live from San Francisco California it's the queue at vmworld 2014 brought to you by vmware cisco EMC HP and nutanix now here are your hosts John furrier and Dave vellante okay welcome back and run live in San Francisco California this is the cube vmworld 2014 our 50 year covering vmworld I'm John for my coach Dave vellante Sanjay pune in the EVP and general manager end-user computing friend of the cube he's been on throughout his career at SAAP that he moves right across the street to VMware last year and great to see you great good to see back in the cube Thank You John's pleasure to be what a year right so last year you came on board guns blend Pat was really excited you've accomplished some of your goals I think you laid out I said what's your goals for next year you laid out some goals and then big acquisition AirWatch securities hot mobile was booming we are living in a multi cloud mobile infrastructure demand tell us what happened over the past year obviously big M&A give us the details yo John and Dave I was like on day like point five day one when I came down there cute but I was actually watching the replay and I'm like I actually said that and it made sense no it's been a great year and its really been a team effort so the first thing that I did was I said you know well before we decide the what and the how I really want to figure out who's on the bus so we really both kind of promoted a couple of key people within the company like kid Kohlberg remember kid was like the star of last year's show he's now our CTO and user computing what hired a couple of rock stars for the industry like summit the lawn and a few others who've really come in and shaped us and then as the team started to gel we then began to ask our customers what was the key missing part in our strategy and it was mobile it's very clear and we began to then ask ourselves listen if we're going to get into the mobile space you know do we build do we buy to we partner and we were winning deals in the desktop space primarily against Citrix we compete in there getting a lot of market share but the mobile space we'd lose deals and I go and ask our customers who you pickin and eighty ninety percent of time was AirWatch same time our CIO was doing an evaluation internally we were running on an SMB tool fiber link that then since got bought by IBM were running out of steam with it because as SME tool and I said listen you evaluate the market look at all the options and based on what you pick will probably influenced our acquisition decision they love their watch do so you know those were two or three key moments it's the franchise player in the team right I mean ultimately ultimately you know Mobile is today kind of that sizzle point if you're talking mobile cloud it is the sizzle point John Marshall and Alan dabiri came in they've added a lot so you know I talked to my keynote about three core pillars desktop mobile content collaboration we really feel like today when I was looking back we had a tenth of the portfolio last year this time and I think you know lots of good vision but now we actually a vision and substance right i think is pretty powerful so is it the lebron james who it was the is that the Tom Brady is it the Ray Allen you know the key role play I love basketball all those teams are great i think i'm some of my favorite all the Phil Jackson teams yeah my role is really to be the coach and to bring into the construct the Michael Jordan the Scottie Pippen's you know all that construct so that when you put together a world-class ski I really believe we have the best end-user computing team in the industry bar not and this team really is now packed with people and process and product innovation and that's what you've seen the last 12 months it's a real tribute to this fantastic and use a computing team so as you talk about the news this morning around SI p we didn't catch the detail that we were on the cube here can you just take us through some of those some of those key highlights I mean clearly I have a soft corner for a safe as you would expect that was there for seven years and have a tremendous respect they are the leader in business applications a tremendous player you know hundreds of thousands of customers and what we felt was if you could marry the best of breed aspects of what sa fie does well applications mobile applications cloud applications on-premise applications all of that what we do very well which is management and security for mobile and that's what our customers have among the 13 thousand customers of AirWatch probably the biggest basin enterprise rsap customers and they've been longing for better integration you know you but I what's going on over there you know we asked you I mean listen to the end of the day we want to do what's best for customers and you know so packed bill mcdermott myself talk Kevin ruchi bharani who was on stage and we felt that we could build integration between the mobile apps and the mobile platform of SI p where s if he is very good with the management and security of air watch where we're very good you get the combination to best debrief and I think the customer quote in that press release put it well so G Abraham basically said he was a CIO sigma-aldrich we love the fact that you're bringing together the best of breed aspects of mobile security from AirWatch with mobile apps and mobile platform Mississippi and that's a nessuno abdur for the enterprise because of reality because the challenge people are having is it was taking it was too hard it was taking too long so how does that change now with this integration I mean in essence era what AirWatch provides is an elegant simple cloud centric mobile management security solutions much more than MDM device management at Marikana management and you know in every ranking by the analyst they are the undecided gold medal now you can basically use that solution and make sure that your applications also work so let's say you're bringing up we showed in the demo an example of essay p medical records or maybe SI p furia Psychlo whatever have you you can now bring that up on a device that's secure and the posture is checked with their watch and that's the best combination of both and this could just apply to any application it could be a box it could be our own content locker SI p is a clearly the leader in business application I start sweet recently and said VMware working with apple and United Airlines to bring mobility airplanes all secured by air watch obviously