops in a world that developers and cloud native is all the rage. It's got a far flung R&D agenda going at war with a lot of different places. And it's increasingly fighting this multi front war with cloud companies, companies like Cisco, IBM Red Hat, et cetera. VMware's kind of becoming a heavy lift. It's a perfect acquisition target for Broadcom and why the street loves this deal. And we titled this Breaking Analysis taming the VMware beast because VMware is a beast. It's ubiquitous. It's an epic software platform. EMC couldn't control it. Dell used it as a piggy bank, but really didn't change its operating model. Broadcom 100% will. Now one of the things that we get excited about is the future of systems architectures. We published a breaking analysis about a year ago, talking about AWS's secret weapon with Nitro and it's Annapurna custom Silicon efforts. Remember it acquired Annapurna for a measly $350 million. And we talked about how there's a new architecture and a new price performance curve emerging in the enterprise, driven by AWS and being followed by Microsoft, Google, Alibaba, a trend toward custom Silicon with the arm based Nitro and which is AWS's hypervisor and Nick strategy, enabling processor diversity with things like Graviton and Trainium and other diverse processors, really diversifying away from x86 and how this leads to much faster product cycles, faster tape out, lower costs. And our premise was that everyone in the data center is going to competes, is going to need a Nitro to be competitive long term. And customers are going to gravitate toward the most economically favorable platform. And as we describe the landscape with this chart, we've updated this for this Breaking Analysis and we'll come back to nitro in a moment. This is a two dimensional graphic with net score or spending momentum on the vertical axis and overlap formally known as market share or presence within the survey, pervasiveness that's on the horizontal axis. And we plot various companies and products and we've inserted VMware's net score breakdown. The granularity in those colored bars on the bottom right. Net score is essentially the green minus the red and a couple points on that. VMware in the latest survey has 6% new adoption. That's that lime green. It's interesting. The question Broadcom is going to ask is, how much does it cost you to acquire that 6% new. 32% of VMware customers in the survey are increasing spending, meaning they're increasing spending by 6% or more. That's the forest green. And the question Broadcom will dig into is what percent of that increased spend (chuckles) you're capturing is profitable spend? Whatever isn't profitable is going to be cut. Now that 52% gray area flat spending that is ripe for the Broadcom picking, that is the fat middle, and those customers are locked and loaded for future rent extraction via perpetual renewals and price increases. Only 8% of customers are spending less, that's the pinkish color and only 3% are defecting, that's the bright red. So very, very sticky profile. Perfect for Broadcom. Now the rest of the chart lays out some of the other competitor names and we've plotted many of the VMware products so you can see where they fit. They're all pretty respectable on the vertical axis, that's spending momentum. But what Broadcom wants is that core ESX vSphere base where we've superimposed the Broadcom logo. Broadcom doesn't care so much about spending momentum. It cares about profitability potential and then momentum. AWS and Azure, they're setting the pace in this business, in the upper right corner. Cisco very huge presence in the data center, as does Intel, they're not in the ETR survey, but we've superimposed them. Now, Intel of course, is in a dog fight within Nvidia, the Arm ecosystem, AMD, don't forget China. You see a Google cloud platform is in there. Oracle is also on the chart as well, somewhat lower on the vertical axis, but it doesn't have that spending momentum, but it has a big presence. And it owns a cloud as we've talked about many times and it's highly differentiated. It's got a strategy that allows it to differentiate from the pack. It's very financially driven. It knows how to extract lifetime value. Safra Catz operates in many ways, similar to what we're seeing from Hock Tan and company, different from a portfolio standpoint. Oracle's got the full stack, et cetera. So it's a different strategy. But very, very financially savvy. You could see IBM and IBM Red Hat in the mix and then Dell and HP. I want to come back to that momentarily to talk about where value is flowing. And then we plotted Nutanix, which with Acropolis could suck up some V tax avoidance business. Now notice Symantec and CA, relatively speaking in the ETR survey, they have horrible spending momentum. As we said, Broadcom doesn't care. Hock Tan is not going for growth at the expense of profitability. So we fully expect VMware to come down on the vertical axis over time and go up on the profit scale. Of course, ETR doesn't measure the profitability here. Now back to Nitro, VMware has this thing called Project Monterey. It's essentially their version of Nitro and will serve as their future architecture diversifying off x86 and accommodating alternative processors. And a much more efficient performance, price in energy consumption curve. Now, one of the things that we've advocated for, we said this about Dell and others, including VMware to take a page out of AWS and start developing custom Silicon to better integrate hardware and software and accelerate multi-cloud or what we call supercloud. That layer above the cloud, not just running on individual clouds. So this is all about efficiency and simplicity to own this space. And we've challenged organizations to do that because otherwise we feel like the cloud guys are just going to have consistently better costs, not necessarily price, but better cost structures, but it begs the question. What happens to Project Monterey? Hock Tan and Broadcom, they don't invest in something that is unproven and doesn't throw off free cash flow. If it's not going to pay off for years to come, they're probably not going to invest in it. And yet Project Monterey could help secure VMware's future in not only the data center, but at the edge and compete more effectively with cloud economics. So we think either Project Monterey is toast or the VMware team will knock on the door of one of Broadcom's 20 plus business units and say, guys, what if we work together with you to develop a version of Monterey that we can use and sell to everyone, it'd be the arms dealer to everyone and be competitive with the cloud and other players out there and create the de facto standard for data center performance and supercloud. I mean, it's not outrageously expensive to develop custom Silicon. Tesla is doing it for example. And Broadcom obviously is capable of doing it. It's got good relationships with semiconductor fabs. But I think this is going to be a tough sell to Broadcom, unless VMware can hide this in plain site and make it profitable fast, like AWS most likely has with Nitro and Graviton. Then Project Monterey and our pipe dream of alternatives to Nitro in the data center could happen but if it can't, it's going to be toast. Or maybe Intel or Nvidia will take it over or maybe the Monterey team will spin out a VMware and do a Pensando like deal and demonstrate the viability of this concept and then Broadcom will buy it back in 10 years. Here's a double click on that previous data that we put in tabular form. It's how the data on that previous slide was plotted. I just want to give you the background data here. So net score spending momentum is the sorted on the left. So it's sorted by net score in the left hand chart, that was the y-axis in the previous data set and then shared and or presence in the data set is the right hand chart. In other words, it's sorted on the right hand chart, right hand table. That right most column is shared and you can see it's sorted top to bottom, and that was the x-axis on the previous chart. The point is not many on the left hand side are above the 40% line. VMware Cloud on AWS is, it's expensive, so it's probably profitable and it's probably a keeper. We'll see about the rest of VMware's portfolio. Like what happens to Tanzu for example. On the right, we drew a red line, just arbitrarily at those companies and products with more than a hundred mentions in the survey, everything but Tanzu from VMware makes that cut. Again, this is no indication of profitability here, and that's what's going to matter to Broadcom. Now let's take a moment to address the question of Broadcom as a software company. What the heck do they know about software, right. Well, they're not dumb over there and they know how to run a business, but there is a strategic rationale to this move beyond just doing portfolios and extracting rents and cutting R&D, et cetera, et cetera. Why, for example, isn't Broadcom going after coming back to Dell or HPE, it could pick up for a lot less than VMware, and they got way more revenue than VMware. Well, it's obvious, software's more profitable of course, and Broadcom wants to move up the stack, but there's a trend going on, which Broadcom is very much in touch with. First, it sells to Dell and HPE and Cisco and all the OEM. so it's not going to disrupt that. But this chart shows that the value is flowing away from traditional servers and storage and networking to two places, merchant Silicon, which itself is morphing. Broadcom... We focus on the left hand side of this chart. Broadcom correctly believes that the world is shifting from a CPU centric center of gravity to a connectivity centric world. We've talked about this on theCUBE a lot. You should listen to Broadcom COO Charlie Kawwas speak about this. It's all that supporting infrastructure around the CPU where value is flowing, including of course, alternative GPUs and XPUs, and NPUs et cetera, that are sucking the value out of the traditional x86 architecture, offloading some of the security and networking and storage functions that traditionally have been done in x86 which are part of the waste right now in the data center. This is that shifting dynamic of Moore's law. Moore's law, not keeping pace. It's slowing down. It's slower relative to some of the combinatorial factors. When you add up in all the CPU and GPU and NPU and accelerators, et cetera. So we've talked about this a lot in Breaking Analysis episodes. So the value is shifting left within that middle circle. And it's shifting left within that left circle toward components, other than CPU, many of which Broadcom supplies. And then you go back to the middle, value is shifting from that middle section, that traditional data center up into hyperscale clouds, and then to the right toward infrastructure software to manage all that equipment in the data center and across clouds. And look Broadcom is an arms dealer. They simply sell to everyone, locking up key vectors of the value chain, cutting costs and raising prices. It's a pretty straightforward strategy, but not for the fate of heart. And Broadcom has become pretty good at it. Let's close with the customer feedback. I spoke with ETRs Eric Bradley this morning. He and I both reached out to VMware customers that we know and got their input. And here's a little snapshot of what they said. I'll just read this. Broadcom will be looking to invest in the core and divest of any underperforming assets, right on. It's just what we were saying. This doesn't bode well for future innovation, this is a CTO at a large travel company. Next comment, we're a Carbon Black customer. VMware didn't seem to interfere with Carbon Black, but now that we're concerned about short term disruption to their tech roadmap and long term, are they going to split and be sold off like Symantec was, this is a CISO at a large hospitality organization. Third comment, I got directly from a VMware practitioner, an IT director at a manufacturing firm. This individual said, moving off VMware would be very difficult for us. We have over 500 applications running on VMware, and it's really easy to manage. We're not going to move those into the cloud and we're worried Broadcom will raise prices and just extract rents. Last comment, we'll share as, Broadcom sees the cloud data center and IoT is their next revenue source. The VMware acquisition provides them immediate virtualization capabilities to support a lightweight IoT offering. Big concern for customers is what technology they will invest in and innovate, and which will be stripped off and sold. Interesting. I asked David Floyer to give me a back of napkin estimate for the following question. I said, David, if you're running mission critical applications on VMware, how much would it increase your operating cost moving those applications into the cloud? Or how much would it save? And he said, Dave, VMware's really easy to run. It can run any application pretty much anywhere, and you don't need an army of people to manage it. All your processes are tied to VMware, you're locked and loaded. Move that into the cloud and your operating cost would double by his estimates. Well, there you have it. Broadcom will pinpoint the optimal profit maximization strategy and raise prices to the point where customers say, you know what, we're still better off staying with VMware. And sadly, for many practitioners there aren't a lot of choices. You could move to the cloud and increase your cost for a lot of your applications. You could do it yourself with say Zen or OpenStack. Good luck with that. You could tap Nutanix. That will definitely work for some applications, but are you going to move your entire estate, your application portfolio to Nutanix? It's not likely. So you're going to pay more for VMware and that's the price you're going to pay for two decades of better IT. So our advice is get out ahead of this, do an application portfolio assessment. If you can move apps to the cloud for less, and you haven't yet, do it, start immediately. Definitely give Nutanix a call, but going to have to be selective as to what you actually can move, forget porting to OpenStack, or do it yourself Hypervisor, don't even go there. And start building new cloud native apps where it makes sense and let the VMware stuff go into manage decline. Let certain apps just die through attrition, shift your development resources to innovation in the cloud and build a brick wall around the stable apps with VMware. As Paul Maritz, the former CEO of VMware said, "We are building the software mainframe". Now marketing guys got a hold of that and said, Paul, stop saying that, but it's true. And with Broadcom's help that day we'll soon be here. That's it for today. Thanks to Stephanie Chan who helps research our topics for Breaking Analysis. Alex Myerson does the production and he also manages the Breaking Analysis podcast. Kristen Martin and Cheryl Knight help get the word out on social and thanks to Rob Hof, who was our editor in chief at siliconangle.com. Remember, these episodes are all available as podcast, wherever you listen, just search Breaking Analysis podcast. Check out ETRs website at etr.ai for all the survey action. We publish a full report every week on wikibon.com and siliconangle.com. You can email me directly at david.vellante@siliconangle.com. You can DM me at DVellante or comment on our LinkedIn posts. This is Dave Vellante for theCUBE Insights powered by ETR. Have a great week, stay safe, be well. And we'll see you next time. (upbeat music)

(bright music) >> Announcer: 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. Of course, such a broad ecosystem in the VMware environment. Been talking a lot, of course, this year, about what's happened in the Cloud Native space. vSphere 7 has Kubernetes coming into the virtualized environment. And one of those key pieces of doing cloud is you need to make sure data protection still works. And, of course, VMware has a long history working with lots of companies. In this segment, we're going to be digging into the VMware, and Dell, also, solution for data protection. So, happy to welcome to the program. First, I have, from VMware, Tom Spoonemore. He is a product line manager for Modern Application Platform with VMware, and welcome back to the program, one of our CUBE alumnis, Efri Nattel-Shay, who is with Dell technologies, Director of Data Protection and Cloud Native apps. Efri, welcome back, Tom, welcome to the program. >> Thank you very much, it's good to be here. >> So, Tom, I kind of teed it up in my intro. VMware, for the longest time, for as long as I can remember, we've really talked about that ecosystem, those joint solutions. I remember, back when we started "theCUBE", in 2010, you'd go there and it would be, oh, there's $15, no, $20, for every dollar that you spend on VMware that the ecosystem kind of pulls along. When VMware started building the VMware Cloud Foundation and the VMware cloud solutions, data protection really went along with it. So, the integrations that they done with vSphere hold them in there as the environment. Tanzu Kubernetes, there's a lot of new pieces. But I think some of those principles have stayed the same. So, why don't you start us off. Tell us a little bit, philosophically, how is VMware treating this space, and how data protection fills into it, and then, Efri, we'll get your take on it, too. >> Yeah, sure, absolutely. So, from the perspective of VMware and the ecosystem, as you say, we want to be very inclusive. We want to bring the ecosystem and our partners along with what we're doing, regardless of what space it is, and in the Modern Applications Platform and Cloud Native tooling, we're very much thinking along the same lines. And as it relates to data protection in specific, Cloud Native is a place where, mainly it's been thought of as a place for stateless applications. but what we're seeing in people's deployments is more and more stateful applications are beginning to move to Kubernetes and into containers. And so the question then becomes, what do you do for data protection of those applications that are deployed into Kubernetes? And so, with Tanzu, and specifically Tanzu Mission Control, we have included a data protection capability, along with the other capabilities that come with Mission Control, that allows you to provide data protection for your fleet of Kubernetes clusters, regardless of which distribution, regardless of which cloud they're running on, and regardless of how many teams you might have running on a particular cluster or set of clusters. And so, for this reason, we have introduced a data protection capability that is focused around our open source project called Velero and Mission Control operates Velero in your clusters from a central UI API and CLI. That allows you to do data protection, initiating schedules of backups, doing restores, and even migration from cloud to cloud, from a single control point. And part of this vision is not only providing an API that we can handle directly with our own Velero-based implementation, but also opening that up to partners. And this is where we're working with Dell, specifically, to be able to provide that single API, but yet have Dell, for instance, with their PowerProtect solution, be able to plug in and be a data protection provider underneath Tanzu Mission Control. And so, that's the work that we're doing together to help satisfy this vision that we have for data protection in the Cloud Native space. >> Yeah, agree 100% with Tom. Like Tom has said, when we looked at customer environments three years ago, people talk mainly about stateless applications, but over time, when more storage solutions, persistent data solutions came along, there came the need to, not only provision the data, but also protect it, and be able to do backups, and restores, and cyber recovery solutions, and disaster recovery, and the whole set of use cases that allow a full life cycle of data along the Cloud Native set of applications, not just a traditional one. And what we've seen, we're talking, obviously, with a lot of customers, joint customers with VMware, customers that use our storage solutions, as well as others, on-prem and in the cloud. And what they have shown, to say, there, is that you have the IT infrastructure people on one hand, which have certain needs, and there is the new set of users, the DevOps people, who are writing applications in a new way, and they need to communicate and they need a solution that fits both of them. So, with VMware, with the community, with Velero, we are introducing a solution that is capable of doing both management for the DevOps people, as well as for the other team infrastructure. And, a year ago, we have talked about this coming up, and now it's really there, and it's doing great. >> Oh, Efri, I'm so glad you brought up some of those organizational issues, because it's not just, oh, we have some new applications, and, of course, we need to do data protection. Can you bring us inside a little bit? Your customers, are they aware of what they need to do? Is it central IT that's coming over and telling the DevOps team, hey, don't forget, security, data protection, still super important. How does that engagement go, and what change does that have for the Dell field and the channel? >> Yeah, I think that the more successful organizations really have that kind of dialogue. So, the developers are not operating in silos. They're not doing things themselves. They do, some of the use cases, they do need to copy data for their own use, but they understand that there are also organizational needs. Someone needs to sign the audit pass, the SLAs are in compliance, the regulations are met. So, all of these things, someone needs to do them. And there is a mutual recognition that there is a role for these people and for these people, for these use cases and for these use cases. >> Yeah, I would agree with that. One of the things that we're seeing, particularly as you think about Kubernetes as a multitenant kind of platform, what we're seeing is that central IT operations still wants to make sure that backups are happening with stateful applications, but more and more they're relying on and providing self-service capabilities to line of business and DevOps, to be able to back up their applications in the way that's best for those applications. It's a recognition of domain expertise for a particular application. So, what we've done with Mission Control is allowed central IT to define policy. And those policies then give the framework, or guidelines, if you will, that then allow the DevOps teams to make the best choices within their own field of expertise and for their own applications. >> Yeah, and what we've seen is some of the organizations really like full control over central IT, and some customers have told us, don't give anything to the developers, but most of them are asking for some self-service capabilities for the developers. But then, who is setting the policy? Who is saying, okay, I have a gold policy data protection? Does it mean I replicate to another side? Does it mean I do longterm retention for a month, or for a year? That is for someone in central IT to set up. So, saying what the policy means, or what it actually is, is the job of a central IT, whereas, this application needs application consistency, and it is of gold policy, that oftentimes is the best knowledge and domain expertise of the developer. >> So, Tom, you mentioned Tanzu Mission Control, which is the management solution. Tanzu is a portfolio. Can you help walk us through the relevant pieces here that are part of this joint solution? >> Yeah, sure. So, Tanzu is really a portfolio of applications, or a portfolio of solutions, as you've said. It's really along three main pillars. It's what we call, build, run and manage. Tanzu Mission Control fills in, along with our Tanzu Observability and Tanzu Service Mesh, in our manage pillar. The build pillar is more along the lines of supporting developing of modern applications, developing and deploying modern applications. So, many of the technologies that have come from our acquisitions of Pivotal, as well as Bitnami, make up that pillar, and these are technologies that are coming to fore, and you'll hear more and more about at this VM world and going forward. Our run pillar is really where you'll find Tanzu Kubernetes Grid. Now, this is our distribution, but it's more than just a distribution of Kubernetes. It's a distribution of Kubernetes, along with all the tools that you would need to be able to deploy modern applications. So, all of these three pillars come together, along with services provided by Pivotal labs, to really give you a full, multifaceted platform for deploying and operating modern applications. >> Great, and Efri, where are there integrations there? How does the storage fit in has been a discussion we've been having for a few years% when it comes to Kubernetes. >> Yeah, basically, PowerProtect integrates with all of these levels that Tom has mentioned, starting with the lowest levels of integration. With the storage, VMware has Cloud Native storage solutions, which allow things like incremental snapshots to be taken from the environment. And we're using this mechanism in order to copy data efficiently from TKG, Tanzu Kubernetes Grid, environment, out of the cluster, into a space-efficient data domain, as a target site. So, that's a storage integration. Then, there