United Airlines big customer GE and other things so the interface to pretty much everything whether it's big data is going to be some mobile or edge device is that the number one requirement that you're hearing from customers that it's not just mobile users is the Internet of Things part of this how do you see that that's interesting piece is that is that true don't absolutely I think well I talked about the United Airlines case start in fact it's right off the website of Apple you go to apple and look at the business case studies they have the United Airlines is one of those case studies in the case that is actually pretty simple you know you've got these pilots that are lugging around 30 40 pound bags lots of paper manuals their flight landing instructions now those are being digitized with iPads in the cockpit so as you think about what the future is everything goes digital that first invades the cockpit then the flight attendants habit so they can check to make sure they have a list of the passengers and they can serve their passengers better and that's the way the world is moving but then you take that same concept and you extend now to machines where every single potential machine that is on the Internet can be tracked can be managed and security and our proposition there is to manage and secure every possible machine and thing and then analyze the data coming out of it we think that's a huge opportunity FML touch in Chicago last year and the chairman of the United told me a one percent savings in efficiency just on just on gas is billions of dollars of real savings so you know this brings back down to the the whole concept it's not just an IT thing it's a business process thing so how far along are you seeing the customer base on things like this is it is where it's--okay IT got workers out there you know bring your own device to work okay but outside of that what is the the uptake if you will on really connected intelligence yeah i think it's a it's and when we have you know 13,000 customers that we've had their watched 50,000 our customers with horizon 500,000 customers we have vmware many of them start speaking and we're finding in a couple of industries and consumer packaged goods and retail industries people are looking at things like for example smart vending in devices medical devices the future of a protected medtronics was on stage and they are a rare watch customer they were talking about the fact that their vision is well beyond just the mobile devices every medical device being protected potentially by air watch you look at oil and gas customers practically almost every oil and gas customers in AirWatch customer there's going to be embedded intelligence inside a lot of the oil and gas machinery and infrastructure that protects people from potential damage we expect to be able to secure that so our proposition in that equation is the management and security of every machine and everything and then the beautiful part of it is beyond just management and security I think the analytics of data coming out of that is a treasure trove of incredible valuable places for big data you know we spoke with bill McDermott when you were also at sa p and they had a very vertical approach and when we go talk about the big data conferences with a Q veterans all this vertical we need to have a vertical niche to kind of be a major player or or even a differentiated niche player but how does that affect your business is it vertical eyes you mentioned a loyal and gas flow but you know airlines is there a horizontal platform that can work across the industries or is it specifically verticals you see up your levels now you're at a different you're the edge of the network what's your take on that do you have to be a vertical player or zero horizontal plane that's a great question Jon I think that as the world's leaf asta scrawing and biggest infrastructure software company VMware that's what we've been going from zero to you know roughly run rate six billion in 15 years there is fundamentally first off a horizontal play that goes across and cuts across many industries but very quickly we find as we were able to package solutions by industries so I talked for example at the keynote about the health care industry and how we were you imagine a doctor walking into their office moving from their office to the ward from their desktop to an iPad to potentially getting into the room and they then have a thin terminal client terminal and then they collaborate with their other doctor that has you know an iPad to healthcare is one example state and local public sector is a different example we're being successful education retail manufacturing we picked four or five verticals I been fortunate in the fact that much of my experience at SAAP was running the industries at SI p so i have a good amount of experience at industry solutions we're certainly not an application's player like i say p where we're going to vertical eyes in a vertical stack applications but you're going to see us drive solutions and when you drive industry solutions and let's say five or ten industries where we're relevant you're going to see our average selling price growth and differentiation is application-specific is tends to be vertical but as a platform product player you're this way yeah you don't wait fundamentally to start with but then you start creating solutions yeah which are scenarios that work in a particular industry to enable those guys exactly and we pick the five or ten industries where we think we're going to go focus and we're starting to see as we do that our average selling price growth everything they have some fools yeah you know what the other thing that happens is that you actually start becoming relevant to a line of business buyer beyond just idea and that's very important I was on the performance metrics give us some data can you share some of that pat was glowing with always performing well so can you share some numbers yeah I'll tell you what we did the last three quarters and growth this is the fastest growing the one of the fastest growing business units in q4 last year we grew thirty percent north of thirty percent in q1 or we announced we grew north of thirty percent again and then in q2 we said we grew north of fifty percent right and now some of that results the contribution of area watch but organic or inorganic we are growing and it's not a small business you can grow from one to two and that's a hundred percent this is a size of a part of VMware's