is qualification and support for the various run environments that Tom has mentioned, the Tanzu Kubernetes Grid, and Tanzu Kubernetes Grid Integrated, as well as things that we're working with VMware in order to enable protection for what has been called the Project Pacific, which really allows you very sophisticated capabilities of running multiple Kubernetes clusters using the Kubernetes cluster API capabilities. So, you can spin up a cluster very, very quickly by VMware. And then, we can take backups of this environment up to data domain target site. And, finally, working with Tom for tons of amount of time and effort to do the integration between Tanzu Mission Control and PowerProtect. So, allowing cloud, multicloud, multilocation environments to be provisioned and monitoring by Tanzu Mission Control, but also protected using PowerProtect. >> Yeah, so, Tom, we talked about supporting the ecosystem, and it's a much faster cadence now than it was in the past. It used to be, it felt like every other year at VMworld, we got together and talked about the major vSphere release. Of course, in the container, in Kubernetes world, we're having a much faster cadence. So, could you just help us understand, what of this is generally available today? We saw vSphere 7 back in the spring. The update, right ahead of VMworld, that really extended Kubernetes beyond just VCF, to be able to be an all vSphere 7 environment. So, we know some of this is here on the roadmap, so help map this out for us, what's here today from VMware and what the timeline is we expect for all of these pieces we've been discussing. >> Yeah, absolutely. So, Mission Control shipped in March. So we're still relatively new, but as you say, we run Cloud Native ourselves, and so we're releasing new features, new capabilities. literally every week. We have a weekly cadence for release. Our data protection capability was just introduced at the end of June, so it's fairly new, and we are still introducing capabilities, like bring your own storage, doing scheduling of backups, and this kind of thing. You'll see us adding more and more cloud providers. We have been working to open up the platform to make it available to partners. And this is, just generally, with Mission Control, across the board, but specifically, when it comes to Dell, and PowerProtect, the data protection capability, this is something that we are still actively working on, and it is past the architecture stage, but it's probably still a little ways out before we can deliver on it, but we are working on it diligently, and definitely expect to have that in the product, and available, and really providing a basis for integrations with other providers as well. >> Yeah, and in terms of PowerProtect, we have told the audience about a tech preview a year ago, and since then we have released a number of releases. We are having a quarterly cadence. So, it is available for the general consumption for quite some time. Talking about the integration layers that we have mentioned before, we are the first stack to protect VMs and Kubernetes and applications using the same platform, the same UI, the same policies, everything looks the same. And we have recently introduced capabilities such as application consistency for a number of applications. The support for TKG is available for now. And, as Tom has said, we are working on further integrations, such as the integration with Tanzu Mission Control with VMware. >> Wonderful, I want to get a final word from both of you. Efri, we'll start with you. We've got this regular cadence coming up. We know we're only a couple of weeks away from DTWE, the Dell Technology World Experience, where, of course, theCUBE will be there. What should we look for the rest of 2020, or any final comments that you have for customers that might be looking at this environment? >> Sure, I think that, two trends that I'm seeing, and they're just getting stronger over the years. The first thing is multicloud, and multicloud means many things to different people, but, basically, every customer that we are speaking to is talking about, I want to run things on-prem, but I also need to run these workloads in the hyperscaler. And I need to move from one hyperscaler region to another, or between hyperscalers, and they want to run this distribution here, and the other distribution there. And there are many combinations of stacks and Database-as-a-Service and other components of the infrastructure that different developers are using on-prem and in the cloud. So, I expect this to go even further, and solutions like PowerProtect and TKG can help customers to do that job, and, of course, Tanzu Mission Control, to monitor and manage this environment. Secondly, I think that protection is going to follow more the workloads. So, application is no longer the VM. Obviously, it's becoming many different components that are starting to span across locations and across environments. And again, the protection nature of these is going to change according to where and how these workloads are being provisioned. >> Yeah, and I would say the same thing about Mission Control, very much multicloud-focused, Today it's largely an AWS-focused solution. We're changing to add more flexible storage options, more clouds. Azure is something that we'll be doing in the short term, Google Cloud platform and Google Cloud Storage after that, as well as just the ability to use your own on-prem storage for your backup targets. Also, we're going to be focusing on driving more policy-driven backup. So, being able to define policies for groups of clusters, define RTO and RPO for groups of clusters, allowing Mission Control to help determine what the individual backup policy should be for that particular asset. And continuing to work with Dell and other partners to help extend our platform and open it up for other data protection providers. >> Tom and Efri, thanks so much for the updates. Tom, welcome to being a CUBE alumni, and Efri, I'm sure we'll be seeing you in the team, in the near future. >> Thank you. >> Thank you so much. >> Stay with us for more coverage from VMworld 2020. I'm Stu Miniman, and as always, thank you for watching theCUBE. (bright music)

>> From theCUBE studios in Palo Alto in Boston, connecting with thought leaders around the globe, these are cloud native insights. >> Welcome to another episode of Cloud Native Insights. I'm your host Stu Miniman and of course with Cloud Native Insights will really help understand you know, where we have gone from cloud, how we are taking advantage of innovation, a real driver for what happens in the spaces of course developers. You think back to the early days, it was often developers that were grabbing a credit card, using cloud services and then it had to be integrated into what was being done and the rest of the organization saw the large rise of DevOps and all the other pieces around that, that help bring in things like security and finance and the like. Happy to welcome to the program first time guest, William Janssen. He is the CEO of DeltaBlue. Deep in this discussion of cloud native DeltaBlue is a European company helping with continuous deployment across cross cloud providers in the space. William, thanks so much for joining us, nice to see you. >> Glad to be on the show, thank you Stu. >> All right, so one of the reasons I'm glad to have you on is because of some of the early episodes here, you know we were discussing really what cloud native is and what it should be. I had my first interview on the program, Joep Piscaer, who you know, had given the analogy and said when you talked about DevOps, DevOps isn't something you could buy. But it's something that lots of vendors would try to sell you. And we're trying to dispel, lots of companies out there, they're like, "Oh, cloud native, well we support Kubernetes. "And we have this tool and you should buy our cloud native, "you know, A, B, C or D." So, want to start a little first with what you see out there and what you think the ultimate goal and outcome of cloud native should be? >> I think cloud native, to start with your last question, I think cloud native should make life fun again. We have a lot of technical problems, we solve them in technical things. You mentioned Kubernetes but Kubernetes is solving a technical problem. And introducing another technical problem. So what I think cloud native should do is focus on what you're actually good at. So a developer should develop. Someone from the infrastructure, an operator, should focus on their key points and not try to mix it up. So, not Kubernetes, Kubernetes is again introducing another technical issue. Our view on cloud native is that people should have fun again and should be focusing on what they're good at. And so it's not about technology, it's about getting the procedures right and focusing on the things you love to do. And not to talk to the cross border, talk to a lot of developers and solve operational kind of things. That's what we try to solve and that's our view of cloud native. >> Yeah, I'll poke that a little bit because one thing you say, people should do what they're good at. It's really what is important for the business, what do we need to get done? There's often new skills that we need to do. So it's really great if we could just keep doing the same thing we're doing. We know how to do it. We optimize it, we play with all of our geek knobs. But the drumbeat that I hear is, we need to be agile, we need to be able to create new applications. IT needs to be responsive for the business and rather than in the past it was about, building this beautiful stack that we could optimize and build these pieces together. Today, the analogy I hear more is, there's layers out there, there's lots of different tooling, especially if you look at the developer world. There is just too many options out there. So, maybe bring us a little bit as to you know, what DeltaBlue does. How you look at allowing developers to build what they, new things that they need but not be, I guess the word, locked into a certain place or certain technology. >> Yes, I've been on IT for 20 years. So I've seen a lot of things go around. And when we started out with DeltaBlue, the only thing we had in mind is how could we make the lifecycle of applications and all the things you had to do, the government around applications way more easy. Back in the days, we already saw that containerization solved some of the issues. But it solves technical issues. So like when you start coding, you don't need to go to the network card anymore. We took the same approach to our cloud native approach. So we started on the top level. We started with applications in mind. And the things back in the day you had Bitnami already had the option to have a VM or standard installation of an application. So what we see is that nowadays, many developers and many organizations try to focus on that specific part, how to get your code into some kind of under configuration solution. We take that for granted. There are so many great solutions out there, already tried to solve that problem. So instead of reinventing that wheel again, we take that for granted. But we take another approach. We think that if the application is there, you need to test it. You need to take it into production. You want to have several versions of a specific application into the production environment. So what we've tried to solve with our platform is to make that part of the life cycle, let's call it horizontal version of your application lifecycle, not getting an application built or running up different stuff, we take that for granted. We take the horizontal approach. How to get your traditional application from your development environment to your testing, acceptance. That's a different kind of people test your application, security testing before you take it into production. And that should be all be done from a logical point of view. So we built one web interface, a logical portal. And you can simply drag and drop any type of application, not just a more than micro service oriented or Kubernetes based application but any type of application from your acceptance environment to your production environment. That's going to solve the real problem. So now, any business can have 10 different acceptance environments for even your old legacy SAP or your Intershop environment. That's going to get your business value. So going back to your definition of cloud native, getting that kind of abstraction between getting your and code your application and get it get somewhere up and running and all the stuff that's needs to be done from your development environment into the production environment. That's going to add to your business value. That's going to speed up your time to market, that's going to make sure that you have a better cloud quality because now you can test even your legacy application from 10 different points of view and 10 different types of different branches, all in a parallel environment. So, when we started with DeltaBlue, we took a different approach, took the technical stuff for granted, and focus on all the government around applications and the governance that's the thing, I think that's the most important part in the cloud native discussion. >> So governance, especially in Europe, has a lot of importance there. If you could, bring us inside a little bit, customers you're talking to, where they are in this journey. If you've got an example of something you're doing specifically we'd love to hear how that happens in real world. >> Yes we have many different customers but I think one of our best examples, for example is Wunderman Thompson, a big eCommerce party across the globe but also here in the Netherlands. And we made a blueprint of their development environment the way they develop application and the way they host applications. So, now they started a new project, 40 developers go to the new big eCommerce application. In the past, everyone had to install their own Intershop environment on their own laptop, Java, Oracle, that kind of stuff. It took me a day and a half. Since we abstracted that into like a simple cell, like you would do in any serverless environment nowadays, they can now simply click on a button. And since they made their laptop or their development environment part of our platform, they can now simply drag and drop the complete initial environment to the laptop and they can send development in 10 minutes instead of a day and a half. That's just the first step that makes their life easier. But also imagine, we have an application up and running for two, three months and our security patch, we all know the trouble of getting a patch installed in production but also then install it into the acceptance environment, test environment, development environment, all those kind of different versions. With our platform, since we have the application in mind, we can, with simple one simple click of the button, we can propagate that security patch across all the different environments. So from a developer point of view, there's no need to have any kind of knowledge of course they need to configure a port or something like that but no need of knowledge of any type of infrastructure anymore. We have made the same blueprint for the complete development environment. So with a single click of the button, they have a complete detail environment, known over the need to go to their infrastructure to get the service to their operating guys, they have them installed, industrial Nexus, very book of repository, all that kind of stuff. It's all within one blueprint. So again, we think that the application should come first. That should be abstracted, and not abstracted just in a single spin up a container or spinning up a VM. Now, the complete business case, application, complete environment should be up and running with a single click of a button. So now they can start if they have a demo tomorrow, for example, and they want to have a demo setup. With a single click, they have a complete environment up and running, instead of having to wait three weeks, four weeks before they can start coding. And the same comes with a production environment. We now have an intelligent proxy in front of it. So they can have three different versions of the same shot in their production environment. And based on business rules, we can spread the load against the different versions of a business application, eCommerce application. We signed a new contract with New Relic last week. And the next thing we're going to do, and it's going to be there in two weeks, is fit New Relic data, I mean, an eCommerce application is about performance. A longer response time of a page page load time will drop your drop your revenue. So what we're going to do with New Relic is feed it's performance data back into that the intelligent proxy in front of their application. So now they're going to drop the new version of their intershop application on a Thursday evening, they go to sleep. Friday morning, they wake up and from the three versions, and the best performing website will be up and running. That's the kind of intelligence and that's the kind of feedback we can put into our platform since we started with applications in mind first. It's getting better quality, because you can do better testing. I mean, we all want to test, but we never want to wait for those different kinds of setups, they want to have fast development cycles. That kind of flexibility where you do the functional deployment, the functional release, not the technical stuff. What we now see in the market is that most people, when they go to the cloud, try to solve the technical release problems of getting the application up and running in a technical way into the production time, we try to focus on the functional level. >> So, William, being data driven, a very important piece of what you talked about there. What I want to help our audience understand is concerns about if you talk about abstractions, or if you want to be able to live across different environments, is can you take advantage of the full capabilities of the underlying platform? Because, that is, one of the reasons we go to cloud isn't just because it's got limitless compute Pricing comes down. But there's only new features coming out, or I want to be able to go to, a cloud provider and take advantage of some specific feature. So help us understand how I can live across these environments, but still take advantage of those cloud native features and innovations as they come out. >> Great. There are actually two ways. For most alternatives, we also have an alternative component in our platform as well. We have complete marketplace with all kinds of functionality like AWS has, but I can imagine that people want to develop an AWS and get our AWS lambda functions or s3 buckets or that that kind of specific functionality. And going back to the Intershop example, they run their application as a CaaS solution on Azure. So when you went to Azure DevOps, or that kind of specific functionality included, our platform connects over 130 different data centers across the globe and Azure and AWS, and Oviedo Digital Ocean are all part of the huge mix of different cloud providers. For every provider, we have what we call gateway components. We deploy natively, mostly bare metal or equivalents of bare metal within those cloud providers. And we made an abstraction layer on the network layer. So now we can include those kind of specific services like they were part of our platform natively. Because if we would have just build a layer and couldn't use the specific components of an AWS or an Azure or that kind of stuff, we would just be another hosting provider. I haven't liked VMware. So that kind of stuff. We want to and we are aware that we need to include a specific stuff, functionality. And what we do with this with what we call gateway components. So we have AWS, gay components, educators, but also for IBM, or Google specific environment. So we can combine the network of AWS, with our specific network. And that's possible, because we made a complete abstraction layer between the network of the infrastructure provider and our network. So we can complete IP subnets DNS resolver as if it was running on their local environment. And thereby, since we have that abstraction layer, we can even move the workloads on AWS to Azure. And since we have the abstraction layer network, we can even make sure that you don't need to reconfigure your application. I think that's the flexibility that people are looking for. And if they have a specific workload and Azure and it's getting too expensive, for the ones that includes AWS stuff, they want to shift the workload to different kind of cloud providers based on the characteristics of a specific worker, or even if you want to have the cheapest option, you can even use your on premise data center. >> William, do that there absolutely is interest in doing that. One of the barriers to being able to just go between environments is of course that the skills required to do this. So, there's something to be said about, if I use a single provider, I understand how to do it, I understand how to optimize it, I understand the finances of it. And while there may be very similar things in another cloud, or in my own data center, the management tools are different and everything. So how do we overcome, that skill set challenge, between different environments. >> We had a different approach the same as we do it on application level, we took it also in data center level, so we're going to handle most cannot say all because there's always specific components. But from our interface, you can simply go to a specific application and select the type of data center you want to run on your application. And if your application is running on an AWS, you get the gateway components with the components, like an s3 bucket or a lambda or an RDS, based on the data center you're running in. So we took that abstraction layer even on that level. But I got to be honest, I think 80% of our customers is not interested in the data center, they run their application in unless they have specific functionality, and which is not available on our platform, or they have a long running application, or use a specific or they bought a specific application. Otherwise, they don't care. Because from a traditional application, there is no difference between running on Azure or Google Cloud or an IBM cloud or whatever. The main difference is that we can make a guarantee about the SLA. I mean, IBM has a better uptime guarantee. A better performance and a better network compared to let's say, digitalocean. Kind of set this up. But there is a huge difference. But it's more like the guarantee that we can give them. So we have this abstraction layers, and we try to put as many as possible as much as possible into our portal interface. There will no way that we're going to redesign and we work about the complete AWS interface, or we're not going to include 100% of their functionality. That's not possible. We're, small company. AWS is somewhat more developers in place. But the main components and people are asking for like RDS or these kind of specific setups, that's where we have the gateway components for available and they can include them into their own application. But we also going to advise them why they were looking for those specific AWS components. Is it within the application architecture or is it something gauges right? Isn't there a better solution or an other solution? And I think, since we have that objection that one of the biggest benefits is, and what we see our customers also do is we incorporate that data center into our platform. And we have one huge network across all the cloud providers and including their own data center. So in the past, they had to have two different development teams, one specialized in AWS development, with all that kind of specific stuff. And all one development team which had more like a traditional point of view, because their internal system and data which was not allowed to go outside the company or had to stay within the firewall. And since we have now one big network, which is transparent to them, we can make sure that their code for their internal systems stays internal and is running on internal systems. But we could still use some kind of functionality from the outside. We do it all unencrypted today, and we have one big platform available. So with our gateway components, we can make sure that that data and application data is really staying internally. And only is allowed to grow internal data access and that kind of stuff, but still use external functionality or price. But again, I would say 80% of our customers, they don't care because they just want to get rid of the burden. I think going back to what we think cloud native means is just getting rid of the burden. And you shouldn't be concerned about what type of cloud we're actually using. >> Absolutely, William, the goal of infrastructure support, my applications and my data and we want companies to be able to focus on what is important for the business and not get bogged down and certain technical arguments introduction. So William, thank you so much for joining us. Really great to hear about Delta blue. Looking forward to hearing more in the future. >> Thank you. >> I'm Stu Miniman. And look forward to hearing more of your cloud native insights.