revenue and a growing part of it we're talking hundreds of millions of here is that for ya I mean it's well over ten percent of the revenue and the growing percentage of the total company's revenue I think that this is going to become an increasing part of the embers total revenue total relevance the CIO and because a mobile cloud and a big part of the brand appeal of the inland I mean listen remember is well known as an infrastructure company done very well in the data center but the moment you start talking mobile and clouds you're appealing to the CIO and that's a very different type of conversation we want to raise the appeal of VMware I yield to the CIO and we think mobile it's a big market you guys did the TAM analysis Pat I probably has you doing that but whoever may be Jonathan it's a big chunk of it at his EUC a sizable pardon bigger than it was before and we just have to kind of grow into that Tam and then grow the tam further and that's and you started that kind of throw that sounds getting the flywheel effect going and the problem with VD I was always a cost cost cost and you know so it was a narrow niche this mobile it seems to change that hold concussion for my cost of value you know Dave it's a very good point first off mobile for us means more than just a device it means being on the move and on the move means you could be on the move and you're using a laptop here we got to think about the relevance of how you get solutions on to your laptop and desktop I think part of the reason video I gonna hit a little bit of a bump and some of our competitors have been stalling and declining is it's just too complex into costly and we fundamentally now reinvented a modern stack for desktop virtualization that runs on top of all the great innovation that we have in the software-defined data sound like virtual set like vSphere and a lot of things we're doing so all of a sudden the cost of EDI we can show we take down by at least thirty to forty percent that's a game changer now you add moberly to say listen when you go from a desktop or a laptop to a tablet or phone you've got the leader in mobile security and management AirWatch integrated the horizon this is what we announced with the workspace sweep and the final pillar is being able to share that content in a very simple yet secure way so think sort of Dropbox but all of a security and SharePoint brought you that's the third pillar all three of those desktop mobile and content extremely so you're saying saji the tipping point is the asset leverage that you're getting out of the infrastructure is you move toward this sort of software-defined thing that enables this type of decline in cost and accelerated growth absolutely and that's you know the whole aspect of how software has been done is you integrate things so your lower costs and you make it much much easier to be able to palette and by now either could be bottom premise or the cloud so we're seeing that connection of you know the head and the body think of the body being the traditional software-defined data center the head being end-user computing all the connective tissue muscle fiber blood vessels and so on so forth making that connected now makes us a lot more appealing than telling a customer listen by your data center infrastructure from VMware your desktop infrastructure from Citrix your mobile infrastructure from MobileIron and you're you know content collaboration solution from like 10 different starters right increasingly we think that that's not the way in which people are going to be buying software Sanjay just some highlights from the keynote looking here on Twitter through our little listening tool great reviews by the way electric flying speed she's gonna be CEO someday Pat heads up on that that was coming from the Trident that was this guy without a limiting move on stage when I said fat ought to be thinking about an ice bucket challenge so anyway rights beyond amazing executive really got really great reviews on the twittersphere besides a challenging pat calcium of the ice bucket challenge of which joe 2g already challenged so let's see how he's out of fun again oh fun in all seriousness two quotes i want to pull out from the twittersphere you said software in the modern cars more than the nasa spacecraft awesome comment when I pivot on that in a second the other one was Sanjay is emphasizing the importance of world-class infrastructure so first define world-class infrastructure from your perspective given your industry experience in vision for the future and to talk about how it relates to the modern car were just NASA and the change of speed of Technology you know John when I gave my keynote i put this beautiful picture of this incredible modern architecture in single protocol to marina marina bay sands tower it's three big towers I think 40 50 60 floors and a fantastic infinity swimming pools at the top and not been a Singapore you got to go there and check out the swimming pool at the top of it but the only way in which you could make those three towers work was world-class foundational infrastructure the three towers by the way was a metaphor to desktop mobile content collaboration and of course the beautiful workspace view at the top of it so the thrust the impersonalist well all of that to us the software-defined data center is the de facto interest so that makes a lot of that happen we feel very very fortunate and blessed to have the world's best infrastructure that makes that happen virtual server storage networking management all of that put together allows me to be able to build world-class towers on top of that and the end of the day it's not just solid it's lower cost of ownership in the opportunity now my comment about the the 1970s spacecraft and so just to say that today we live in a software economy it's not to say that hardware is not important but someone joked that software is like the wine and hardware is like the bottle while it was important but the the software glue really ties Harvard together in a very special way and that's really the genius of what's making everything whether it's a device whether it's a machine even more relevant and that clearly was defined in 1972 spacecraft but today you can see this invading automobile thermostat refrigerator vending machine that we believe the future so how to ask you to shoot the arrow forward what are you getting excited about I'll see the accelerated pace of change from the spacecraft to the car after you mention the United Airlines and Apple it's a well documented as an end user environment certainly the interfaces everything and that seems to be the focus area what's your view what is exciting where's the inflection point enabling technology that you're watching from the foundation only to the top I mean listen i spent seven years at SAAP primarily in the analytics and big data space and then fire that another five years that companies like in thematically and I've just my life has been about end-users and whereas we came in here we coined this phrase which is our big broad vision we want to allow end-users to work at the speed of life so if you think about your life in the consumer world you don't lug around 300 CDs into your car you have an ipod you have an iphone your connect to the iCloud and it's all seamlessly there you watch a movie you start off on netflix you go from San Francisco to New York to Barcelona you may start and then stop you know someplace else and you can you can start exactly where you stop house of cards or whatever have you watching enterprise software has been unfortunately hard to use complex hard to implement and the more that we can make enterprise software simple simple and secure we to do the security part of it pretty good we tend to do the simplicity part so i think enterprise software companies can actually take a page out of the book of consumer software companies on the simplicity now the consumer companies could take a lesson out of the book from us and security and but when you put simplicity and security together you get magic when you could put together control and choice together you get magic so it's not the consumerization of IITs we all love it's the IT of consumers each other you could really flip that around like dead laptop staff I mean there's so many different place in the words that you could do that's exactly the way but I think that's a great point Sanjay thanks so much for coming to Cuba congratulations on a great keynote and thanks for coming to spend your valuable time with us here of the cube appreciate it we live here in San Francisco we write back with our next guest after the short break thanks John

>> live from San Francisco, California It's the queue at PM World 2014 Brought to you by VM where Cisco, E M, C, H P and Nutanix. Now, here are your hosts John Courier and Dave Ilan. Take >> Okay. Welcome back when live in San Francisco, California v m World 2014. This is the Cube where we extract the signal in the noise. I'm John for day. Volante are 50 year here Of'em world broadcasting wall to wall. Three days of live coverage. Our next guest, John Gill Martin, GM and VP of the Supper defined Data center business unit. Welcome to the Cube. >> Thank you. Glad to be here. >> Yeah. So this is an area. That may be mean. Streams. Not on top of what we love to geek out stuffing. Find data center Two years ago. Maybe three years. Feels like 10 years ago. See your acquisition and Martine's been on multiple times. Suffer. Virtualization really has set the agenda for what's going on in the data center. And remember, it was very much a buzzword. Std. See some fun data center. But now it's becoming a reality. I want first question get your perspective. Is Where is the meat on the bone right now. This year with somebody find designer. What is materializing right now in market that's available in happening >> has been fantastic, because if you think about our customers, they're all trying to move to this notion of self service. Cloud help the developers be more agile, be more productive and soft, defined clearly the right architecture to go do that. And the last year has really brought us the last couple of pieces to go. Make that a reality, Obviously never. Fertilization is a huge component. Delivery of NSX is really brought us a kind of leaps and bounds forward around that. The adoption of that has been great and then now a virtual sand as well, just to bring soft defined into the storage space. We were seeing a tremendous amount of interest. You take all of that, you fully virtualized your infrastructure, and then you bring management on top of that automate on top of that and really, now we have the ability building self service files inside the enterprise. Start to meet the meeting with developers, and you have this kind of a self service agile idea. >> It's almost as if you change in the airplane engine out at 30,000 feet with summer defined data center, people said on the Q bond. It's very difficult, but I want to get your perspective of where the pressure points of innovation are coming from coming from the APS service containers show the app, sir, setting the agenda were close. Now diversities another variable. It used to be the infrastructure would enable on top of it. Now we seem to be rushing down from the top, and this dynamic provisioning environment seems to be this DEV ops requirement all that's in place. So how do you how do you How do we talk about the innovation of the pressure point? What are those pressure >> points? Yeah, well, as you point out, it's really about the applications and the requirements of applications. And pushing down on the infrastructure, and in particular, is you look a kind of new style cloud native applications, which tend to be a bit different than traditional laps. They asking different things the infrastructure, and that's asking. Your developers are asking to do different things than necessarily what kind of fish in a lapse of required developers are looking for portability. They're looking for agility. They're looking for a difference that a tooling really. And you know they want that experience where they go to a website that Newton A P I and programmatically spin up infrastructure. And so that's really what enterprise like the organization's now our challenge to go Dio is to go provide that type of investor, actually support that for the helpers. Technology today is fundamental to the business model of every company out there. Used to just be about back office operations. Now it's really about the marketing organization, the sales organization, product development organizations. Every part of the business depends on technology is changing business models, and therefore this is really what's asking Iike organizations to be much more responsive and to do a lot more than they initially ever have in the past to support the business, to move >> quickly. So in terms of network organization, So how much is that? A part of this new model >> in our virtual station? Cooley a