(upbeat music) >> Hello, and welcome to The Great Cloud Debate. I'm your moderator Rachel Dines. I'm joined by two debaters today Corey Quinn, Cloud Economist at the Duckbill Group and Stu Miniman, Senior Analyst and Host of theCube. Welcome Corey and Stu, this when you can say hello. >> Hey Rachel, great to talk to you. >> And it's better to talk to me. It's always a pleasure to talk to the fine folks over at CloudHealth at by VMware and less of the pleasure to talk to Stu. >> Smack talk is scheduled for later in the agenda gentlemen, so please keep it to a minimum now to keep us on schedule. So here's how today is going to work. I'm going to introduce a debate topic and assign Corey and Stu each to a side. Remember, their assignments are what I decide and they might not actually match their true feelings about a topic, and it definitely does not represent the feelings of their employer or my employer, importantly. Each debater is going to have two minutes to state their opening arguments, then we'll have rebuttals. And each round you the audience gets to vote of who you think is winning. And at the end of the debate, I'll announce the winner. The prize is bragging rights of course, but then also we're having each debater play to win lunch for their local hospital, which is really exciting. So Stu, which hospital are you playing for? >> Yeah, so Rachel, I'm choosing Brigham Women's Hospital. I get a little bit of a home vote for the Boston audience here and was actually my wife's first job out of school. >> Great hospital. Very, very good. All right, Corey, what about you? >> My neighbor winds up being as specialist in infectious diseases as a doctor, and that was always one of those weird things you learn over a cocktail party until this year became incredibly relevant. So I will absolutely be sending the lunch to his department. >> Wonderful! All right. Well, is everyone ready? Any last words? This is your moment for smack talk. >> I think I'll say that for once we can apply it to a specific technology area. Otherwise, it was insulting his appearance and that's too easy. >> All right, let's get going. The first topic is multicloud. Corey, you'll be arguing that companies are better off standardizing on a single cloud. While Stu, you're going to argue the companies are better off with a multicloud strategy. Corey, you're up first, two minutes on the clock and go. >> All right. As a general rule, picking a single provider and going all in leads to the better outcome. Otherwise, you're trying to build every workload to run seamlessly on other providers on a moment's notice. You don't ever actually do it and all you're giving up in return is the ability to leverage whatever your primary cloud provider is letting you build. Now you're suddenly trying to make two differently behaving load balancers work together in the same way, you're using terraform or as I like to call it multicloud formation in the worst of all possible ways. Because now you're having to only really build on one provider, but all the work you're putting in to make that scale to other providers, you might theoretically want to go to at some point, it slows you down, you're never going to be able to move as quickly trying to build for everyone as you are for one particular provider. And I don't care which provider you pick, you probably care which one you pick, I don't care which one. The point is, you've got to pick what's right for your business. And in almost every case, that means start on a single platform. And if you need to migrate down the road years from now, great, that means A you've survived that long, and B you now have the longevity as a business to understand what migrating looks like. Otherwise you're not able to take care of any of the higher level offerings these providers offer that are even slightly differentiated from each other. And even managed database services behave differently. You've got to become a master of all the different ways these things can fail and unfortunate and displeasing ways. It just leaves you in a position where you're not able to specialize, and of course, makes hiring that much harder. Stu, fight me! >> Tough words there. All right, Stu, your turn. Why are companies better off if they go with a multicloud strategy? Got two minutes? >> Yeah, well first of all Corey, I'm really glad that I didn't have to whip out the AWS guidelines, you were not sticking strictly to it and saying that you could not use the words multicloud, cross-cloud, any cloud or every cloud so thank you for saving me that argument. But I want you to kind of come into the real world a little bit. We want access to innovation, we want flexibility, and well, we used to say I would have loved to have a single provider, in the real world we understand that people end up using multiple solutions. If you look at the AI world today, there's not a provider that is a clear leader in every environment that I have. So there's a reason why I might want to use a lot of clouds. Most companies I talked to, Corey, they still have some of their own servers. They're working in a data center, we've seen huge explosion in the service provider world connecting to multiple clouds. So well, a couple of years ago, multicloud was a complete mess. Now, it's only a little bit of a mess, Corey. So absolutely, there's work that we need to do as an industry to make these solutions better. I've been pining for a couple years to say that multicloud needs to be stronger than the sum of its pieces. And we might not yet be there but limiting yourself to a single cloud is reducing your access to innovation, it's reducing your flexibility. And when you start looking at things like edge computing and AI, I'm going to need to access services from multiple providers. So single cloud is a lovely ideal, but in the real world, we understand that teams come with certain skill sets. We end up in many industries, we have mergers and acquisitions. And it's not as easy to just rip out all of your cloud, like you would have 20 years ago, if you said, "Oh, well, they have a phone system or a router "that didn't match what our corporate guidelines is." Cloud is what we're doing. There's lots of solutions out there. And therefore, multicloud is the reality today, and will be the reality going forward for many years to come. >> Strong words from you, Stu. Corey, you've got 60 seconds for rebuttal. I mostly agree with what you just said. I think that having different workloads in different clouds makes an awful lot of sense. Data gravity becomes a bit of a bear. But if you acquire a company that's running on a different cloud than the one that you've picked, you'd be ridiculous to view migrating as anything approaching a strategic priority. Now, this also gets into the question of what is cloud? Our G Suite stuff counts as cloud, but no one really views it in that way. Similarly, when you have an AI specific workload, that's great. As long as it isn't you seriously expensive to move data between providers. That workload doesn't need to live in the same place as your marketing website does. I think that the idea of having a specific cloud provider that you go all in on for every use case, well, at some point that leads to ridiculous things like pretending that Amazon WorkDocs has customers, it does not. But for things that matter to your business and looking at specific workloads, I think that you're going to find a primary provider with secondary workloads here and they're scattered elsewhere to be the strategy that people are getting at when they use the word multicloud badly. >> Time's up for you Corey, Stu we've got time for rebuttal and remember, for those of you in the audience, you can vote at any time and who you think is winning this round. Stu, 60 seconds for a rebuttal. >> Yeah, absolutely Corey. Look, you just gave the Andy Jassy of what multicloud should be 70 to 80% goes to a single provider. And it does make sense we know nobody ever said multicloud equals the same amount in multiple environments but you made a clear case as to why multicloud leveraging multi providers is likely what most companies are going to do. So thank you so much for making a clear case as to why multicloud not equal cloud, across multiple providers is the way to go. So thank you for conceding the victory. >> Last Words, Corey. >> If that's what you took from it Stu, I can't get any closer to it than you have. >> All right, let's move on to the next topic then. The next topic is serverless versus containers which technology is going to be used in, let's say, five to 10 years time? And as a reminder, I'm going to assign each of the debaters these topics, their assignments may or may not match their true feelings about this topic, and they definitely don't represent the topics of my employer, CloudHealth by VMware. Stu, you're going to argue for containers. Corey you're going to argue for start serverless. Stu, you're up first. Two minutes on the clock and go. >> All right, so with all respect to my friends in the serverless community, We need to have a reality check as to how things work. We all know that serverless is a ridiculous name because underneath we do need to worry about all of the infrastructure underneath. So containers today are the de facto building block for cloud native architectures, just as the VM defined the ecosystem for an entire generation of solutions. Containers are the way we build things today. It is the way Google has architected their entire solution and underneath it is often something that's used with serverless. So yes, if you're, building an Alexa service, serverless make what's good for you. But for the vast majority of solutions, I need to have flexibility, I need to understand how things work underneath it. We know in IT that it's great when things work, but we need to understand how to fix them when they break. So containerization gets us to that atomic level, really close to having the same thing as the application. And therefore, we saw the millions of users that deploy Docker, we saw the huge wave of container orchestration led by Kubernetes. And the entire ecosystem and millions of customers are now on board with this way of designing and architecting and breaking down the silos between the infrastructure world and the application developer world. So containers, here to stay growing fast. >> All right, Corey, what do you think? Why is serverless the future? >> I think that you're right in that containers are the way you get from where you were to something that runs effectively in a cloud environment. That is why Google is so strongly behind Kubernetes it helps get the entire industry to write code the way that Google might write code. And that's great. But if you're looking at effectively rewriting something from scratch, or building something that new, the idea of not having to think about infrastructure in the traditional sense of being able to just here, take this code and run it in a given provider that takes whatever it is that you need to do and could loose all these other services together, saves an awful lot of time. As that continues to move up the stack towards the idea of no code or low code. And suddenly, you're now able to build these applications in ways that require just a little bit of code that tie together everything else. We're closer than ever to that old trope of the only code you write is business logic. Serverless gives a much clearer shot of getting there, if you can divorce yourself from the past of legacy workloads. Legacy, of course meaning older than 18 months and makes money. >> Stu, do you have a rebuttal, 60 seconds? >> Yeah. So Corey, we've been talking about this Nirvana in many ways. It's the discussion that we had for paths for over a decade now. I want to be able to write my code once not worry about where it lives, and do all this. But sometimes, there's a reason why we keep trying the same thing over and over again, but never reaching it. So serverless is great for some application If you talked about, okay, if you're some brand new webby thing there and I don't want to have to do this team, that's awesome. I've talked to some wonderful people that don't know anything about coding that have built some cool stuff with serverless. But cool stuff isn't what most business runs on, and therefore containerization is, as you said, it's a bridge to where I need to go, it lives in these cloud environments, and it is the present and it is the future. >> Corey, your response. >> I agree that it's the present, I doubt that it's the future in quite the same way. Right now Kubernetes is really scratching a major itch, which is how all of these companies who are moving to public cloud still I can have their infrastructure teams be able to cosplay as cloud providers themselves. And over time, that becomes simpler and I think on some level, you might even see a convergence of things that are container workloads begin to look a lot more like serverless workloads. Remember, we're aiming at something that is five years away in the context of this question. I think that the serverless and container landscape will look very different. The serverless landscape will be bright and exciting and new, whereas unfortunately the container landscape is going to be represented by people like you Stu. >> Hoarse words from Corey. Stu, any last words or rebuttals? >> Yeah, and look Corey absolutely just like we don't really think about the underlying server or VM, we won't think about the containers you won't think about Kubernetes in the future, but, the question is, which technology will be used in five to 10 years, it'll still be there. It will be the fabric of our lives underneath there for containerization. So, that is what we were talking about. Serverless I think will be useful in pockets of places but will not be the predominant technology, five years from now. >> All right, tough to say who won that one? I'm glad I don't have to decide. I hope everyone out there is voting, last chance to vote on this question before we move on to the next. Next topic is cloud wars. I'm going to give a statement and then I'm going to assign each of you a pro or a con, Google will never be an actual contender in the cloud wars always a far third, we're going to have Corey arguing that Google is never going to be an actual contender. And Stu, you're going to argue that Google is eventually going to overtake the top two AWS and Azure. As a constant reminder, I'm assigning these topics, it's my decision and also they don't match the opinions of me, my employer, or likely Stu or Corey. This is all just for fun and games. But I really want to hear what everyone has to say. So Corey, you're up first two minutes. Why is Google never going to be an actual contender and go. >> The biggest problem Google has in the time of cloud is their ability to forecast longer term on anything that isn't their advertising business, and their ability to talk to human beings long enough to meet people where they are. We're replacing their entire culture is what it's going to take to succeed in the time of cloud and with respect, Thomas Kurian is a spectacular leader internally but look at where he's come from. He spent 22 years at Oracle and now has been transplanted into Google. If we take a look at Satya Nadella's cloud transformation at Microsoft, he was able to pull that off as an insider, after having known intimately every aspect of that company, and he grew organically with it and was perfectly positioned to make that change. You can't instill that kind of culture change by dropping someone externally, on top of an organization and expecting anything to go with this magic one day wake up and everything's going to work out super well. Google has a tremendous amount of strengths, and I don't see that providing common denominator cloud computing services to a number of workloads that from a Google perspective are horrifying, is necessarily in their wheelhouse. It feels like their entire focus on this is well, there's money over there. We should go get some of that too. It comes down to the traditional Google lack of focus. >> Stu, rebuttal? Why do you think Google has a shaft? >> Yeah, so first of all, Corey, I think we'd agree Google is a powerhouse in the world today. My background is networking, when they first came out with with Google Cloud, I said, Google has the best network, second to none in the world. They are ubiquitous today. If you talk about the impact they have on the world, Android phones, you mentioned Kubernetes, everybody uses G Suite maps, YouTube, and the like. That does not mean that they are necessarily going to become the clear leader in cloud but, Corey, they've got really, really smart people. If you're not familiar with that talk to them. They'll tell you how smart they are. And they have built phenomenal solutions, who's going to be able to solve, the challenge every day of, true distributed systems, that a global database that can handle the clock down to the atomic level, Google's the one that does that we've all read the white papers on that. They've set the tone for Hadoop, and various solutions that are all over the place, and their secret weapon is not the advertising, of course, that is a big concern for them, but is that if you talk about, the consumer adoption, everyone uses Google. My kids have all had Chromebooks growing up. It isn't their favorite thing, but they get, indoctrinated with Google technology. And as they go out and leverage technologies in the world, Google is one that is known. Google has the strength of technology and a lot of positioning and partnerships to move them forward. Everybody wants a strong ecosystem in cloud, we don't want a single provider. We already discussed this before, but just from a competitive nature standpoint, if there is a clear counterbalance to AWS, I would say that it is Google, not Microsoft, that is positioned to be that clear and opportune. >> Interesting, very interesting Stu. So your argument is the Gen Zers will of ultimately when they come of age become the big Google proponents. Some strong words that as well but they're the better foil to AWS, Corey rebuttal? >> I think that Stu is one t-shirt change away from a pitch perfect reenactment of Charlie Brown. In this case with Google playing the part of Lucy yanking the football away every time. We've seen it with inbox, Google Reader, Google Maps, API pricing, GKE's pricing for control plane. And when your argument comes down to a suddenly Google is going to change their entire nature and become something that it is as proven as constitutionally incapable of being, namely supporting something that its customers want that it doesn't itself enjoy working on. And to the exclusion of being able to get distracted and focused on other things. Even their own conferences called Next because Google is more interested in what they're shipping than what they're building, than what they're currently shipping. I think that it is a fantasy to pretend that that is somehow going to change without a complete cultural transformation, which again, I don't see the seeds being planted for. >> Some sick burns in there Stu, rebuttal? >> Yeah. So the final word that I'll give you on this is, one of the most important pieces of what we need today. And we need to tomorrow is our data. Now, there are some concerns when we talk about Google and data, but Google also has strong strength in data, understanding data, helping customers leverage data. So while I agree to your points about the cultural shift, they have the opportunity to take the services that they have, and enable customers to be able to take their data to move forward to the wonderful world of AI, cloud, edge computing, and all of those pieces and solve the solution with data. >> Strong words there. All right, that's a tough one. Again, I hope you're all out there voting for who you think won that round. Let's move on to the last round before we start hitting the lightning questions. I put a call out on several channels and social media for people to have questions that they want you to debate. And this one comes from Og-AWS Slack member, Angelo. Angelo asks, "What about IBM Cloud?" Stu you're pro, Corey you're con. Let's have Stu you're up first. The question is, what about IBM Cloud? >> All right, so great question, Angelo. I think when you look at the cloud providers, first of all, you have to understand that they're not all playing the same game. We talked about AWS and they are the elephant in the room that moves nimbly as a cheetah. Every other provider plays a little bit of a different game. Google has strength in data. Microsoft, of course, has their, business productivity applications. IBM has a strong legacy. Now, Corey is going to say that they are just legacy and you need to think about them but IBM has strong innovation. They are a player in really what we call chapter two of the cloud. So when we start talking about multicloud, when we start talking about living in many environments, IBM was the first one to partner with VMware for VMware cloud before the mega VMware AWS announcement, there was IBM up on stage and if I remember right, they actually have more VMware customers on IBM Cloud than they do in the AWS cloud. So over my shoulder here, there's of course, the Red Hat $34 billion to bet on that multicloud solution. So as we talk about containerization, and Kubernetes, Red Hat is strongly positioned in open-source, and flexibility. So you really need a company that understands both the infrastructure side and the application side. IBM has database, IBM has infrastructure, IBM has long been the leader in middleware, and therefore IBM has a real chance to be a strong player in this next generation of platforms. Doesn't mean that they're necessarily going to go attack Amazon, they're partnering across the board. So I think you will see a kinder, gentler IBM and they are leveraging open source and Red Hat and I think we've let the dogs out on the IBM solution. >> Indeed. >> So before Corey goes, I feel the need to remind everyone that the views expressed here are not the views of my employer nor myself, nor necessarily of Corey or Stu. I have Corey. >> I haven't even said anything yet. And you're disclaiming what I'm about to say. >> I'm just warning the audience, 'cause I can't wait to hear what you're going to say next. >> Sounds like I have to go for the high score. All right. IBM's best days are behind it. And that is pretty clear. They like to get angry when people talk about how making the jokes about a homogenous looking group of guys in blue suits as being all IBM has to offer. They say that hasn't been true since the '80s. But that was the last time people cared about IBM in any meaningful sense and no one has bothered to update the relevance since then. Now, credit where due, I am seeing an awful lot of promoted tweets from IBM into my timeline, all talking about how amazing their IBM blockchain technology is. And yes, that is absolutely the phrasing of someone who's about to turn it all around and win the game. I don't see it happening. >> Stu, rebuttal? >> Look, Corey, IBM was the company that brought us the UPC code. They understand Mac manufacturing and blockchain actually shows strong presence in supply chain management. So maybe you're not quite aware of some of the industries that IBM is an expert in. So that is one of the big strengths of IBM, they really understand verticals quite well. And, at the IBM things show, I saw a lot in the healthcare world, had very large customers that were leveraging those solutions. So while you might dismiss things when they say, Oh, well, one of the largest telecom providers in India are leveraging OpenStack and you kind of go with them, well, they've got 300 million customers, and they're thrilled with the solution that they're doing with IBM, so it is easy to scoff at them, but IBM is a reliable, trusted provider out there and still very strong financially and by the way, really excited with the new leadership in place there, Arvind Krishna knows product, Jim Whitehurst came from the Red Hat side. So don't be sleeping on IBM. >> Corey, any last words? >> I think that they're subject to massive disruption as soon as they release the AWS 400 mainframe in the cloud. And I think that before we, it's easy to forget this, but