critical component to this right and, you know, a super interesting. When we first brought out NSX last year, a lot of value proposition was around the speed agility. And if you look at the big cloud providers, you like the big financial firms. That was the kind of primary motivation. Initially, we still see that a lot. It's been interesting, though, the last year to start to see the value proposition for network organization really shift. And if you're looking more than mainstream now, it's really a lot about this notion of micro segmentation. This notion of how do I bring security from that used to just be in the perimeter and start to bring that inside the data center. And that's been driving a lot of the interest and be able to get security controls all way down to the PM and the application >> itself. Just on Fridays. Pregame crowd shot we had Steve Perrin chimed in, Gone. The security question. I were the big opportunity for start ups, and he said Security. Yep, and it's really not about perimeter security anymore. It's about something else. Could you describe what he means by that icy perimeter? Security was the old way. Secure the perimeter. But people are getting in. Protect the queen with a moat. What does he mean by that? And why do you say that opportunities there? >> Yeah, that's the traditional model of security. The data center is you put up this big as you said moat around the data center, and you hope that no one get over that The problem was, if someone did, then it's all exposed on the inside it. And so the notion now is how do we bring security inside the data center? Protect those applications. But in order to do that, you know that traditional models were doing that, or just two operationally complex or too expensive just can't do it. Physical systems. So the beauty of never quit realization use and start to bring that in inside the data center, bring those security controls the BM and do so in with enough automation and policy based on mation that it's operationally feasible to manage. >> Well, what about the flip side of that? When the queen wants to leave her castle, >> how do >> you secure that use case? If I'm making sense and >> I'm not sure I understand. >> So Okay, so you get queen being the data, let's say and the data by its very nature is distributed. Right? So, um, okay, protect the perimeter. That's that's not enough. Now I can go deeper inside the data center and provide tools to make it simpler to deploy. Or if Aiken, you know, find a problem faster toe to solve that problem. But it's the data starts to become dispersed. How do I create a security model on? Does this software defined data center Help me do that. Accommodate that dispersed data that distributed data model? >> Yeah, because I mean the great thing is as you bring security controls into software and set it in the hardware, then you can travel and be part of that application. And actually, as the application moves or the date of that application moves, you can tie the security policies. The application itself >> was an application centric data centers security model, >> and it's and it's a platform also that you know, an ecosystem is building on top of to go, bring even deeper set of security capabilities. And top of you talk about the startups you're talking about a second ago, you know, it's this whole platform doubted for innovation. On top of that, you could bring really interesting ways of thinking about new security. >> Two years ago, when Pat Gelsinger took over as the C E o m. C. Had a financial analyst meeting, and Pat was part of that of your new C C F O stood up and talked about tam on gave a really good Chris presentation run that. I'm sure you're seeing these slides a lot. We see them as analysts big, big opportunity for VM wear, and a huge part of that opportunity is the software to find data center. So I wanted to dig into that a little bit. Specifically, when I look at things like Tam, I say, Okay, what's the business case? Because the business case is gonna ultimately determine the degree of the rapidity of the adoption. So I want if you could talk about the business case for the software defined data center, maybe compare it to sort of phase one, which is, you know, virtualized compute. Yes, this case was enormous. It was a 10 X value proposition. Is this bigger? Similar, Smaller, twice as big when we could talk about a little bit. >> And when you say business case obviously thinking about from the customer perspective, >> Wellit's, either I'm gonna cut costs or I'm gonna create some other kind of incremental business value. Other. I'm gonna drive revenues. I'm gonna reduce cycle times or introduce the lap times timeto value, et cetera. >> Yes, that's the interesting thing is often find data centers really kind of hitting on all of those things where the key motivators is really moving faster and be able to reduce like a times instead of four weeks to deploy an application. Let's get it down to a couple of minutes. Let's be able to meet the needs of developers to do Dave off style soft development. So it's all about speed and kind of driving revenue from the back end. If you start to think about the operating expense and capital expense, so shoot with the infrastructure. You can start to address those pretty aggressively, you know, if you think about virtual sand, for example, it's all about a different operating model for deploying storage virtual machines, its applications centric and V M Central, and so you can reduce the amount of time that initiators of spending, managing infrastructure and get them focused on the energy and kind of applications. So, one way to address topics, or if you think about the capital expense, what we see now you've done quite a bit of analysis is by virtual izing network fertilizing storage you can actually get down to anywhere between I think it's 35 49% reduction in the total capital expense of building your data center. So really significant opportunities to reduce costs both on the operating expense side through automation, but also the capital expense side by moving more intelligence into the hardware itself so that just like with virtualization, if you go back, you know, 5 10 years virtualization was a very simple capital expense story here. Now, where we have a story that's well, much broader than that, but still inclusive all those kind of capital expense benefits. >> I gotta ask you about competition. Just chicken out. What's going on around the conversations? Um, obsolete VM where