before Google was turning off Reader, IBM stopped making the model M buckling spring keyboards. Those things were masterpieces and that was one of the original disappointments that we learned that we can't fall in love with companies, because companies in turn will not love us back. IBM has demonstrated that. Lastly, I think I'm thrilled to be working with IBM is exactly the kind of statement one makes only at gunpoint. >> Hey, Corey, by the way, I think you're spending too much time looking at all titles of AWS services, 'cause you don't know the difference between your mainframe Z series and the AS/400 which of course is heavily pending. >> Also the i series. Oh yes. >> The i series. So you're conflating your system, which still do billions of dollars a year, by the way. >> Oh, absolutely. But that's not we're not seeing new banks launching and then building on top of IBM mainframe technology. I'm not disputing that mainframes were phenomenal. They were, I just don't see them as the future and I don't see a cloud story. >> Only a cloud live your mainframe related smack talk. That's the important thing that we're getting to here. All right, we move-- >> I'm hoping there's an announcement from CloudHealth by VMware that they also will now support mainframe analytics as well as traditional cloud. >> I'll look into that. >> Excellent. >> We're moving on to the lightning rounds. Each debater in this round is only going to get 60 seconds for their opening argument and then 30 seconds for a rebuttal. We're going to hit some really, really big important questions here like this first one, which is who deserves to sit on the Iron Throne at the end of "Game of Thrones?" I've been told that Corey has never seen this TV show so I'm very interested to hear him argue for Sansa. But let's Sansa Stark, let's hear Stu go first with his argument for Jon Snow. Stu one minute on the clock, go. >> All right audience let's hear it from the king of the north first of all. Nothing better than Jon Snow. He made the ultimate sacrifice. He killed his love to save Westeros from clear destruction because Khaleesi had gone mad. So Corey is going to say something like it's time for the women to do this but it was a woman she went mad. She started burning the place down and Jon Snow saved it so it only makes sense that he should have done it. Everyone knows it was a travesty that he was sent back to the Wall, and to just wander the wild. So absolutely Jon Snow vote for King of the North. >> Compelling arguments. Corey, why should Sansa Stark sit on the throne? Never having seen the show I've just heard bits and pieces about it and all involves things like bloody slaughters, for example, the AWS partner Expo right before the keynote is best known as AWS red wedding. We take a look at that across the board and not having seen it, I don't know the answer to this question, but how many of the folks who are in positions of power we're in fact mediocre white dudes and here we have Stu advocating for yet another one. Sure, this is a lightning round of a fun event but yes, we should continue to wind up selecting this mediocre white person has many parallels in terms of power, et cetera, politics, current tech industry as a whole. I think she's right we absolutely should give someone with a look like this a potential opportunity to see what they can do instead. >> Ouch, Stu 30 seconds rebuttal. >> Look, I would just give a call out to the women in the audience and say, don't you want Jon Snow to be king? >> I also think it's quite bold of Corey to say that he looks like Kit Harington. Corey, any last words? >> I think that it sad you think Stu was running for office at this point because he's become everyone's least favorite animal, a panda bear. >> Fire. All right, so on to the next question. This one also very important near and dear to my heart personally, is a hot dog a sandwich. Corey you'll be arguing no, Stu will be arguing yes. I must also add this important disclaimer that these assignments are made by me and might not reflect the actual views of the debaters here so Corey, you're up first. Why is a hot dog not a sandwich? >> Because you'll get punched in the face if you go to a deli of any renown and order a hot dog. That is not what they serve there. They wind up having these famous delicatessen in New York they have different sandwiches named after different celebrities. I shudder to think of the deadly insult that naming a hot dog after a celebrity would be to that not only celebrity in some cases also the hot dog too. If you take a look and you want to get sandwiches for lunch? Sure. What are we having catered for this event? Sandwiches. You show up and you see a hot dog, you're looking around the hot dog to find the rest of the sandwich. Now while it may check all of the boxes for a technical definition of what a sandwich is, as I'm sure Stu will boringly get into, it's not what people expect, there's a matter of checking the actual boxes, and then delivering what customers actually want. It's why you can let your product roadmap be guided by cart by customers or by Gartner but rarely both. >> Wow, that one hurts. Stu, why is the hot dog a sandwich? >> Yeah so like Corey, I'm sorry that you must not have done some decent traveling 'cause I'm glad you brought up the definition because I'm not going to bore you with yes, there's bread and there's meat and there's toppings and everything else like that but there are some phenomenal hot dogs out there. I traveled to Iceland a few years ago, and there's a little hot dog stand out there that's been there for over 40 or 50 years. And it's one of the top 10 culinary experience I put in. And I've been to Michelin star restaurants. You go to Chicago and any local will be absolutely have to try our creation. There are regional hot dogs. There are lots of solutions there and so yeah, of course you don't go to a deli. Of course if you're going to the deli for takeout and you're buying meats, they do sell hot dogs, Corey, it's just not the first thing that you're going to order on the menu. So I think you're underselling the hot dog. Whether you are a child and grew up and like eating nothing more than the mustard or ketchup, wherever you ate on it, or if you're a world traveler, and have tried some of the worst options out there. There are a lot of options for hot dogs so hot dog, sandwich, culinary delight. >> Stu, don't think we didn't hear that pun. I'm not sure if that counts for or against you, but Corey 30 seconds rebuttal. >> In the last question, you were agitating for putting a white guy back in power. Now you're sitting here arguing that, "Oh some of my best friend slash meals or hot dogs." Yeah, I think we see what you're putting down Stu and it's not pretty, it's really not pretty and I think people are just going to start having to ask some very pointed, delicate questions. >> Tough words to hear Stu. Close this out or rebuttal. >> I'm going to take the high road, Rachel and leave that where it stands. >> I think that is smart. All right, next question. Tabs versus spaces. Stu, you're going to argue for tabs, Corey, you're going to argue for spaces just to make this fun. Stu, 60 seconds on the clock, you're up first. Why are tabs the correct approach? >> First of all, my competitor here really isn't into pop culture. So he's probably not familiar with the epic Silicon Valley argument over this discussion. So, Corey, if you could explain the middle of algorithm, we will be quite impressed but since you don't, we'll just have to go with some of the technology first. Looks, developers, we want to make things simple on you. Tabs, they're faster to do they take up less memory. Yes, they aren't quite as particular as using spaces but absolutely, they get the job done and it is important to just, focus on productivity, I believe that the conversation as always, the less code you can write, the better and therefore, if you don't have to focus on exactly how many spaces and you can just simplify with the tabs, you're gona get close enough for most of the job. And it is easier to move forward and focus on the real work rather than some pedantic discussion as to whether one thing is slightly more efficient than the other. >> Great points Stu. Corey, why is your pedantic approach better? >> No one is suggesting you sit there and whack the spacebar four times or eight times you hit the Tab key, but your editor should be reasonably intelligent enough to expand that. At that point, you have now set up a precedent where in other cases, other parts of your codebase you're using spaces because everyone always does. And that winds up in turn, causing a weird dissonance you'll see a bunch of linters throwing issues if you use tabs as a direct result. Now the wrong answer is, of course, and I think Steve will agree with me both in the same line. No one is ever in favor of that. But I also want to argue with Stu over his argument about "Oh, it saves a little bit of space "is the reason one should go with tabs instead." Sorry, that argument said bye bye a long time ago, and that time was the introduction of JavaScript, where it takes many hundreds of Meg's of data to wind up building hello world. Yeah, at that point optimization around small character changes are completely irrelevant. >> Stu, rebuttal? >> Yeah, I didn't know that Corey did not try to defend that he had any idea what Silicon Valley was, or any of the references in there. So Rachel, we might have to avoid any other pop culture references. We know Corey just looks at very specific cloud services and can't have fun with some of the broader themes there. >> You're right my mistake Stu. Corey, any last words? >> It's been suggested that whole middle out seen on the whiteboard was came from a number of conversations I used to have with my co-workers as in people who were sitting in the room with me watching that episode said, Oh my God, I've been in the room while you had this debate with your friend and I will not name here because they at least still strive to remain employable. Yeah, it's, I understand the value in the picking these fights, we could have gone just as easily with vi versus Emacs, AWS versus Azure, or anything else that you really care to pick a fight with. But yeah, this is exactly the kind of pedantic fight that everyone loves to get involved with, which is why I walked a different path and pick other ridiculous arguments. >> Speaking of those ridiculous arguments that brings us to our last debate topic of the day, Corey you are probably best known for your strong feelings about the pronunciation of the acronym for Amazon Machine Image. I will not be saying how I think it is pronounced. We're going to have you argue each. Stu, you're going to argue that the acronym Amazon Machine Image should be pronounced to rhyme with butterfly. Corey, you'll be arguing that it rhymes with mommy. Stu, rhymes with butterfly. Let's hear it, 60 seconds on the clock. >> All right, well, Rachel, first of all, I wish I could go to the videotape because I have clear video evidence from a certain Corey Quinn many times arguing why AMI is the proper way to pronounce this, but it is one of these pedantic arguments, is it GIF or GIF? Sometimes you go back and you say, Okay, well, there's the way that the community did it. And the way that oh wait, the founder said it was a certain way. So the only argument against AMI, Jeff Barr, when he wrote about the history of all of the blogging that he's done from AWS said, I wish when I had launched the service that I pointed out the correct pronunciation, which I won't even deem to talk it because the community has agreed by and large that AMI is the proper way to pronounce it. And boy, the tech industry is rific on this kind of thing. Is it SQL and no SQL and you there's various ways that we butcher these constantly. So AMI, almost everyone agrees and the lead champion for this argument, of course is none other than Corey Quinn. >> Well, unfortunately today Corey needs to argue the opposite. So Corey, why does Amazon Machine Image when pronounce as an acronym rhyme with mommy? >> Because the people who built it at Amazon say that it is and an appeal to authorities generally correct when the folks built this. AWS has said repeatedly that they're willing to be misunderstood for long periods of time. And this is one of those areas in which they have been misunderstood by virtually the entire industry, but they are sticking to their guns and continuing to wind up advocating for AMI as the correct pronunciation. But I'll take it a step further. Let's take a look at the ecosystem companies. Whenever Erica Brescia, who is now the COO and GitHub, but before she wound up there, she was the founder of Bitnami. And whenever I call it Bitn AMI she looks like she is barely successfully restraining herself from punching me right in the mouth for that pronunciation of the company. Clearly, it's Bitnami named after the original source AMI, which is what the proper term pronunciation of the three letter acronym becomes. Fight me Stu. >> Interesting. Interesting argument, Stu 30 seconds, rebuttal. >> Oh, the only thing he can come up with is that, you take the word Bitnami and because it has that we know that things sound very different if you put a prefix or a suffix, if you talk to the Kubernetes founders, Kubernetes should be coop con but the people that run the conference, say it cube con so there are lots of debates between the people that create it and the community. I in general, I'm going to vote with the community most of the time. Corey, last words on this topic 'cause I know you have very strong feelings about it. >> I'm sorry, did Stu just say Kubernetes and its community as bastions of truth when it comes to pronouncing anything correctly? Half of that entire conference is correcting people's pronunciation of Kubernetes, Kubernetes, Kubernetes, Kubernetes and 15 other mispronunciations that they will of course yell at you for but somehow they're right on this one. All right. >> All right, everyone, I hope you've been voting all along for who you think is winning each round, 'cause this has been a tough call. But I would like to say that's a wrap for today. big thank you to our debaters. You've been very good sports, even when I've made you argue for against things that clearly are hurting you deep down inside, we're going to take a quick break and tally all the votes. And we're going to announce a winner up on the Zoom Q and A. So go to the top of your screen, Click on Zoom Q and A to join us and hear the winner announced and also get a couple minutes to chat live with Corey and Stu. Thanks again for attending this session. And thank you again, Corey and Stu. It's been The Great Cloud Debate. All right, so each round I will announce the winner and then we're going to announce the overall winner. Remember that Corey and Stu are playing not just for bragging rights and ownership of all of the internet for the next 24 hours, but also for lunch to be donated to their local hospital. Corey is having lunch donated to the California Pacific Medical Centre. And Stu is having lunch donated to Boston Medical Centre. All right, first up round one multicloud versus monocloud. Stu, you were arguing for multicloud, Corey, you were arguing for one cloud. Stu won that one by 64% of the vote. >> The vendor fix was in. >> Yeah, well, look, CloudHealth started all in AWS by supporting customers across those environments. So and Corey you basically conceded it because we said multicloud does not mean we evenly split things up. So you got to work on those two skills, buddy, 'cause, absolutely you just handed the victory my way. So thank you so much and thank you to the audience for understanding multicloud is where we are today, and unfortunately, it's where we're gonnao be in the future. So as a whole, we're going to try to make it better 'cause it is, as Corey and I both agree, a bit of a mess right now. >> Don't get too cocky. >> One of those days the world is going to catch up with me and realize that ad hominem is not a logical fallacy so much as it is an excellent debating skill. >> Well, yeah, I was going to say, Stu, don't get too cocky because round two serverless versus containers. Stu you argued for containers, Corey you argued for serverless. Corey you won that one with 65, 66 or most percent of the vote. >> You can't fight the future. >> Yeah, and as you know Rachel I'm a big fan of serverless. I've been to the serverless comp, I actually just published an excellent interview with Liberty Mutual and what they're doing with serverless. So love the future, it's got a lot of maturity to deliver on the promise that it has today but containers isn't going anyway or either so. >> So, you're not sad that you lost that one. Got it, good concession speech. Next one up was cloud wars specifically Google. is Google a real contender in the clouds? Stu, you were arguing yes they are. Corey, you were arguing no they aren't. Corey also won this round was 72% of the votes. >> Yeah, it's one of those things where at some point, it's sort of embarrassing if you miss a six inch pot. So it's nice that that didn't happen in this case. >> Yeah, so Corey, is this the last week that we have any competitors to AWS? Is that what we're saying? And we all accept our new overlords. Thank you so much, Corey. >> Well I hope not, my God, I don't know what to be an Amazonian monoculture anymore than I do anyone else. Competition makes all of us better. But again, we're seeing a lot of anti competitive behaviour. For example, took until this year for Microsoft to finally make calculator uninstallable and I trust concerned took a long time to work its way of course. >> Yeah, and Corey, I think everyone is listening to what you've been saying about what Google's doing with Google Meet and forcing that us when we make our pieces there. So definitely there's some things that Google culture, we'd love them to clean up. And that's one of the things that's really held back Google's enterprise budget is that advertised advertising driven culture. So we will see. We are working hand-- >> That was already opted out of Hangouts, how do we fix it? We call it something else that they haven't opted out of yet. >> Hey, but Corey, I know you're looking forward to at least two months of weekly Google live stuff starting this summer. So we'll have a lot of time to talk about google. >> Let's not kid ourselves they're going to cancel it halfway through. (Stu laughs) >> Boys, I thought we didn't have any more smack talk left in you but clearly you do. So, all right, moving on. Next slide. This is the last question that we did in the main part of the debate. IBM Cloud. What about IBM Cloud was the question, Stu, you were pro, Corey you were con. Corey, you won this one again with 62% of the vote and for the main. >> It wasn't just me, IBM Cloud also won. The problem is that competition was oxymoron of the day. >> I don't know Rachel, I thought this one had a real shot as to putting where IBM fits. I thought we had a good discussion there. It seemed like some of the early voting was going my way but it just went otherwise. >> It did. We had some last minute swings in these polls. They were going one direction they rapidly swung another it's a fickle crowd today. So right now we've got Corey with three points Stu with one but really the lightning round anyone's game. They got very close here. The next question, lightning round question one, was "Game of Thrones" who deserves to sit on the Iron Throne? Stu was arguing for Jon Snow, Corey was arguing for Sansa Stark also Corey has never seen Game of Thrones. This was shockingly close with Stu at 51.5% of the vote took the crown on this King of the North Stu. >> Well, I'm thrilled and excited that King of the North pulled things out because it would have been just a complete embarrassment if I lost to Corey on this question. >> It would. >> It was the right answer, and as you said, he had no idea what he's talking about, which, unfortunately is how he is on most of the rest of it. You just don't realize that he doesn't know what he's talking about. 'Cause he uses all those fast words and discussion points. >> Well, thank you for saying the quiet part out loud. Now, I am completely crestfallen as to the results of this question about a thing I've never seen and could not possibly care less about not going in my favor. I will someday managed to get over this. >> I'm glad you can really pull yourself together and keep on going with life, Corey it's inspiring. All right, next question. Was the lightning round question two is a hot dog a sandwich? Stu, you were arguing yes. Corey, you were arguing no. Corey landslide, you won this 75% of the vote. >> It all comes down to customer expectations. >> Yeah. >> Just disappointment. Disappointment. >> All right, next question tabs versus spaces. Another very close one. Stu, what were you arguing for Stu? >> I was voting tabs. >> Tabs, yeah. And Corey, you were arguing spaces. This did not turn out the way I expected. So Stu you lost this by slim margin Corey 53% of the vote. You won with spaces. >> Yep. And I use spaces in my day to day life. So that's a position I can actually believe in. >> See, I thought I was giving you the opposite point of view there. I mistook you for the correct answer, in my opinion, which is tabs. >> Well, it is funnier to stalk me on Twitter and look what I have to there than on GitHub where I just completely commit different kinds of atrocities. So I don't blame you. >> Caught that pun there. All right, the last rounds. Speaking of atrocities, AMI, Amazon Machine Image is it pronounced AMI or AMI? >> I better not have won this one. >> So Stu you were arguing that this is pronounced AMI rhymes with butterfly. Corey, you were arguing that it's pronounced AMI like mommy. Any guesses under who won this? >> It better be Stu. >> It was a 50, 50 split complete tie. So no points to anyone. >> For your complete and utterly failed on this because I should have won in a landslide. My entire argument was based on every discussion you've had on this. So, Corey I think they're just voting for you. So I'm really surprised-- >> I think at this point it shows I'm such a skilled debater that I could have also probably brought you to a standstill taking the position that gravity doesn't exist. >> You're a master of few things, Corey. Usually it's when you were dressed up nicely and I think they like the t-shirt. It's a nice t-shirt but not how we're usually hiding behind the attire. >> Truly >> Well. >> Clothes don't always make a demand. >> Gentlemen, I would like to say overall our winner today with five points is Corey. Congratulations, Corey. >> Thank you very much. It's always a pleasure to mop the floor with you Stu. >> Actually I was going to ask Stu to give the acceptance speech for you, Corey and, Corey, if you could give a few words of concession, >> Oh, that's a different direction. Stu, we'll start with you, I suppose. >> Yeah, well, thank you to the audience. Obviously, you voted for me without really understanding that I don't know what I'm talking about. I'm a loudmouth on Twitter. I just create a bunch of arguments out there. I'm influential for reasons I don't really understand. But once again, thank you for your votes so much. >> Yeah, it's always unfortunate to wind up losing a discussion with someone and you wouldn't consider it losing 'cause most of the time, my entire shtick is that I sit around and talk to people who know what they're talking about. And I look smart just by osmosis sitting next to them. Video has been rough on me. So I was sort of hoping that I'd be able to parlay that into something approaching a victory. But sadly, that hasn't worked out quite so well. This is just yet another production brought to you by theCube which shut down my original idea of calling it a bunch of squares. (Rachael laughs) >> All right, well, on that note, I would like to say thank you both Stu and Corey. I think we can close out officially the debate, but we can all stick around for a couple more minutes in case any fans have questions for either of them or want to get them-- >> Find us a real life? Yeah. >> Yeah, have a quick Zoom fight. So thanks, everyone, for attending. And thank you Stu, thank you Corey. This has been The Great Cloud Debate.

I'd say for me it's called it's really the power of the of the better together you know to me it's nobody's great apart it takes really an ecosystem of players to kind of work together for the customer benefit and the one that we've demonstrated the VMware with NetApp plus VMware has been a powerful one for well well over 17 years and the person they're putting in terms of the joint customers that have a ton of loyalty to both of us and they want us just to work it out so you know whether you're whether your allegiance on one side of the kubernetes community's battle or another or you're on one side of anyone's you know storage choice or another and I think customers want NetApp and VMware to work this out and in como solutions and we've done that and now what we for the second activist to come out will start that tomorrow I mean to me it starts from what the customer would like to do right and what what we're seeing from customers is it's increasingly a multi cloud world right that expands spans private cloud public cloud and Ed you're smiling when I yeah now there's an opportunity yeah but it's a chance for customers right and so if you look at how VMware is trying to help their meso sort of square the circle I think the first piece is this idea of consistent operations right then we have these management tools that you can use to consistently operate those environments whether they're based on a VMware based infrastructure or whether they're based on a native cloud infrastructure right so if you look at our cloud health platform for example it's a great example where that service can help you under get visibility to your cloud spend across different cloud platforms also be store based platforms and can help you reduce that spend over time so that's sort of what we refer to as consistent operations right which can span any any cloud you know my team is responsible for is more in that consistent infrastructure space and that's really all about how do we deliver consistent compute network and storage service that spans on from multiple public clouds an edge so that's really where we're bringing that same VMware cloud foundation stacked all those different environments 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 application are making their intent aware to the network and the intent is becoming aware as the intern becomes aware we networking people know what to do in the Estevan 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 is 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 you know 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 containers because the containers can literally be anywhere you know we're talking about them in the private cloud and in 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 Estevan layer that will get the containers to talk to one another as well as to talk to the clients that are getting access to those application yeah I mean more than McAfee I think you know you you it's sort of you think of the and the the analog analog to cloud Security's data center security where you think of this sort of Amazon Cloud living in an Amazon datacenter and you know how can we protect that you know the data and the egress access into those cloud and you know same technology sort of apply but to your point that you sort of just touched upon its that cloud is not living in isolation right first of all that Amazon Cloud is connected to a whole bunch of you know applications that are still sitting in a data center right so they may not they're potentially not moving the Oracle database today since they're moving some workloads to the cloud right that's what most most companies are hey guess what there's all these endpoints that are connecting they're connecting both the data center and the cloud you're not gonna proxy to the cloud to get to the data center so there is a gateways so to me cloud security can't be an isolated you know sort of technology that companies have to sort of think about now is there is there opportunity to leverage the cloud to manage security better and get visibility in their security environments to do security analytics absolutely so I think to me that's where it's going because security I think has been proven is no longer you know sort of one thing single thing it's just you have to do multiple things every time I go talk to CIA source they tell me they got this technology that I said he made a minute you you have 20 did you cut down any yeah we've cut down a few but you know they just nervous about cutting down too much because if that one piece of software gets Paul so look I mean I think we again we're kind of really evolving our strategic aims you know historically we've looked at how do we really virtual eyes an entire data center right this concept of the software-defined data center really automating all that and driving great speed efficiency increases and now as we've been talking about we're in this world where you kind of STD sees everywhere right on pram and the cloud different public clouds and so how do you really manage across all those and these are the things we've been talking about so the cloud marketplace fits into that whole concept in the sense that now we can get people one place to go to get easy access to both software and solutions from our partners as well as open source solutions and these are things that come from the bitNami acquisition that we recently did so the idea here is that we cannot make it super simple for customers to become aware of the different solutions to draw those consistent operations that exists on top of our platform with our partners and then make it really easy for them to consume those as well I think we've really broaden and expanded our reach over the last ten years it used to be we're known primarily for our sports programming so now we have inclusive education and health programs we're being able to bring together people with and without intellectual disabilities through those mediums so we've divided resources to schools and education and they run Special Olympics programming during the school day so educators wanna have us because we're improving school clamp campuses reducing bullying enhancing social-emotional learning and so the work that we're doing is so so critical with that community then the air if health we have inclusive health so now we've got health and medical professionals that are now providing health screenings for our athletes so some of the the younger volunteers that we get that are there wanting to make a career in in the medical field they're exposed to our population right and so they learn more about their specific health needs so it's really about changing people's attitudes and so this community of supporters volunteers health Vettel's education were really our goal is to change people's attitudes fundamentally worldwide about people with intellectual disabilities and really kind of produce inclusive mindsets we call it really promote understanding and so now that the the road map that was shared in terms of what VMware looks to do to integrate containers into the ESXi platform itself right it's you know managing VMs and containers Nextiva that's perfect in terms of not having customers have to pick or choose between which platform and where you're gonna deploy something allow them to say you can deploy on whichever format you want it runs in the same ecosystem and management and then that trickles down to the again your storage layer so we do a lot of object storage within the container ecosystems today a lot of high-performance objects because you know the the the file sizes of instances or applications is much larger than you know a document file that URI might create online so there's a big need around performance in that space along with again management at scale the whole multi cloud hybrid cloud movement what's going on out at the enterprise your perspective on kind of where we are in that shift if you will or that transformation and and what's what's driving it you know what's what's creating all the bang you get that question a lot right people ask me what inning are we in question you know it's a regular you know I would say a couple years ago you know as people said I don't think that I think the national anthem is still being played kind of thing you know and I think the game has probably started you know but but I still were think for very early innings and you know I think I'd actually bring it up to even a higher level and talk about what's happening in terms of how companies are thinking about digital transformation and it would I what I think is happening is it's becoming a board level priority for companies they can't afford to ignore it you know digital is changing the Commun obey suspended of advantage in most industries around the globe and so they're investing in digital transformation and I think they're going to do that frankly independent of whatever macroeconomic climate we operate in and so and I think you know the big driving force probably you know in digital transformation today the cloud and so and what we're seeing is there's a you know it's a particular architecture of choice that's emerging for customers yep and I think you know you hit the nail on the head networking has changed it's no longer about speeds and feeds it's about availability and simplicity and so you know Dell and VMware I think are uniquely positioned to deliver a level of automation where this stuff just works right I don't need to go and configure these magic boxes individually I want to just write you know a line of code where my infrastructure is built into the CI CD pipeline and then when I deploy a workload it just works I don't need an army of people to go figure that out right and and I think that's the power of what we're working together to unleash so that was pretty dramatic moment of truth when we deployed atrium and we started the imaging process and it was finished and to be honest I thought that is broken but it actually was that fast so gave us a tremendous amount of I mean ability to deploy and manage and do the work during the workday instead of working after hours and what we doing for data protection before date really we use variety of different solutions backups just to tape and variety of services that actually backed up are they still do or know we've given that a lot up the floor of all the legacy stuff it got rid of that did you have to change your processes or what was that like Wow info we have to we have to get rid of a lot of process they were focused on backup focus on a time that it took to manage backup with atrium date reom didn't have the backup from the day one this is something that they designed I think a second year and that was very different to see the company that deals with storage creating such an innovative vision for developing old I mean developing a roadmap that was actually coming true with every iteration of the software deployment so the second tier that we provisioned was the snapshot and the snapshots that were incredibly fast that didn't take a lot of space that was you know give us ability to restore almost instantly gave us a huge amount of you know focus on not focusing and on storage anymore well since we're here at vmworld right you know be immoral has about 70 million work I think it's actually bigger than the public cloud I you correct me if I'm wrong right uh yeah I mean the I look I'm premise way bigger than the public cloud I have no question exactly and and and what's happening of course is faster sorry but the line is blurring between you know what's a public cloud what's a you know hybrid cloud multi-cloud edge and so look our opportunity is to really make all that go away for customers and allow them to choose and express our unique value add in whatever form the customer wants to use it so you've seen us align with all the public clouds you know you're seeing us take steps in the edge we're continuing to improve the on-premise systems you know with project dimension now it's the VMware cloud on Dell EMC that we're managing for you and it's on demand its consumption and it's consumed just like a public cloud I spend about 50 percent of my time talking to these customers so we learn a lot and here are the four big challenges they're facing first is the explosion of data data is just growing so fast Gartner estimates they'll be a hundred and seventy-five zettabytes of data in 2025 if you cram that into iphone so you take two point six trillion iPhones and go to the Sun and back right it's an enormous amount of data second they're worried about ransomware it's not a question of if you'll be attacked it's when you'll be attacked look at what's happening in Texas right now with the 22 municipalities dealing with that what you want in that case is a resilient infrastructure you want to be the ripples to restore from a really good backup copy of data third they want the hybrid multi cloud world just like Pat Gelson juror has been talking about that's what customers want but they want to be able to protect their data wherever it is make it highly available and get insights in their data wherever it's located and then finally they're dealing with this massive growth in government regulations around the world because of this concern about privacy I was in Australia a few weeks ago and one of our customers she was telling me that she deals with 27 different regulatory environments another customer was saying that California Privacy Act will be the death of him and he's based in st. Louis right so our strategy is focused on taking away the complexity and helping the largest companies in the world deal with these challenges and that's why we introduced the enterprise data services platform and that's why we're here at VMworld talking 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 far that way yeah 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 looked down on mr. McNeely I always liked but you know the you know 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 bring together with project Pacific really being able to bridge those two worlds together so you know and if we deliver on this you know I think it is you know that X 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 across the history to the future this is pretty powerful yes so this conference is is I think a refreshing return to form so VMware is as you say this is an operators conference and VMware is for operators it's not for devs there was a period there where cloud was scary and and it was all this cloud native stuff and VMware tried to appeal to this new market and I guess tried to dress up and as something that it really wasn't and it didn't pull it off and we didn't it didn't feel right and now VMware has decided that well no actually this is what VMware is about and no one can be more VMware than VMware so it's returning to being its best self and I think against software they know software they know software so the the addition of putting project hands are in and having kubernetes in there and and it's it's to operate the software so it's it's going to be in there and apps will run on it and they want to have kubernetes baked into vSphere so that now yeah we'll have new app new apps and yeah there might be sass ups for the people who are consuming them but they've got to run somewhere and now we could run them on vmware whether it's on site at the edge could be in the cloud your vmware on AWS steve emotions [Music] you

>> 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. >> Welcome back, I'm Stu Miniman with my co-host, Justin Warren, and this is theCUBE, live from the lobby of Moscone North here in San Francisco. The 10th year we've had theCUBE and happy to bring back two CUBE alums. Which, of course, in 2010 we didn't even have the idea of a CUBE alum, we were just gathering some friends, some industry experts. To my right is Jaspreet Singh, who's the founder and CEO of Druva. Sitting next to him is Kit Colbert, who's the Vice President CTO of the Cloud Platform Business Unit at VMware. Gentleman, thanks so much for joining us. >> Good morning. >> Thanks for having us. >> All right, so Jaspreet, I remember talking to you when Druva was a new company and cloud native wasn't the thing that came to mind when we were talking about it. We've known for a long time how important data is, and protecting that and managing that, of course, is something the industry's been looking at a long time. But give us the update on kind of Druva and you brought along Kit, so we're going to be talking about some of the cool, cloud native multi-cloud modernization type things, how that fits in your world. >> Absolutely. If you think about the world, right? In 1998, say for a start, they would create a whole notion of size and no software and the whole picture, right? Since then applications went in size, then came developer tools which were in size, and now it's all about infrastructure and first your management which is getting to be a cloud native, public cloud orientated size world. To where Druva comes in. As the world gets more and more fragmented, the data gets more and more fragmented. The multiple versions of cloud are different parts of strategy. Data management has to get more and more centralized. Which is where Druva comes in and which is where me and Kit are together. I think as VMware build a strategy for multi-cloud. Pulling the whole VMC approach to multiple versions of public cloud. Druva is a great partner, to sort of bring the data management together. A single control plane to manage multiple versions of cloud deployment on a single plane. >> All right, great so Kit it sounds like VMC is the kind of key component work together. 'cause when I think at Druva, a lot of what I think of is SaaS. And SaaS isn't necessarily the first thing that I think of when I think of VMware, so... >> We're tryin' to get there, tryin' to get there Stu. >> Yeah, no but pull it together as to where your customers intersect. >> Yeah absolutely, so it's a great partnership and definitely really focused on rallying around VMware Cloud and native AWS. And the core idea there was that we could deliver a cloud service to our customers of our VMware infrastructure, right? And we'll become a SaaS company, transforming into that. And that's something that we've been very focused on strategically, right? And so VMware Cloud and AWS is really the first offering. But there's many more coming. So just earlier today we announced the availability of VMware Cloud on Dell EMC. This idea of bringing our cloud service, STDC as a service on premises, to customer data centers, to customer edge locations. And the cool part about it, as Jaspreet mentioned, is that this world is becoming more and more distributed and we're seeing that with just the number of STDCs and how they're proliferating everywhere and you do need that centralization in terms, from a management perspective in order to handle all that diversity. And so, that's the big focus for us, in terms of the infrastructure, kind of just the core compute, source, network but you then have to up-level and say, how do you think about the data? And that's really where this partnership comes in. >> Right, so Jaspreet so if I understand that correctly, what you're trying to do here is to provide one data management method, no matter where the data lives. So, I don't have to go and find one tiny thing for, oh okay, I've got this other weird bit in the corner here, that I need a special, dedicated data protection thing for, 'cause that's always difficult. Data protection is hard enough. I really don't need to have, oh how am I going to deal out of this particular thing? Oh, now I've got to go and get another tool. And learn how to use it, maintain it, keep everyone skilled in it. Well actually, I can just pick Druva and then I've solved that problem. >> That's right. I think we are more forward-looking, than backward-looking. So, what we're doing is, any new application comes into an enterprise. Think about, from a point of view of a new cloud, like a VMC, AWS deployment. If you're deploying, you know, a lot of new edge location or data centers or new cloud services, Druva's a perfect partner to bring data management, along with it. For a legacy application that you always had, you can keep your legacy vendor with you. Where it has a con wall, you can keep them as they remain in your enterprise. Bring Druva for the new applications at hence. All the new workload that are more cloud bound workload, is our core focus, hence the VMC partnership. >> Right, so does that mean I'll be able to use Druva wherever VMC is available? >> That's right. >> Yeah. >> Because you're expanding how many places I can get VMC now, I've noticed. >> Yeah, very exciting. >> That's very interesting >> It is, yeah, and I think that's again, the beauty of the partnership, is that we're doing a ton of work to deliver VMC to more and more locations. We've partnered with AWS, and now we've got global coverage, almost all the regions by the end of this calendar year. And now with VMware Cloud on Dell EMC , we can go wherever the customer is. They essentially give us a street address, and we can deliver hardware there and then operate it remotely and they can take advantage of that. And the cool thing about it, that all comes up to this control plan that we have running in the cloud and this is how we can interact with Druva. They can have a few simple APIs they can manage via us to access all those workloads that are distributed all over the place. >> Think of public cloud. Public cloud is nothing but Amazon's, initially was a concept of Amazon applying retail to IT. You can buy a resource anywhere in the globe at a fixed price point at certain SLA. That's the promise of, public cloud promise of VMC to get same VMware experience wherever you go across the world same price point. Same promise with Druva . The same data you put anywhere, can be managed, predicted end-to-end, same policy, same price point across the globe. >> And people often forget that part of it, that we're technologists. So people like to look at that the speeds and feeds and what does the technology do but there's, when you're running a business is actually a lot more to it and pricing models and things that technologists sometimes find boring. I love a good spreadsheet but something as, a simple pricing model where I can understand it and I know what it's going to do for me, was when I spin up a brand new application and I understand how am I going to manage this over the long term, how am I going to protect it, and what's it going to do for the the ROI on that? And what's that going to look like in three years' time? Not just turning up the brand new project. What is the operational cost of that going to look like? These are the kinds of things that people, I think are starting to get a lot more used to now that they particularly with cloud it's a much more operational model. It's not a build model. It's, yes build is one part of it, but you also need to be able to run and manage it >> And think of what we call the world of two ransomwares. There is a ransomware when you're worried about a data breach or data loss and there's another ransomware we have to, your data production vendor or your hardware vendors say is, you know, give me five years of money up front with the promise to manage the data eventually. So in the public cloud world, it's pay-as-you-go on demand. You need a new application you spin up a new workload in VMC in AWS. You need data protection spin up right there and then, no pre-planning, pre-positioning, architecture reviews needed. >> And I think like, the great thing about Druva and what we're talking about here in this consistency of operations. How you're managing data, really goes into the whole strategy that VMware has around driving consistency across infrastructure as well. I think one of the big value propositions that we can help with is taking a lot of this very heterogeneous infrastructure with different capabilities, different hardware form factors and layering on our virtual infrastructure which simplifies a lot of that and delivering that consistent experience. And of course data management as we said is a key part of that experience. >> Yeah, you mentioned kind of the move of VMware towards being more of a SaaS player and working in those environments. One of the flags along that journey is VMware's always had a robust ecosystem. But in the cloud my understanding is you've released now a VMware Cloud Marketplace. Reminds me a little bit of a certain cloud provider that has a very well-known marketplace. Give us a little bit about it, and Jaspreet'll, of course tell us about the Druva piece of that. >> Yeah, absolutely. We're kind of really evolving our strategic aims. Historically we've looked at how do we really virtualize an entire data center? This concept of the software-defined data center. Really automating all that and driving great speed efficiency increases. And now as we've been talking about, we're in this world where you kind of have STDCs everywhere. On Prem, in the cloud, different public clouds. And so how do you really manage across all those? These are things we've been talking about. So the cloud marketplace fits into that whole concept in the sense that now we can give people one place to go to get easy access to both software and solutions from our partners as well as open source solutions, and these are things that come from the Bitnami acquisition that we recently did. So, the idea here is that we cannot make it super simple for customers to become aware of the different solutions to draw those consistent operations that exists on top of our platform and with our partners and then make it really easy for them to consume those as well >> And Druva's part of