staking their claim out Amazon on one front. But Microsoft's a player in the enterprise. So what do you guys do? These of the Microsoft partner frenemy. They're in there and start stuff. Our players got plowed. So how do you guys look at those guys? You guys too far down S o. >> You know, with Microsoft? Yeah. At this point, we still are. Let's see ourselves. It's really kind of leading the way around sort of virtual ization. And that's really been the kind of core in the foundation which we started from, and we still have tremendous set of capabilities there. And so that's kind of a starting point. And then you build off on everything we're doing around network fertilization, everything you're doing around soft defined storage, really a very differentiated set of capabilities and your eyes really unique set of capabilities from be able to build that whole virtualized infrastructure, then your episode of management capabilities on that that are increasingly header genius in nature. And we have this ability to kind of extend the data center in unique ways, you know, managing automated here but extended after the cloud as well. So pretty powerful set of kind of technology. >> Car legend Box said that VM wears it is a data center automation company. Um, should he added orchestration to that, too, or talk about that. What is data center automation company mean? Because he's referring to the South to find a descent course cloud certainly is automation, orchestration and the cloud, but from your in your world What does that mean? >> Automation is really about taking a lot of the manual activities that United Administrator or anybody else who's spending time infrastructures does. And let's run that in software. And that's not tie ourselves to operations that are specific, proprietary pieces of hardware. Let's get to a model where everything could be automated through software. We could get the scalable models of deployments and operations naturally, what automation means. Automation then allows you to start to move at the speed of business rather than being tied to the kind of infrastructure in the hardware and everything else underneath. >> So the other quote from Carl was awesome, by the way. Great interview, he said. How glad the customers still on friend. Okay, I buy that you have a zillion customers, a lot of Amon prim. Why not private club or private cloud is today? Or his private cloud, the halfway house or a way station to the hybrid cloud? So talk about that dynamic. You know, summer defined data center at the end of the day could be software driven. The end of the day is still a data center. You still have a data center somewhere where the damn ploughed or on Prem talk about that on premise dynamic. Yeah, >> so, yeah. Ultimately, if you think about kind of hybrid Cloud hybrid Cloud is really the combination of assets that you own inside the data center, along with assets. They're sitting someplace else. And you know, the motivations for that are I want to be able to think about how do I optimized? I want to think about how Doe I optimize my choices, a placement for projects that are either short lived, etcetera. And so there's a set of applications or projects where makes sense to go rent capacity. But if you actually look at the total total cost of ownership inside the data center, you can actually get too much better economics by owning the assets yourself, building on top. So there's definitely a ongoing and continued rule for the private cloud. But there's a very clear you said the use cases for extending periodically into the hybrid cloud. So, really, you know, let's combine both of those that could boast best of both. So let's do that away that seamless. So we really treat the management. The operations of everything is the same, regardless of whether it's inside or outside, right? >> So I mean the buzzword. Bingos all getting resect is the new new new names Air coming out of that re naming convention? I gotta ask you about kind of specifically around the suite that Pat talks about talks with sweet. So I just don't understand how that parses out relative the hyper conversion and describe to the folks what is hyper converge. That's the new buzzword I know. I know. Hyper scale is a hyper scale with convergence. Is that Web scale? So what you guys to find hyper converged as hyper >> converged is, in our mind, really kind of the coming together of prescriptive hardware definition with software that's preinstalled on tightly integrated so that it's really easy to get to time to die So you could get up running virtual machines in less than 15 minutes and do that all with kind of a prescriptive design, guidance, prescriptive kind of price understanding and a single support organization that call and get support. If you need help on, that's really >> built definition right here, up and running with >> 15 minutes right and one of the key enabler. So that is the sphere and other key enablers virtual sand and really building all that and types of inside. One of these kind of off the show, >> called Converge, Prepackaged, converge on purpose, built, converged essentially. But that's where it's going, right? That would be me. That's >> where it's headed, right? And it's so it's really about making it easy for an organization to get up and running, get person machines deployed super quickly on, then be able to expand that in a building block way that's expand very quickly and easily. >> John Gill Martin is the V P and general manager. Somebody find business unit for the M. Where, um, tell the folks out there the last word he had in the segment. Um, what's the biggest misconception of summer defined data center in context? Of'em, where >> I think the biggest misconception is that it's something that's far into the future. The reality is this is something that people are doing today. Technology exists. We can build this, and you know this is the way in the architecture that everyone's headed down doors. >> And what's the one thing that you could share that they might not know about you guys? It's a very positive thing. >> Well, you know, I hopefully people saw all the announcements and work we're doing around open staff, for example, Really looking to bring these types of open a pea eye's been a neutral AP eyes on top of this soft to find platform. And yeah, that's a big news item for us. I wanna make sure that everybody saw that. It's a big part of Webber Head >> Open Stack and Dr Too Big Documents. Relevant news pieces exactly. Gives the app developers essentially access to infrastructure without being infrastructure. Guys. Right, that's fundamentally >> again helping enterprise guys set up in infrastructure that developers can access. Programmatically. That's >> John Gill Martin inside the Cube. We're here live in San Francisco for the emerald 2014. I'm John for what David wanted right back after this short break