it. We were day one launch partner on the marketplace. Marketplace serves predominantly two purposes. One is, the ease of E-commerce, you can drive through a marketplace. Second, is the ease of integration. You have a prepackaged solution, which comes along with it. It's a whole beauty of cloud, exactly as I mentioned. We see cloud beyond technology. It's an E-commerce model most companies should adapt to. And as the part of the progress, our commitment is to be in marketplace day one. Druva is right now number one ISP globabally for AWS. So we understand the whole landscape of how E-commerce gets done on public cloud very very well, and we are super thrilled to be a partnership with VMC on the marketplace, the VMC Marketplace. >> It's another one of those important indicators. I think about VMware's Cloud journey. Cloud isn't a destination, it's not a location. It's a way of doing things-- >> Kit: It's a model, yep. >> So having this this marketplace way of consuming software and becoming far more like as you say, it's STDC, but with that software as a service on Earth. You can have STDC as a service. That's probably too many letters in that. >> We use that internally, yes the STDC, AAS (laughs). >> Seeing those features coming to VMware and the partners that you bring in to that ecosystem. And Stu and I we spoke before, it's like VMware is always been a great partner for everyone in that ecosystem and it does have a real ecosystem and we see it again this year at the show. That you have these partners who come in, and you're finding ways to make it easier for those integrations to happen in a nice, easy to consume way and customers like that. So the enterprise is a heterogeneous environment. If you just do one acquisition and all of a sudden, I've got two different ways of doing the same thing. So being able to have known trusted solutions to do that, where I don't have to spend ages and ages figuring out how to, how do I configure this? I don't actually make this do what I need it to do. It's like I'm trying to solve a customer problem. I'm not trying to build technology for its own sake for most of the customers. I just want something that works, and particular with data protection, I just want it to work. >> The owners aren't producing more back abutments. >> No, which, I don't think it should. it's kind of a shame. I used to be a back out man but we don't need anymore of those >> I think this is the idea. You talked in the beginning about this notion of service delivery and how can we take all these STDC's that we have out there that customers are running, and enhance their value and enhance the value to the customer's business by adding on these value-added services. So, I think that's one of the beauties of cloud marketplace is that they can very easily extend what they, customers can extend what they already have with these additional services. >> Jaspreet, VMware's been going through a lot of change. They've made acquisitions. I saw a number of announcements today, that I don't think I would have seen back in the EMC days of you know, some of the data protection solutions being baked into the platform. Tell us what it means to be a VMware partner today. >> I think it's great to see VMware innovating and making strong progress. I think in this world of constant change it can either be in the front end of, you can never never over-innovate. You can be in the front end of, being in the edge, driving change, driving Innovation, driving chain industry or taking a back seat and then be in HPE. So I think I love to see VMware what they're doing and making all the progress and great to be a partner in this change, in this journey to see as a strong partner. >> Yeah, I mean, we're not standing still and it's funny like. So one of the biggest announcements today in my mind is Project Pacific, this re-architecture of vSphere to building Kubernetes into the fabric of what vSphere is. And it's funny when you start looking at that because I think folks have a concept in their mind, of what vSphere is, right? It's VM-based and I have worked with it in certain ways. It's got a certain API or interface and we're fundamentally changing all that. We're rethinking, as I mentioned how we deliver our STDC's, our customers consume them. And so I think that notion of being at the forefront, we're very committed to that >> Kit, I'm glad you broke it up 'cause I'm still having a little trouble thinking through it. Now on the one hand, every company is going through this, we're going to containerize everything, we're going to make it microservices, every infrastructure component, now has that fundamental building block. Docker had a ripple effect on what happens, similar to what VMware had a decade before. But I look at Project Pacific and I'm like well, when Cloud Foundry was originally created, it was, we want back then we called it Paz, but I want a thin layer, and I don't want to pull VMware along for that necessarily. It might fit underneath it, but it might not. So help us understand as to like, how is this not like, a lock into what, you're going to use vSphere and you're going to have your license agreement with us every year and now you're going to be locked into this because this is your Kubernetes platform. >> Yeah, that's a good question. So look, I actually think it drives more openness because Kubernetes is an open platform and we're integrating that in, and we're leveraging the Kubernetes API. And so, the vSphere will have two northbound APIs, one of which is based on the existing VM-based one and the other one which is Kubernetes. And so partially, it's we're actually opening it up. The cool thing about what we can do with Pacific is that we have what, 300, 400000 customers running vSphere. They have an aggregate around 70 million workloads. We're able to take that massive footprint and move it forward almost overnight by building Kubernetes into vSphere. And so the way I look at it, is this is a huge force multiplier for our customers, this ability to move their fleet of applications forward at basically, zero cost, very little cost. And while leveraging all the tools and technologies, they already have. This is another good thing, that our partnership with Druva as well, is that because the way we've architected this, all the tools that use vSphere today and the vSphere's APIs, those APIs will see the Kubernetes pods and things that are provisioned and those tools can operate on those pods just like they can on VMs. And those things just work out of the box. So like if a customer gets specific and uses Druva, and they start provisioning some pods, into Kubernetes on vSphere, Druva will see those they can manage the data, it's all automatic. And of course, Druva can do extra cool things, like even get deeper integration there. But the point is that we've got, you know thousands of partners again who's out of the box that stuff will work. Now is that lock in? No, I actually think that because people are switching over to Kubernetes, they now have the ability to move that to a different Kubernetes environment if they so see fit. Anyway, so that's my quick answer >> Think about the world. Virtualization is practically free right now. What you pay for is the enterprise, once you pay for abstraction level, remove complexity, make my scale happen, and this is where you pay for the whole VMware stack. When the customer start deploying containers, they haven't seen the complexity they would see at scale. When you see the complexity in management and data plane and insecurity plane, then they would need the ecosystem of providers to solve those complexities at scale but as we're a think if Kubernetes takes off and production application, right now it's mostly dev and test, it goes to a production application, the world would need something which is a much more robust sort of control planes to manage it end-to-end >> Yeah, I mean, we solved a lot of the hard problems around running applications in production. And I think what we're doing with Pacific, is enabling all those cool innovations to work not just for existing apps but for new Kubernetes-based apps as well. >> All right, well Kit and Jaspreet, thank you so much. A lot of new things for everybody to dig into and I always appreciate both of you and your teams are very responsive and dig in. Be looking forward to more blog posts and more podcasts from your team and the like, to go into it more. For Justin Warren, I'm Stu Miniman. We have tons more coverage here at VMworld 2019. Thank you so much for watching theCUBE. (upbeat music)

>> From the Silicon Angle Media office in Boston Massachusetts, it's theCUBE. Now here's your host, Dave Vellante. (upbeat music) >> Hello everybody, this is Dave Vallante with Stu Miniman and we're going to take a look back at ten years of theCUBE at VMworld and look forward to see what's coming next. So, as I say, this is theCUBE's 10th year at VMworld, that's VMworld, of course 2019. And Stu, if you think about the VMware of 2010, when we first started, it's a dramatically different VMware today. Let's look back at 2010. Paul Maritz was running VMware, he set forth the vision of the software mainframe last decade, well, what does that mean, software mainframe? Highly integrated hardware and software that can run any workload, any application. That is the gauntlet that Tucci and Maritz laid down. A lot of people were skeptical. Fast forward 10 years, they've actually achieved that, I mean, essentially, it is the standard operating system, if you will, in the data center, but there's a lot more to the story. But you remember, at the time, Stu, it was a very complex environment. When something went wrong, you needed guys with lab coats to come in a figure out, you know, what was going on, the I/O blender problem, storage was a real bottleneck. So let's talk about that. >> Yeah, Dave, so much. First of all, hard to believe, 10 years, you know, think back to 2010, it was my first time being at VMworld, even though I started working with VMware back in 2002 when it was like, you know, 100, 150 person company. Remember when vMotion first launched. But that first show that we went to, Dave, was in San Francisco, and most people didn't know theCUBE, heck, we were still figuring out exactly what theCUBE will be, and we brought in a bunch of our friends that were doing the CloudCamps in Silicon Valley, and we were talking about cloud. And there was this gap that we saw between, as you said, the challenges we were solving with VMware, which was fixing infrastructure, storage and networking had been broken, and how were we going to make sure that that worked in a virtual environment even better? But there were the early thought leaders that were talking about that future of cloud computing, which, today in 2019, looks like we had a good prediction. And, of course, where VMware is today, we're talking all about cloud. So, so many different eras and pieces and research that we did, you know, hundreds and hundreds of interviews that we've done at that show, it's definitely been one of our flagship shows and one of our favorite for guests and ecosystems and so much that we got to dig into at that event. >> So Tod Nielsen, who was the President and probably COO at the time, talked about the ecosystem. For every dollar spent on a VMware license, $15 was spent on the ecosystem. VMware was a very, even though they were owned by EMC, they were very, sort of, neutral to the ecosystem. You had what we called the storage cartel. It was certainly EMC, you know, but NetApp was right there, IBM, HP, you know, Dell had purchased EqualLogic, HDS was kind of there as well. These companies were the first to get the APIs, you remember, the VASA VAAI. So, we pushed VMware at the time, saying, "Look, you guys got a storage problem." And they said, "Well, we don't have a lot of resources, "we're going to let the ecosystem solve the problem, "here's an API, you guys figure it out." Which they largely did, but it took a long time. The other big thing you had in that 2010 timeframe was storage consolidation. You had the bidding war between Dell and HP, which, ultimately, HP, under Donatelli's leadership, won that bidding war and acquired 3PAR >> Bought 3PAR >> for 2.4, 2.5 billion, it forced Dell to buy Compellent. Subsequently, Isilon was acquired, Data Domain was acquired by EMC. So you had this consolidation of the early 2000s storage startups and then, still, storage was a major problem back then. But the big sea change was, two things happened in 2012. Pat Gelsinger took over as CEO, and VMware acquired Nicira, beat Cisco to the punch. Why did that change everything? >> Yeah, Dave, we talked a lot about storage, and how, you know, the ecosystem was changing this. Nicira, we knew it was a big deal. When I, you know, I talked to my friends that were deep in networking and I talked with Nicira and was majorly impressed with what they were doing. But this heterogeneous, and what now is the multi-cloud environment, networking needs to play a critical role. You see, you know, Cisco has clearly targeted that environment and Nicira had some really smart people and some really fundamental technology underneath that would allow networking to go just beyond the virtual machine where it was before, the vSwitch. So, you know, that expansion, and actually, it took a little while for, you know, the Nicira acquisition to run into NSX and that product to gain maturity, and to gain adoption, but as Pat Gelsinger has said more recently, it is one of the key drivers for VMware, getting them beyond just the hypervisor itself. So, so much is happening, I mean, Dave, I look at the swings as, you know, you said, VMware didn't have enough resources, they were going to let the ecosystem do it. In the early days, it was, I chose a server provider, and, oh yeah, VMware kind of plays in it. So VMware really grew how much control and how much power they had in buying decisions, and we're going through more of that change now, as to, as they're partnering we're going to talk about AWS and Microsoft and Google as those pieces. And Pat driving that ship. The analogy we gave is, could Pat do for VMware what Intel had done for a long time, which is, you have a big ecosystem, and you slowly start eating away at some of that other functionality without alienating that ecosystem. And to Pat's credit, it's actually something that he's done quite well. There's been some ebbs and flows, there's pushback in the community. Those that remember things like the "vTax," when they rolled that out. You know, there's certain features that the rolled into the hypervisor that have had parts of the ecosystem gripe a little bit, but for the most part, VMware is still playing well with the ecosystem, even though, after the Dell acquisition of EMC, you know, we'll talk about this some more, that relationship between Dell and VMware is tighter than it ever was in the EMC days. >> So that led to the Software-Defined Data Center, which was the big, sort of, vision. VMware wanted to do to storage and networking what it had done to compute. And this started to set up the tension between with VMware and Cisco, which, you know, lives on today. The other big mega trend, of course, was flash storage, which was coming into play. In many ways, that whole API gymnastics was a Band-Aid. But the other big piece if it is Pat Gelsinger was much more willing to integrate, you know, some of the EMC technologies, and now Dell technologies, into the VMware sort of stack. >> Right, so Dave, you talked about all of those APIs, Vvols was a huge multi-year initiative that VMware worked on and all of the big storage players were talking about how that would allow them to deeply integrate and make it virtualization-aware storage your so tense we come out on their own and try to do that. But if you look at it, VVols was also what enabled VMware to do vSAN, and that is a little bit of how they can try to erode in some of the storage piece, because vSAN today has the most customers in the hyperconverged infrastructure space, and is keeping to grow, but they still have those storage partnerships. It didn't eliminate it, but it definitely adds some tension. >> Well it is important, because under EMC's ownership it was sort of a let 1,000 flowers bloom sort of strategy, and today you see Jeff Clarke coming in and consolidating the portfolios, saying, "Look, let's let VMware go hard with vSAN." So you're seeing a different type of governance structure, we'll talk about that. 2013 was a big year. That's the year they brought in Sanjay Poonen, they did the AirWatch acquisition, they took on what the industry called VDI, what VMware called EUC, End-User Computing. Citrix was the dominant player in that space, VMware was fumbling, frankly. Sanjay Poonen came in, the AirWatch acquisition, now, VMware is a leader in that space, so that was big. The other big thing in 2013 was, you know, the famous comment by Carl Eschenbach about, you know, if we lose to the book seller, we'll all lose. VMware came out with it's cloud strategy, vCloud Air. I was there with the Wall Street analyst that day listening to Pat explain that and we were talking afterwards to a number of the Wall Street analysts saying, "This really doesn't make a lot of sense." And then they sort of retreated on that, saying that it was going to be an accelerant, and it just was basically a failed cloud strategy. >> And Dave, that 2013 is also when they spun out Cloud Foundry and founded Pivital. So, you know, this is where they took some of the pieces from EMC, the Greenplum, and they took some of the pieces from VMware, Spring and the Cloud Foundation, and put those together. As we speak right now, there was just an SEC Filing that VMware might suck them back in. Where I look at that, back in 2013, there was a huge gap between what VMware was doing on the infrastructure side and what Cloud Foundry was doing on the application modernization standpoint, they had bought the Pivotal Labs piece to help people understand new programming models and everything along those lines. Today, in 2019, if you look at where VMware is going, the changes happening in containerization, the changes happening from the application down, they need to come together. The Achilles heel that I have seen from VMware for a long time is that VMware doesn't have enough a tie to or help build the applications. Microsoft owns the applications, Oracle owns the applications. You know, there are all the ISVs that own the applications, and Pivotal, if they bring that back into VMware it can help, but it made sense at the time to kind of spin that out because it wasn't synergies between them. >> It was what I called at the time a bunch of misfit toys. And so it was largely David Goulden's engineering of what they called The Federation. And now you're seeing some more engineering, financial engineering, of having VMware essentially buy another, you know, Dell Silver Lake asset, which, you know, drove the stock price up 77% in a day that the Dow dropped 800 points. So I guess that works, kind of funny money. The other big trend sort of in that mid-part of this decade, hyperconverged, you know, really hit. Nutanix, who was at one point a strong partner of both VMware and Dell, was sort of hitting its groove swing. Fast forward to 2019, different situation, Nutanix really doesn't have a presence there. You know, people are looking at going beyond hyperconverged. So there's sort of the VMware ecosystem, sort of friendly posture has changed, they point fingers at each other. VMware says, "Well, it's Nutanix's fault." Nutanix will say it's VMware's fault. >> Right, so Dave, I pointed out, the Achilles heel for VMware might be that they don't have the closest tie to the application, but their greatest strength is, really, they are really the data center operating system, if you will. When we wrote out our research on Server SAN was before vSAN had gotten launched. It was where Nutanix, Scale Computing, SimpliVity, you know, Pivot3, and a few others were early in that space, but we stated in our research, if Microsoft and VMware get serious about that space, they can dominate. And we've seen, VMware came in strong, they do work with their partnerships. Of course, Dell, with the VxRail is their largest solution, but all of the other server providers, you know, have offerings and can put those together. And Microsoft, just last year, they kind of rebranded some of the Azure Stack as HCI and they're going strong in that space. So, absolutely, you know, strong presence in the data center platform, and that's what they're extending into their hybrid and multi-cloud offering, the VMware Cloud Solutions. >> So I want to get to some of the trends today, but just real quick, let's go through some of this. So 2015 was the big announcement in the fall where Dell was acquiring EMC, so we entered, really, the Dell era of VMware ownership in 2016. And the other piece that happened, really 2016 in the fall, but it went GA 2017, was the announcement AWS and VMware as the preferred partnership. Yes, AWS had a partnership with IBM, they've subsequently >> VMware had a partnership >> Yeah, sorry, VMware has a partnership with IBM for their cloud, subsequently VMware has done deals with Google and Microsoft, so there's, we now have entered the multi-cloud hybrid world. VMware capitulated on cloud, smart move, cleaned up its cloud strategy, cleaned that AirWatch mess. AWS also capitulated on hybrid. It's a term that they would never use, they don't use it necessarily a lot today, but they recognize that On Prem is a viable portion of the marketplace. And so now we've entered this new era of cloud, hybrid cloud, containers is the other big trend. People said, "Containers are going to really hurt VMware." You know, the jury's still out on that, VMware sort of pushes back on that. >> And Dave, just to put a point on that, you know, everybody, including us, spent a lot of time looking at this VMware Cloud on AWS partnership, and what does it mean, especially, to the parent, you know, Dell? How do they make that environment? And you've pointed out, Dave, that while VMware gets in those environments and gives themselves a very strong cloud strategy, AWS is the key partner, but of course, as you said, Microsoft Azure, Google Cloud, and all the server providers, we have a number of them including CenturyLink and Rackspace that they're partnering with, but we have to wait a little while before Amazon, when they announced their outpost solutions, VMware is a critical software piece, and you've got two flavors of the hardware. You can run the full AWS Stack, just like what they're running in their data center, but the alternative, of course, is VMware software running on Dell hardware. And we think that if VMware hadn't come in with a strong position with Amazon and their 600,000 customers, we're not sure that Amazon would have said, "Oh yeah, hey, you can run that same software stack "that you're running, but run some different hardware." So that's a good place for Dell to get in the environment, it helps kind of close out that story of VMware, Dell, and AWS and how the pieces fit together. >> Yeah, well so, by the way, earlier this week I privately mentioned to a Dell executive that one of the things I thought they should do was fold Pivotal into VMware. By the way, I think they should go further. I think they should look at RSA and Dell Boomi and SecureWorks, make VMware the mothership of software, and then really tie in Dell's hardware to VMware. That seems to me, Stu, the direction that they're going to try to gain an advantage on the balance of the ecosystem. I think VMware now is in a position of strength with, what, 5 or 600,000 customers. It feels like it's less ecosystem friendly than it used to be. >> Yeah, Dave, there's no doubt about it. HPE and IBM, who were two of the main companies that helped with VMware's ascendancy, do a lot of other things beyond VMware. Of course, IBM bought Red Hat, it is a key counterbalance to what VMware is doing in the multi-cloud. And Dave, to your point, absolutely, if you look at Dell's cloud strategy, they're number one offering is VMware, VMware cloud on Dell. Dell as the project dimension piece. All of these pieces do line up. I'll say, some of those pieces, absolutely, I would say, make sense to kind of pull in and shell together. I know one of the reasons they keep the security pieces at arm's length is just, you know, when something goes wrong in the security space, and it's not of the question of if, it's a question of when, they do have that arm's length to be able to keep that out and be able to remediate a little bit when something happens. >> So let's look at some of the things that we're following today. I think one of the big ones is, how will containers effect customer spending on VMware? We know people are concerned about the vTax. We also know that they're concerned about lock-in. And so, containers are this major force. Can VMware make containers a tailwind, or is it a headwind for them? >> So you look at all the acquisitions that they've made lately, Dave, CloudHealth is, from a management standpoint, in the public cloud. Heptio and Bitnami, targeting that cloud native space. Pair that with Cloud Foundry and you see, VMware and Pivotal together trying to go all-in on Kubernetes. So those 600,000 customers, VMware wants to be the group that educates you on containerization, Kubernetes, you know, how to build these new environments. For, you know, a lot of customers, it's attractive for them to just stay. "I have a relationship, "I have an enterprise licensing agreement, "I'm going to stay along with that." The question I would have is, if I want to do something in a modern way, is VMware really the best partner to choose from? Do they have the cost structure? A