live from San Francisco California it's the queue at vmworld 2014 brought to you by vmware cisco EMC HP and nutanix now here are your hosts John courier and Dave vellante okay welcome back in when we are live in san francisco california at vmworld 2014 is the cube I'm John furry with Dave a lot day our next guest is ecology about the president and chief operating officer VMware welcome back to the queue great to see you thanks for having me again Dave appreciate it looking good the question I want to get get to you right away as vmworld gets bigger and bigger and bigger every year and your job gets bigger and bigger and bigger every year so give us the update on what's going on at the top of VMware obviously operationalizing cloud and with air watch end-user computing I'll see several engine data center you're still on your mission what's the big change or impact to your business yeah so at the top of VMware we've recently announced some realignment of our executive staff and it started with myself patent Jonathan or CFO sitting down and having a conversation and how can we scale our company to be 10 billion dollars from six billion where we're at today so we looked at all of different operational aspects we looked at our go-to-market aspects we looked at the strategy and how we run our M&A business and we decided to break things up and I've now got responsibilities continue to have responsibility for the go-to-market aspects our partner ecosystem and i also have responsibility obviously for marketing's of these events in robin matlock our chief marketing officer and i also recently picked up the responsibility to support our strategy efforts as well as our ma efforts so all of that at the same time and I've given up a few of the operational you know responsibilities I've had and given in the Jonathan's and now Jonathan can really look at the back office and make sure we're built to scale operationally and this is freed pad up than to really focus his efforts and I'm on each of the strategic initiatives we have around the software-defined data center the hybrid cloud and our end user computing components and and it really worked out well the structures work and you know we have a great executive team that really like to work together yeah you got so you got guy running the trains on time in the back office you're watching the chess board has stringing the products together trying to build out the division exactly yeah exactly so I got I got to ask you about just in general the the overall plan with MA for instance obviously AirWatch very successful position pat was kind of glowing about it didn't give specifics certain a lot to do growing market a lot of white space is a lot of new things like docker obviously evo rails and I'll see an end user side before before we get the kind of that vision talk about air watch how is that done can you be specific about some metrics yeah so you know we're very excited about the air watch acquisition obviously it took place earlier this year and you know we've achieved everything we expected to achieve out of that acquisition it's really you know hit its mark based on the business hand when we built as we went into the acquisition and what I'm really excited about now is you know how do we get leverage how do we get economies of scale on leverage ally existing VMware footprint that we have on a global basis to really help bear watch expand deeper into our large accounts and faster internationally so as you could imagine VMware having a large international footprint AirWatch did not we're leveraging our international footprint to get air watch deep into parts of Europe and Asia and Pacific where they haven't been in the past and then the last area leverage we're really excited about is you know it was just last month when we put the air watch product on our price list that now gives not only VMware core sales folks the ability to sell it into the market but also our channel so now our channel has the ability to sell if you will you know all of the air watch products into the market and not just do it themselves in their channels so there's a lot of leverage we're going to get so go to market seems exciting a lot of action going on talk about the name change is obviously there's been some that we've got a decoder ring blog posts were putting together around okay you got you got the air name vCloud air a lot of stuff changing on kind of the nomenclature of some of the what's the rationale behind that was there a method to the madness was it just kind of like just trying to align everything not just water vapor anymore yeah exactly no yeah so we actually have a you know under Robin that like our CMO we have a team that focus on naming and branding and when we looked at all the components we have we actually were getting a little bit disconnect is connected and how we take to market our products their brands in their names so we've decided to streamline everything everything always mark starts with a small D so now we have vCloud air right for you know our hybrid cloud we have V realize which is now our suite of management automation and provisioning tools and operation tools so we just thought it was the right time to do it we had this great event called vmworld to take our new brand and naming conventions into the market and you know everyone seems to be responding quite well to it everyone recognized V something around VMware and we're just trying to streamline that across everything we do so there's some some consistency in our naming because they're not going to call this the VQ I'm actually I'm very open to doing that to hit you are a TM world and if you want to change the name we can make that announcement right now my stag Dave and I will sell right you're running out that I'm just asking I don't run M&A now so you guys pretty much I think nailed the docker positioning obviously this this conference I mean announced a big partnership OpenStack you know there was a lot of buzz about that before these disruptive technologies seem to have a good playbook for saying okay how are we going to address these how are we going