lot of these environments set up, you know, it's open source base, or I can work with my public cloud providers there, so why would I partner with VMware? Sure, they have a lot of smart people and they have expertise and we have a relationship, but what differentiates VMware, and is it worth paying for that licensing that they have, or will I look at alternatives? But as VMware grows their hybrid and multi-cloud deployments they absolutely are on the short list of, you know, strategic partners for most customers. >> The other big thing that we're watching is multi-cloud. I have said over and over that multi-cloud has largely been a symptom of multi-vendor. It's not necessarily, to date anyway, been a strategy of customers. Having said that, issues around security, governance, compliance have forced organizations and boards to say, "You know what, we need IT more involved, "let's make multi-cloud part of our strategy, "not only for governance and compliance "and making sure it adheres to the corporate edicts, "but also to put the right workload on the right cloud." So having some kind of strategy there is important. Who are the players there? Obviously VMware, I would say, right now, is the favorite because it's coming from a position of strength in the data center. Microsoft with it's software state, Cisco coming at it from a standpoint of network strength. Google, with Anthos, that announcement earlier this year, and, of course, Red Hat with IBM. Who's the company that I didn't mention in that list? >> Well, of course, you can't talk about cloud, Dave, without talking about AWS. So, as you stated before, they don't really want to talk about hybrid, hey, come on, multi-cloud, why would you do this? But any customer that has a multi-cloud environment, they've got AWS. And the VMware-AWS partnership is really interesting to watch. It will be, you know, where will Amazon grow in this environment as they find their customers are using multiple solutions? Amazon has lots of offerings to allow you leverage Kubernetes, but, for the most part, the messaging is still, "We are the best place for you, "if you do everything on us, "you're going to get better pricing "and all of these environments." But as you've said, Dave, we never get down to that homogeneous, you know, one vendor solution. It tends to be, you know, IT has always been this heterogeneous mess and you have different groups that purchase different things for different reasons, and we have not seen, yet, public cloud solving that for a lot of customers. If anything we often have many more silos in the clouds than we had in the data center before. >> Okay. Another big story that we're following, big trend, is the battle for networking. NSX, the software networking component, and then Cisco, who's got a combination of, obviously, hardware and software with ACI. You know, Stu, I got to say, Cisco a very impressive company. You know, 60+% market share, being able to hold that share for a long time. I've seen a lot of companies try to go up against Cisco. You know, the industry's littered with failures. It feels, however, like NSX is a disruptive force that's very hard for Cisco to deal with in a number of dimensions. We talked about multi-cloud, but networking in general. Cisco's still a major player, still, you know, owns the hardware infrastructure, obviously layering in its own software-defined strategy. But that seems to be a source of tension between the two companies. What's the customer perspective? >> Yeah, so first of all, Dave, Cisco, from a hardware perspective, is still going strong. There are some big competitors. Arista has been doing quite well into getting in, especially, a high performance, high speed environments, you know, Jayshree Ullal and that team, you know, very impressive public company that's doing quite well. >> Service providers that do really well there. >> Absolutely, but, absolutely, software is eating the world and it is impacting networking. Even when you look at Cisco's overall strategy, it is in the future. Cisco is not a networking company, they are a software company. The whole DevNet, you know, group that they have there is helping customers modernize, what we were talking about with Pivotal. Cisco is going there and helping customers create those new environments. But from a customer standpoint, they want simplicity. If my VMware is a big piece of my environment, I've probably started using NSX, NSX-T, some of these environments. As I go to my service providers, as I go to multi-cloud, that NSX piece inside my VMware cloud foundation starts to grow. I remember, Dave, a few years back, you know, Pat Gelsinger got up on a stage and was like, "This is the biggest collection of network administrators that we've ever seen!" And everybody's looking around and they're like, "Where? "We're virtualization people. "Oh, wait, just because we've got vNICs and vSwitches "and things like that." It still is a gap between kind of a hardcore networking people and the software state. But just like we see on storage, Dave, it's not like vSAN, despite it's thousands and thousands of customers, it is not the dominant player in storage. It's a big player, it's a great revenue stream, and it is expanding VMware beyond their core vSphere solutions. >> Back to Cisco real quickly. One of the things I'm very impressed with Cisco is the way in which they've developed infrastructures. Code with the DevNet group, how CCIEs are learning Python, and that's a very powerful sort of trend to watch. The other thing we're watching is VMware-AWS. How will it affect spending, you know, near-term, mid-term, long-term? Clearly it's been a momentum, you know, tailwind, for VMware today, but the questions remains, long-term, where will customers place their bets? Where will the spending be? We know that cloud is growing dramatically faster than On Prem, but it appears, at least in the near- to mid-term, for one, two, maybe three more cycles, maybe indefinitely, that the VMware-AWS relationship has been a real positive for VMware. >> Yeah, Dave, I think you stated it really well. When I talked to customers, they were a bit frozen a couple of years ago. "Ah, I know I need to do more in cloud, "but I have this environment, what do I do? "Do I stay with VMware, do I have to make a big change." And what VMware did, is they really opened things up and said, "Look, no, you can embrace cloud, and we're there for you. "We will be there to help be that bridge to the future, "if you will, so take your VMware environment, "do VMware cloud in lots of places, "and we will enable that." What we know today, the stat that we hear all the time, the old 80/20 we used to talk about was 80% keeping the lights on, now the 80% we hear about is, there's only 20% of workloads that are in public cloud today. It doesn't mean that that other 80% is going to flip overnight, but if you look over the next five to ten years, it could be a flip from 80/20 to 20/80. And as that shift happens, how much of that estate will stay under VMware licenses? Because the day after AWS made the announcement of VMware cloud on AWS, they offered some migration services. So if you just want to go on natively on the public cloud, you can do that. And Microsoft, Google, everybody has migration services, so use VMware for what I need to, but I might go more native cloud for some of those other environments. So we know it is going to continue to be a mix. Multi-cloud is what customers are doing today, and multi- and hybrid-cloud is what customers will be doing five years from now. >> The other big question we're watching is Outposts. Will VMware and Outposts get a larger share of wallet as a result of that partnership at the expense of other vendors? And so, remains to be seen, Outposts grabbed a lot of attention, that whole notion of same control plane, same hardware, same software, same data plane On Prem as in the Data Center, kind of like Oracle's same-same approach, but it's seemingly a logical one. Others are responding. Your thoughts on whether or not these two companies will dominate or the industry will respond or an equilibrium. >> Right, so first of all, right, that full same-same full stack has been something we've been talking about now, feels like for 10 years, Dave, with Oracle, IBM had a strategy on that, and you see that, but one of the things with VMware has strong strength. What they have over two decades of experiences on is making sure that I can have a software stack that can actually live in heterogeneous environments. So in the future, if we talk about if Kubernetes allows me to live in a multi-cloud environment, VMware might be able to give me some flexibility so that I can move from one hardware stack to another as I move from data centers to service providers to public clouds. So, absolutely, you know, one to watch. And VMware is smart. Amazon might be their number one partner, but they're lining up everywhere. When you see Sanjay Poonen up on stage with Thomas Kurian at Google Cloud talking about how Anthos in your data center very much requires VMware. You see Sachi Nodella up on stage talking about these kind of VMware partnerships. VMware is going to make sure that they live in all of these environments, just like they lived on all of the servers in the data center in the past. >> The other last two pieces that I want to touch on, and they're related is, as a result of Dell's ownership of VMware, are customers going to spend more with Dell? And it's clear that Dell is architecting a very tight relationship. You can see, first of all, Michael Dell putting Jeff Clarke in charge of everything Dell was brilliant, because, in a way, you know, Pat was kind of elevated as this superstar. And Michael Dell is the founder, and he's the leader of the company. So basically what he's created is this team of rivals. Now, you know, Jeff and Pat, they've worked together for decades, but very interesting. We saw them up on stage together, you know, last year, well I guess at Dell Technologies World, it was kind of awkward, but so, I love it. I love that tension of, It's very clear to me that Dell wants to integrate more tightly with VMware. It's the clear strategy, and they don't really care at this point if it's at the expense of the ecosystem. Let the ecosystem figure it out themselves. So that's one thing we're watching. Related to that is long-term, are customers going to spend more of their VMware dollars in the public cloud? Come back to Dell for a second. To me, AWS is by far the number one competitor of Dell, you know, that shift to the cloud. Clearly they've got other competitors, you know, NetApp, Huawei, you know, on and on and on, but AWS is the big one. How will cloud spending effect both Dell and AWS long-term? The numbers right now suggest that cloud's going to keep growing, $35, $40 billion run-rate company growing at 40% a year, whereas On Prem stuff's growing, you know, at best, single digits. So that trend really does favor the cloud guys. I talked to a Gartner analyst who tracks all this stuff. I said, "Can AWS continue to grow? It's so big." He said, "There's no reason, they can't stop. "The market's enormous." I tend to agree, what are your thoughts? >> Yeah, first of all, on the AWS, absolutely, I agree, Dave. They are still, if you look at the overall IT spend, AWS is still a small piece. They have, that lever that they have and the influence they have on the marketplace greatly outweighs the, you know, $30, $31 billion that they're at today, and absolutely they can keep growing. The one point, I think, what we've seen, the best success that Dell is having, it is the Dell and VMware really coming together, product development, go to market, the field is tightly, tightly, tightly alligned. The VxRail was the first real big push, and if they can do the same thing with the vCloud foundation, you know, VMware cloud on Dell hardware, that could be a real tailwind for Dell to try to grow faster as an infrastructure company, to grow more like the software companies or even the cloud companies will. Because we know, when we've run the numbers, Dave, private cloud is going to get a lot of dollars, even as public cloud continues its growth. >> I think the answer comes down to a couple things. Because right now we know that 80% of the spend and stall base is On Prem, 20% in the cloud. We're entering now the cloud 2.0, which introduces hybrid-cloud, On Prem, you know, connecting to clouds, multi-cloud, Kubernetes. So what it comes down to, to me Stu, is to what degree can Dell, VMware, and the ecosystem create that cloud experience in a hybrid world, number one? And number two, how will they be able to compete from a cost-structure standpoint? Dell's cost-structure is better than anybody else's in the On Prem world. I would argue that AWS's cost-structure is better, you know, relative to Dell, but remains to be seen. But really those two things, the cloud experience and the cost-structure, can they hold on, and how long can they hold on to that 80%? >> All right, so Dave here's the question I have for you. What are we talking about when we're talking about Dell plus VMware and even add in Pivotal? It's primarily hardware plus software. Who's the biggest in that multi-cloud space? It's IBM plus Red Hat, which you've stated emphatically, "This is a services play, and IBM has, you know, "just got, you know, services in their DNA, "and that could help supercharge where Red Hat's going "and the modernization." So is that a danger for Dell? If they bring in Pivotal, do they need to really ramp up that services? How do they do that? >> Yeah, I don't think it's a zero sum game, but I also don't think there's, it's five winners. I think that the leader, VMware right now would be my favorite, I think it's going to do very well. I think Red Hat has got, you know, a lot of good market momentum, I think they've got a captive install base, you know, with IBM and its large outsourcing business, and I think they can do pretty well, and I think number three could do okay. I think the other guys struggle. But it's so early, right now, in the hybrid-cloud world and the multi-cloud world, that if I were any one of those five I'd be going hard after it. We know Google's got the dollars, we know Microsoft has the software state, so I can see Microsoft actually doing quite well in that business, and could emerge as the, maybe they're not a long-shot right now, but they could be a, you know, three to one, four to one leader that comes out as the favorite. So, all right, we got to go. Stu, thanks very much for your insights. And thank you for watching and listening. We will be at VMworld 2019. Three days of coverage on theCUBE. Thanks for watching everybody, we'll see you next time. (upbeat music)

>> Woman: From San Fransisco, it's theCUBE, covering VMware Radio 2019. Brought to you by VMware. >> Hey, welcome back to theCUBE's exclusive coverage of VMware's Radio 2019, Lisa Martin with John Furrier, John, we started really bright and early this morning with a very excited Pat Gelsinger. VMware, this is the fifteenth Radio, Radio is R&D innovation offsite. There's about 1800 VMware engineers from lots of B.U.s, very competitive event, very passion driven event, and really just is a... what a great manifestation of the VMware culture and the spirit of innovation. >> This is the best of the best event, and the story around Radio 2019 is really a cumulation of multiple years, as you pointed out, of cultural innovation, engineering. VMware has always been an engineering culture, coming out of Stanford, and from day one they've had that guiding principle. They've also been open and transparent, as we heard on theCUBE interviews today, that has created the culture of community. Open Source dives beautifully into it. And so radio is about that cumulation of the talent. It's the best of the best internally, they submit papers, it's a bottoms-up process, so it's truly a meritocracy from an engineering standpoint. But it's a culture of engineering, and their job is to come up with the future, and what's notable about this event is it's the second year now theCUBE's been here. Last year was the first year they've invited press, so three outlets from the media were allowed, were one of them. And we get exposed, we get to look under the hood, and look at the engine of innovation coming down the road for VMware and their partners. So, it's a super exciting event, Radio is a community within VMware that's now global, 50% outside of North America and the United States, all a bottoms-up, a hive mind, we heard that here. Really successful for VMware to continue this, bringing the press in, get the stories out there, take that transparency and open message from the content. We can share it, we get access to the data, it's a beautiful co-creation formula with theCUBE and VMware. It's a success, and their challenge is can they take it global and extend it. >> And this is day four of Radio19 and you can hear the amount of people that are still here, still passionate, these are projects that they're doing outside of their day jobs. So, the transparency that you talked about, I loved when we were talking with David Tennenhouse about the bottoms-up approach, that this is not a set agenda, we're going to talk about Blockchain, and IOT, and security, this is driven as you said, from thousand-plus submissions of people who want to have papers presented here. >> People don't want to leave, because this is like a kid in the candy store, it's like being intoxicated with technology and there's so much content here. Now that's also a bellwether and a barometer of the company. If R&D is weak, you don't have the innovation. There's companies that don't really invest in R&D, they wouldn't have this kind of mojo or this kind of excitement. But VMware prides themselves on doing 15% R&D, that's way outside the box. The rest is all done within the constraints of what they're doing in the market, so relevance is high, but still room to play and dream the future. And again, I've always believed that you can't dream it up, you can't build it. >> Now of course, VMware, all about, as every business should be, we needed to be developing products and solutions and services that the market needs to solve real-world problems. One of the cool things we learned about today, John, is, from the EMEA CTO John Bagley, is the CTO Ambassador program, the CTOA program, where there are folks, and this is also a competitive program, it's a couple, I think you said a four year tenure to get folks through the program, but being out in the field, in customer sights, learning about all these enterprise organizations, what they actually need, so in that spirit of openness that you talked about, they're bringing in customer information, building and fostering relationships, so that what they're investing in from an R&D standpoint, is going to be able to solve customer problems that they don't even know they have today. >> Yeah, that Champion program, that Ambassador CTO program, that Joe mentioned, what's interesting about VMware, and this is what I love, I admire about the company, as well as companies like AWS and Amazon web services, the people are smart and they think about scaling. So, that's kind of a cliché these days, how does it scale, makes you look smarter if you ask that question, but VMware actually thinks about how to scale, and so, the problem that they had was, they had these field CTOs that were out evangelizing with customers half the time, and doing internal real CTO work around architecture with the teams to build great stuff and move that to market, they couldn't scale. So they used their community of their own ecosystem to find people to come in and replicate. You heard Joe Bagley, "I had to be Steve Herrod," cause he can't be everywhere. That's the mindset of this culture, and I think they have real opportunity to crush it at Open Source, they have a real opportunity to take the Radio culture, and superimpose that in as a new way to do work, new way to create distributed, decentralized teams, and ultimately better software, and at the end of the day, they have to attract great engineers and keep them, work on hard problems, because, Pat's ambitious. And we know Pat. What he says, and what's real, they're all catching up to Pat. Pat has this great vision and he's nailing it, but the engineers got to build what Pat says they got to do. When he says "I'm abstracting away Kubernetes, as an abstraction layer," yeah that sounds simple, but it's really hard to do. >> Absolutely, and I want to get your perspective too, on this, not just the culture of innovation, that you talked about, that VMware has had for a very long time, but also in the spirit of VMware leveraging their innovation programs like Radio, to attract and retain this high quality talent, from your perspective, how does a conference like this, which is kind of academic in nature, it's kind of like a science fair for engineers, how does it differ from some of the other companies, like a Google that say "we have innovation programs." In your perspective, how is this different? >> Well, Google actually is fairly similar in the sense that they came out of Stanford, they have that kind of ethos of academic. Facebook is exactly the opposite, he wants to be Bill Gates, and be like Microsoft, as I was saying the other day. Google's internal stuff is pretty strong, they don't externalize it, and that's why Google Cloud's having such a hard time gaining market shares, that they're not good on the external game. Their thing is the SAS offering, it's all programmable. They're awesome at technology, but they're not good at externalizing it. So, I think Google's struggle is not a lot of internal to external translation. What Radio has done successfully, and we heard a little bit here, was they took it from the Palo Alto bubble, which Google lives in, and they've extended it beyond to the rest of the world, so 50% of the Radio attendees here are from outside the United States. So what they got right is, they've actually externalized it better, they're allowing press to come in, the storytelling that we're doing, that's going on, the collaboration here, is about people collaborating, that's why this successful. And it a world where everything's open, and information's freely available, there's a an audience for "high end," tech nerd activity. This is, this meets the high bar of the geeks of the best of the best, and so why isn't it being covered? Well, it is. We are here. >> You're right, we are here. And also, if you look at, it's one thing for companies to have innovative cultures, but it's another thing, some of the key elements that really can catalyze innovation are partnerships, diversity, that come to mind, both of which VMware does very, very well. Big foci on partnerships, which we've seen and heard about here as well, as well as, not just diversity and gender and things, but also thought diversity, and how groups from completely disparate business units can come together, either organically, before Radio, or even probably, can you imagine the hallway conversations that are going on here? Where suddenly, these different ideas are coming together. Partnerships and diversity are really catalysts for VMware's innovation- >> Well that's a great point, one of the first, on the partnership side, clearly a catalyst, because of multi-cloud and cloud native, seeing that. Diversity is a homerun for them, because they are a diverse culture, but look, how many women are here? Not many, I mean still, more than some, still a lot more work to do. But diversity of opinion, the inclusion that VMware has, they're a very inclusive company. So, it's not like, I just don't think there's enough population of women, in my opinion, that are in the community. But they're inclusive, there's different people with different backgrounds, different technical backgrounds, so from so from a quote "diversity" skill set, it's a melting pot. You've got people talking about carbon fiber, sustainability, to kubernetes, all kind of coming together. So I think diversity's a real strength for them. >> So we heard, I know you had a really, really intriguing Blockchain conversation today. We talked a lot about some of those emerging technologies, Vmworld 2019, which theCUBE will be at, for, I believe the tenth year, it's just around the corner. What excites you about some of the things you heard today that you think we might hear more about in August? >> What excited me about VMworld is what Pat Gelsinger said off camera, that it's going to be a ton of news, a ton of activity, and I think if you look at what VMware's doing, again, like I said, Pat Gelsinger's got an amazing vision, and I think he's cleared the runway, or sailed away from the icebergs. VMware's in a really good market position right now. They have great growth going on, and, look, the organic innovation here at Radio, amazing. Content's solid, people are still buzzing for it, they could probably stay here for a week, two weeks. Acquisitions, CloudHealth, Bitnami, again, two smart acquisitions, they're making smart deals, the ecosystem's evolving, it's a new VMware. So I think Vmworld is going to be, have a spring to its step this year, I think you'll see a lot of action, they'll be two CUBE sets again this year, it's going to be a different company next ten years, VMWare, than it was the past ten years. >> Well, I'm excited to be there with theCUBE, two sets as you mentioned, my interest is certainly heightened after some of the things we heard today. John, as always, I had a blast co-hosting with you. You got some awesome swag to go home with. Until next time, right? >> Yeah. >> All right, for John Furrier, I'm Lisa Martin, you've been watching our exclusive coverage of VMware Radio2019 from San Fransisco. Thanks for watching.

>> Narrator: From San Francisco, its theCUBE. Covering VMware Radio 2019. Brought to you by VMware. >> Welcome to theCUBE, from San Francisco at the VMware Radio 2019 Event. I am Lisa Martin with John Furrier, welcoming back one of our distinguished CUBE alumni, VMware CTO Ray O'Farrell. Ray, welcome back to theCUBE. >> Thank you, very happy to be here. >> This is the fifteenth annual Radio R and D. >> Yes >> Innovation offsite. >> Correct. >> Really competitive there's about eighteen-hundred engineers here, Over a thousand different projects submitted. >> Yes. >> Only about 15 to 20 percent may be selected to be featured here. >> Correct. >> This is the third day or so, talk to us about some of the projects that really caught your attention as really innovative, that really kind of embody the VMware culture of innovation. >> Okay, so the event is an internal event, and, so, but are treated very much in the same way as you would, you know, a more formal, people submitting papers, being peer reviewed and then as you say. A small number of them make it through to the poster sessions or the presentations here. If you look at the broad swat that come in initially, they are very broad, covering everything from technologies that VMware has a lot of focus on whether that's kubernetes virtualization and so on, but also some that are, you know, for the field like virtual reality, augmented reality. You also get quite a few projects which are, fall into how can we be better as a company, So better ways of, if we developed our software using this technology or this approach we'd see better efficiency or ways of testing in new and interesting ways. And I also, for the first time, I think saw a few projects which were more around, less around the technology and more around ways of working together. How can we build teams that work better globally. There's quite a few poster sessions around here about even how to manage and increase the inclusiveness of your team, right? So you're seeing it beyond the technology and instead, how do we as a company become more successful. >> I think that Virtual first is an interesting dynamic, we call it Virtual first because no one has actually built technology for fully virtual teams. >> Yes. >> It's always been kind of collaboration bolted onto pre-existing on premise activity. >> Yeah yeah its a, so our R&D teams, as most R&D teams you're going to see these days are going to be pretty distributed, you are going to have people working from home, you're going to have people in remote sites, you're going to have many project teams, where the actual project itself, right down to the smallest team of ten to fifteen people may well be distributed, so what you got is very core pieces of code being done by teams who are acting remotely. Now, when you think about it, as we work with more and more open source, you're seeing the exact same thing and like the open source community has worked very well in terms of how do you run those projects and so we get to learn from that and we've actually created an office for open source, open source program office, and a lot of what we're trying to figure is how do we make sure to be able to build and leverage that innovation across multiple teams. >> Well Ray, we want to thank you because I know Ray has been around for a while but this is the second year where presses select presses. >> Correct. >> To be invited to get access to some of the projects so we really appreciate that. >> Great idea. >> As CTO of VMware you got to look at the landscape and just look at the organic innovation inside, bring the acquisitions in, and then bring it through to the company architecture. What's, Where's the intersection point on the organic to the CTO, architecture map because you got a lot of great business model going on now, the cloud's looking good. Cloud foundation, yet the Telco business booming, where is the action on the business side, where is this come in, where's the action happening? on the technical business side. >> Yeah on the technical side, what we're seeing is well you've mentioned two questions in there, one is about the innovation and what we will do, how do we fit acquisitions and so on into that mix, we have a fairly formal, I guess, innovation program if I could put it that way. Which basically focuses on what do we do to make sure that we have a really strong culture of innovation as the company, and this event is one of those things. It's not just a few days event, that lead up to it, the lead off from it and so on, that really is focus on make sure we have a culture of innovation in the company. We can create new products, new features as needed, from that. But we also recognize that some of those innovations are going to come from partnerships and from acquisitions, either from partnerships with an Open-source community or in the case of, you saw yesterday, we made an acquisition of a company, Bitnami, which is part of the broader story of us being focused on cloud native applications, what is the best way to be able to, you know, manage that new type of development, container based, kubernetes based and so on. So we're open to wherever that innovation comes from, In fact, that's one of the things I really like about the company. You know, we will look at all the possibilities. And sometimes, you know, as you saw with even some of the partnerships we struck in the last year, you got to be creative. >> So I got to ask you about 5G, one of the things that we're seeing is a lot of hype around 5G, I mean, I was in Vegas, they said 5G LTAE. (laughs) >> Yes. >> E 5GE evolution it wasn't even real 5G. So there's some skepticism, but certainly it's a catalyst. How is 5G impacting your business opportunity in the industry? >> So the Telco industry in general was not particularly virtualized if you go back you know, about two years or three years ago. So one of the key things as people as Telco's are building out, you know, to deal with the 5G infrastructure, there're also saying okay what do I need to build, do I use the way I used to do it? And more and more are saying hey, I should be able to use virtualization, why can I not leverage that same technology which revolutionized Cloud in the data center. So we're seeing some very good business in that space, much of it is what you call the Telco Core, the you know, core infrastructure before you get to the radio networks themselves, but we're also beginning to see even some of that beginning to move out to the radio networks. >> John: Virtualization or software, or both? >> Well virtualization even in fact, that MobileWorld Congress in February I guess, we did some demos of some pretty advanced technologies around network slicing where you're essentially beginning to virtualize the network all the way from the radio network back into the data center itself. >> And the Telco's are certainly from a business that already have been struggling for decades, trying to figure out what that over the top, what their business model could be, will this help them? >> Yeah, well any time, our experience is that anytime you turn something into a flexible software model within that agility within that flexibility you get to do a whole ton of advantages, because you're able to update, you're able to modify, so it's all around flexibility. And everybody talks about you know, how agile you need to be, well, virtualization software, moving into a more software defined model really helps with that. >> Let's talk about, back to Radio 2019, the R and D innovation offsite Radio. Let's talk about customers, how do customer influence projects say from last year to what some of the engineers put together, are these engineers that are having a lot of interactions with customers, what is that influence that customers deliver to VMware's culture of innovation? >> Yeah, it's rather interesting, with more and more we have customers who come to us and actually are asking the question, not necessarily about products, but about the culture of innovation, a question around how do they repeat that or can they learn something from us, and we learn from them too, but it's interesting that the question that has begin to come up more and more as these customers realize we must be agile, we must innovate or else someone is going to get them, from a competitive point of view. They're trying to understand what we do in that space, so that's one aspect of it. In terms of the projects, and what you see here, we do have our professional services organization here, we do have our customer support organization, we do have a lot of our CTO's, a lot of these projects come from offices of the CTO, they all spend a ton of time with customers. We also do make sure for the most part that we get our senior engineers to have an opportunity to go out and visit customers or when customers come on site, that we will have those discussions. So there's a lot of customer input into the mix, where you actually see it showing out or where you should see it begin to appearing more and more, there's a lot of projects here that are deeply systems projects. You'll also find a lot though around pretty basic customer satisfaction things, like user interfaces, ease of licensing all those types of things. So there's a good balance between the two. >> You know one of the things you guys are really doing well in the market place, obviously with the cloud decision with AWS that was a great message to both your field, customer base, how cloud is going to evolve, then cloud foundation, now you got the edge of the network developing, but the software defined data center NSX is doing well. As you start to get into the networking side because the pitch we heard at Dell technologies world was, don't look down, look up the stack. That's where kubernetes is and where the action is on the abstraction layer. There's still a lot of work to do with the networking and security piece of it. >> Correct. >> Where's the innovation angle there, what are the dots to connect on the networking and security side. >> I think probably the biggest focus is on security, almost every customer as they're becoming completely dependent on digital infrastructure just to get there work done. You know like, everything from a farmer to a hospital, they're all digital now, right? Security pops up over and over again. The key products we have in that space are things like, obviously NSX has a large security component to it, but also app defense and some of the projects we do there. So I think security is probably one of the key areas we see that focus. In some ways, what we're seeing is customers coming to us and saying, I want to be able to worry about my applications, can you somehow figure out how to make the IS and the virtualized infrastructure and the security as policy-driven, as automated as possible. And that's where we're focusing. >> You know, one of the things I see as a trend, obviously a student would love, any man would love to be also talking about is the hyper-converged HDI (mumbles) infrastructure really was a tell sign to what customers want, they want to converge everything into an abstraction. >> Correct. >> Into software model, Cloud's hyper-converging. Cloud's is also another. >> Correct. >> Multi-cloud kind of objective. So this notion of consolidating. >> Yeah. >> And kind of creating abstraction is a trend. >> It is, I actually think its really a decision by most customers to say where do I need to focus all of my bandwidth to be successful, and they're saying I want to focus on the layer which is specific to my company. The applications, my customer relations, please somebody help me with all the other stuff. And that's cloud hyper-converge infrastructure VMware. >> John: Do you feel you got like VMware's positioned well in that area? >> I do, I think that in the end, I think we have an interesting blend of what I sometimes use the word agnost or enterprise pragmatic innovation, we know you want to leverage the latest technologies, we know you want to be able to advance in those spaces, but we also know in the end, you know, you are a bank or a hospital, and you need to manage that transition in a fashion which allows you to keep your business going, I think we've been very good at helping companies do that-- >> If I took you on a sales call and I was say, a VMware sales rep or a competitor, obviously the competitors will try to counter what you guys are doing, as we know, we see Cisco out there and others where there's competition, this industry is evolving but you guys have an advantage, what is that pitch to the customer, why VMware over the competition, because they're certainly saying that they can do things better than you guys (mumbles) and vice versa. >> Yeah, I think there's a few advantages, one of them is our enterprise history, our enterprise readiness, some of our competitors obviously have that as well, but you know we are very very strong across all the global, the worlds global enterprises. The other part that you are going to see of course is in some ways we've got the ability to be a little bit of a Switzerland in many cases, our job is effectively to say abstract virtualize your infrastructure, make it easy to manage and optimize and we don't necessarily care what that infrastructure is, is it a public cloud, is it a private cloud, is it a hyper converge infrastructure. So we're able to offer that unified or essential kind of digital infrastructure that goes across all of those things. And within that you're giving choice and flexibility. If you want to move that work load because you think you'll get a better deal on a different cloud, we will help you to do that, or at least make that easier to do. >> Along the spirit of competitive advantage, besides innovation, which we talked about, this very rich history, twenty plus years of innovation at VMware. What are some of the other elements in your opinion that companies like VMware need to have, to be disruptors, couple that come to mind when I think of VMware are partnerships and diversity, what are some of those core elements that really are essential to drive disruption. >> So I often use the phrase which sounds maybe a little bit opposite to disruption, which is resilience, right? Is your company in a position to be able to take either blows from an economy, from competition, and so on. And actually take advantage of those in some ways. And the other part of that is leveraging that innovation as you're trying to say I want to be able to grow and be successful can I do so in a way which that innovation is, I use that word again, pragmatic it fits well with everything you do. I think VMware in my view has a very strong culture, which leads to that, and sometimes we use the phrase of VMware, as a bit of a why culture, people ask why all the time, right? So if I say we're going to do something with project X, some senior engineer is going to say why, now what's even more important, is that often becomes a why not, so you look at some of the partnerships we've done, some of these, where we get into those conversations and you know, the natural thing, well we're not going to partner there, but then somebody says why not, we could partner there, and after that you get some very interesting-- >> We can integrate this into theCUBE Q and A, so right, why block chain? >> Right. (John laughs) Yeah so, the key area where we look at block chain is what actually part has, made some comments on block chain around it being this key almost like the IP story for the future of financial services, right, IP networking so from networking point of view. So what we see is that this is essentially a foundation layer for applications to be built on, not just for financial services, but we see it also showing up more and more in things like supply chain. That's a hard problem, its a distributed problem, its a problem where you get a bunch of customers saying we want to operate as some sort of a group together but one wants to go on prem, the other wants to go on cloud. And that's what, where we've got a unique-- >> The IP metaphor is interesting, I mean, if you look at what IP networking did. >> This is pre-web, this is internet. >> Correct yeah. >> I mean what happened after that was just an amazing shift in our world. So you guys see block chain as a similar paradigm? >> We do see that, well we see, its a layer for which it's be, kind of somewhat ubiquitous layer that then you build these trust applications on top of, right. And so its almost like a platform layer at that stage. That's why when we look at it, its almost becoming kind of a software infrastructure story. >> Well, you know we'd love block chain. We (mumbles) time We're going to talk more in depth. >> You do I saw some of your stuff on block chain online. >> Yeah, great Thanks. >> Yeah. >> So I saw a tweet from you the other day, that of all these poster presentations behind us you were really trying, with all these stickers and things. How is you sticker collection coming along? >> It's coming pretty well, its kind of funny, what you're, me seeing here is a bunch of engineers who are really passionate about the thing they are presenting. So when I find someone and built little LEGO characters, there's little stickers that they build and so on all trying to push to some degree their passion about what they're doing, right? So yesterday I come in here at 7a.m, thought the place would be empty but there was actually a bunch of engineers here. But I was getting all these stickers, right, it was just surprising to me, wow, people put a lot of even artwork into these projects as they try and describe them. >> Well, and what I think about that is it shows creativity and its one of those, you might call it a softer skill, which I don't know why its called softer skills, but thats essential is, is the ability to express that creativity. And also some of the other skills like collaboration and learning how to present even better, which are also elements that the folks that attend Radio get to work on. >> Correct, many of the engineers who present here, this will be their first maybe or their second time presenting to a large group, now they are presenting in front of two thousand people, and in many cases, two thousand of their peers, who know exactly what technology they're talking about, so you can't just give some high-level, oh it might be better kind of thing. Someone will say, where will it be better, how fast will I be, and so on. So, we make sure that if any engineers are looking for training, or want to get some help to do those presentations, we spend quite a bit of time making sure they can get that because that's part of growing them as engineers and as future professionals or business leaders. >> Absolutely, well Ray thank you so much for joining John and me on theCUBE at Radio 2019, great to talk to you, and excited to hear some exciting things to come out of VMworld 2019 which is just around the corner. >> That's right just coming up, Thank you. >> Absolutely. For John Furrier I am Lisa Martin, you're watching theCUBE from VMware Radio 2019 from San Francisco. Thanks for watching. (upbeat music)

>> Narrator: Live from Austin, Texas, It's theCUBE, covering KubeCon and CloudNativeCon 2017. Brought to you by Red Hat, the Linux Foundation, and theCUBE's ecosystem partners. >> Welcome back and we're live here in Austin, Texas. theCUBE's exclusive coverage of CloudNativeCon and KubeCon, which stands for Kubernetes Conference, the not Cube, C-U-B-E, that's us. I'm John Furrier here with Matt Broberg, co-host in here for Stu Miniman, podcaster himself And we also have a special podcaster here on theCUBE, Edaena Salinas, who's the host of The Women in Tech Show @techwomenshow on Twitter, also a software engineer at Microsoft. Welcome to theCUBE, thanks for joining us. >> Thank you for having me. >> This is kind of like a podcast, we're like live though, we're streaming. >> Oh, okay. >> Love your sweater, that's a binary tree holiday tree. >> Binary Christmas tree. >> Binary Christmas tree. >> So perfect. >> I'm going to do a quick sort quickly, no I'm only kidding. So question for you, you've got a great program, you've got a desk over there, you're doing some interviews here, great to see you here doing The Women in Tech. We've done a lot of women in tech interviews on theCUBE, love to showcase women programming, women developers, women in stem, great that you do it so congratulations. So tell us what's the vibe like, are you people excited to do podcasting, is it all women, do you interview men, so tell us a little bit about the show. >> That's a good question. The motivation of the show is to have technical women talk about what they're working on, the products they're building or business strategy, instead of what does it feel like to be a woman in tech, or the only woman in the meeting room. Those conversations are valid, but I think we've heard a lot of those, and the community can benefit if they're just listening to what they're working on. >> It's great to get the education out there. So I have a question for you, I'd love to ask this. But I never really had a, talk about software engineering on theCUBE, what's the style difference in coding, do that's talked about, are women, do they code differently? Is it, probably neater, cleaner, is there biases in coding in that come into, because. >> I'm not aware of (laughs) difference like that, but, you could find that out if you run a script on the GitHub projects but, I don't think it affects. >> People don't, they don't talk about that, do they? >> They don't talk about that, and I certainly haven't experienced anything like that, and I learn from my coworkers and they learn from me. >> Now what are you working on at Microsoft? >> I am at Microsoft Research earlier this year, so what I work on is adding AI features to our existing products, like Outlook and Dynamics, so yeah. >> And I want to switch gears and talk about the podcast a little bit. So, I'm curious what was your inspiration to start it, and had you done podcasts before or did it just feel right, like this is the time to do something? >> I hadn't done a podcast before, but I had listened to a lot of shows. And the initial motivation of this is, at Microsoft where I work, they have this Meet Our Leader series, where they bring men and women in a leadership position. The audience is mostly women, and I was tuning in there by Skype, and there's 200 people listening to them plus people in the room, and they're asking questions about what's our business strategy or technical questions, so I'm like, women want to know about these things, and then in addition to that I noticed some women, technical women, they list on their website, I love giving talks, just not the diversity talk or the lady panel, I've given it several times, I just want to talk about cloud computing or the things that I work on. And then I looked if someone was doing this already, a show like this. I didn't find it, so I started it, and it helped that I listened to other shows. >> I mean I find when I talk to a lot of my women friends that are technical, sometimes CTOs and higher, and even down in programming, they don't want to, they just want to talk about what they're working on. They don't want to be the, that woman in tech on the panel, I've had a friend said to me privately over the weekend at a party, I don't, am sick and tired of being called and them saying, I need a woman on a panel. >> Yeah. >> I mean, it's kind of like a backlash, but they also feel obligated to do it. >> Yeah. There's kind of a new culture developing. Talk about that, and what that kind of conversation's like in your world. >> Well what I've heard, for example Sheryl Sandberg I think has said, there, we will reach a point someday where we won't be called a female CEO or a woman engineer, it would just be engineer. So, that's our goal, to just lose that label at someday, right now, the show has the label because I'm raising awareness of having them talk about technical topics. As more people hear about them, it's just going to be natural and normal like, sure I learned from Nicole about Kubernetes, and then men are also listening to the show, which I think benefits a lot the community. >> I have two daughters, one's in high school, one's in college, one's at Cal, and they're techies, they're science, they like science, not coding yet. Their mom doesn't want them to be like me and code, but, so they're, but they're-- >> Just give them the choice >> I said hey, do you do Cube interviews, it's also an option. But in their culture, when I ask them about this, they're like, we don't think about it. So there's a, at their level, they're all in school together and it's interesting, I think a time is coming now where the awareness is putting the old guard pressures away, there's still some bad behavior, no doubt about it, I see it everyday and it's being called out, thank god, but now it's just like, you're a person in tech. >> Exactly. >> So I think respect is the number one, respect for the individual is something that we always preach, independent of who the person is, male, female, whatever. >> Yeah, exactly, and we will reach that point soon, I hope so, where we lose the label. >> So you're 77 episodes in, I'm also a listener, I learned a ton from it, you have brilliant people on every week. I really admire you for that because I know how hard it is to produce a podcast. What are some of the things you didn't know before starting a podcast that like, oh wow, that takes more energy than it looked like at the time. >> That's a good point, yes. The very first few interviews that I did, I didn't take into account how the guest would respond. So I prepared the questions in advance, and then I would think, this is going to be a two-minute answer, but the person just ended up saying yes, no, or sure, that's a big problem, and I was counting on it to be more, so I needed to prepare in that aspect and what helps is just, if they've already given talks, just look them up on YouTube or find all their interviews they've done, just to get a sense of how they talk. There's also people that tend to give super long answers, and you need to prepare for that, how you're going to handle it. >> I noticed you had someone from Bitnami came by recently, was that Erica? >> Erica Brescia came on the show a few months ago, the COO of Bitnami, and in that episode we focused a lot on entrepreneurship, she came out of YC, so sort of building Bitnami to where it is, and today I interviewed the engineering manager of Bitnami, and she talked about Kube apps and all this security aspects. >> What are some of the innovations you're seeing in your interviews? Can you highlight some examples recently that jump out at you, that are, lot of innovation coming from these ladies, what are some of things that they've done? Shine the light on some of the awesome highlights from your guests. >> One of my favorite ones is Rachel Thomas, she works at Fast.ai, what she works on is bias in machine learning. Machine learning is about learning from your data, but I've heard, this woman at a conference bring it up, like, if I'm a minority, I'm a minority in the data. So you need to take that into account. So there's a lot of people working in the space. That was a really cool project I think. >> Data driven analysis. >> Yeah, but sort of, considering that bias that can be in that data, and make sure your data is better. So for example, it's a known fact that there's a lot of men in the technology field, so if you're going to get job recommendations, if a person like me, Mexican, I studied computer science but if I'm a minority in the dataset, maybe I'm not going to get the recommendation. I'm not saying that how it works, but that could potentially be an issue. >> It's a statistical fact. >> Yeah, but if you don't take that into account in your system, maybe women are not getting job recommendations, of openings. >> That's a good point. >> So, it brings up-- >> That's a really powerful observation, right, and I was curious, as a software engineer, software engineering is your craft and podcasting is your hobby, how has podcasting influenced your software engineering skills? Because ultimately that's the path you're going down career-wise. >> Well a big part of software engineering is about talking to your team and going to meetings, talking about solutions. Podcasting has help me a lot, improve my soft skills. For a period of time I was editing my own shows. One thing that I noticed is when I was talking to my guests, I'm listening to my recording, when I would say an idea, I would tend to lower my voice. So I noticed that, and then I said to myself, I'm probably doing this in the meetings at work, and then, I work-- >> What an amazing insight, right, like now you're seeing how you're presenting yourself in front of other people in technical ways and then you get to bring that into your work. >> Yeah, whenever I would say an idea I would just be like, what happens if we do this instead? That was like I have to-- >> That's a great example of self-awareness, right, I mean, everyone should do that, listen to their, look at their actions. >> Yes, so it helps with the soft skills. And it also helps if you're working in a certain area of software engineering, and you want to find out more about it, you can decide to do more shows on that and just share that with the community that women are working on this. >> It's great to see you have some Cube alumni like Erica on, we interviewed her on theCUBE at Google Next a few years ago. Share some coordinates, when does the show go out, when do you record it, does it ship on a regular cadence, share a little information. >> The show is released weekly. I publish Monday evenings, but I share it on social media on Tuesday mornings, so if you're subscribed, you would get it Monday evenings. >> Good for the week, running, on the bike, in the car. >> It's 30 minutes. >> Any video podcasting coming? >> I don't have any video, no. >> Lot more editing required, trust me on that one. Cool. What's the most exciting thing that you're working on right now? You have the podcast, which is a super cool hobby, great to get those voices out there, so congratulations. But at work, what are you working on? >> Yes, well like I mentioned earlier, I work on a team it's a team under Microsoft Research, a lot of it, we don't know what people working on there, but, my team works closely with product teams. So we're adding AI features to Outlook and Dynamics CRM. Just to increase the productivity aspect, in this sense. >> So you're bringing applied R and D to the product groups, mostly AI? >> Yes, yeah. >> What's the coolest thing in AI that you like? >> Oh wow, well I really like recommendation systems and things like that. >> All right, well thanks for coming on theCUBE, really appreciate it, The Tech Women podcast here, they got a booth over there. Doing great interviews, here's at theCUBE we're doing our share. Two days, the second day of live wall to wall coverage. Be right back with more live coverage, in Austin Texas. You here the music, this is the big D, Texas here in Austin Texas. More live coverage, that's Dallas, we're in Austin. Be right back with more live coverage after this short break. (futuristic music)