to embrace them and how does I was going to help us attack art am so we started to pool the other day though I got to ask you this so who gets to 10 billion first AWS or or VMware so you mentioned how do you get to 10 billion now Behrendt yesterday at the analyst meeting I thought asked a very good question he brought up he basically said this conventional wisdom out here that Amazon is going to rule the world he said I don't I don't agree that said there's at least one other guy that doesn't agree you obviously didn't agree so I want to talk about that it's the one piece that is still hard to understand because you got you know guys like Andy Jassy I'm one end of the world saying okay this is what the world is going to look like and you guys like yourself and pat and joe tucci say no no this is what the world is going to look like and certainly you talk to customers are they are you guys both right you both is one wrong is one right what's your take on it well I obviously can't comment on whether they're right or wrong but I can give you our views and pay nobody really sad right we'll find out in a few years I you know during during the keynote yesterday I thought bill fathers had a great slide to talked about the amount of workloads that are on premise versus the amount of workloads that are off premise in the public cloud and still to this day less than ten percent of the workloads are in the public cloud and even if you look out many years from now there will still be you know less than twenty percent of the workloads in a public cloud so the opportunity still exists in private clouds and on-premise but what we need to do is we need to make sure that we're not locking any customer into a or strategy is it on premise or off premise is a hybrid cloud or as a public cloud or is it only public cloud and hybrid cut it has to be in an strategy that's why we tried to articulate the power of and and that's how we think we're differentiating ourselves in the market so we don't think about it as we're competing against the public cloud providers because we have a differentiated platform we're bringing this hybrid solution to market to what we call hybridity that allows our customers to move workloads you know inside out and outside in and when we pull all that together I think the winner will be the people who can truly deliver a hybrid cloud infrastructure and allow companies to seamlessly and securely federated workloads and move them on premise and off-premise and that's our focus so I like that strategy I mean basically you're saying we're focused on the customers you got about half a million customers now we have half a million customers and fifty million virtual machines under metal the strategies of you if you service those guys you're gonna you're going to do well and I and I buy that at the same time Carl in a way I feel like well you may not be competing with the public cloud AKA amazon your customers in a way are and what i mean by that is there's pressure from the corner office yeah now you have to be their advocate and help drive those costs down you've cited I think yesterday you started but look when it comes to security reliability availability that's where we're going to win that's our spot so my specific question is what do you make for example of the CIA deal a company like Amazon was able to take on a company like IBM and knock them out is that a unique corner case or I wonder if you could give a perspective on that no I think I think as we go forward we're going to see more and more if you all vertical clouds start to emerge you can think of the CIA transaction with AWS as a vertical cloud specifically to serve the CIA you know department and I think you'll see more and more of them emerge in the future and it's a very competitive world that we live in right i mean everyone bid on that except for vmware because we didn't necessarily have our product in the market for the federal government we didn't have our certification to service the federal market but now we will have in the very near future all assertive certifications we need to build a vertical cloud and go and support you know department of defense agencies so i think in the future it's going to be a competitive battleground everyone's going to buy for it but at the same time you know i think you know people can over rotate and say hey they won that and that means they're going to dominate this market this market is still very immature it's growing the majority of the workloads are on premise and I still go back to the fundamentals of the hybrid approach that you talked about to securely and seamlessly move workloads I think you know we're well positioned and but time will tell right and well the average age of an enterprise app I think it's uh almost 20 years one of years those actors gonna disappear overnight yeah no they will not disappear and again just remember that slide from bill father's presentation yesterday I remember it's a lot of DNA from BM worldstar 50 year 2010 when calm originals to CEO he laid out the vision and it's happening maybe Linda different for how you get there pivotal now out separate company yeah I got to ask you the Pat Gelsinger question I get in some comments here and LinkedIn people from my friend John bare ass CMO mint ago who worked at padded Intel people tend to forget Pat led the Intel team that designed for 86 he knows his stuff technically pad certainly as a technical person so Pat's got some time freed up you're doing the MA is Pat yesterday is you guys playing defense or offense of course was packing say offense you know he's an offensive player so did you really think he was gonna say detail I didn't I was actually saying he's an offensive nobody came up in the cube earlier somebody said oh thank you but I said no how had a player that's he doesn't play defense been knowing bad so I'd ask you the same question what is the offense for your plays in strategy go to market for VMware what hills are you going to take down first given your base position you had a lot of clients you're adding value certainly that's cool but as you go out and compete and win what's your offensive strategies so listen the thing we do every year at vmworld as we come out and we go on the offensive right we're a very disruptive you know technology innovative lead company in a very positive way disruption can be viewed negatively but I think we're a very disruptive company in a positive way and what we did this year is we absolutely went on the offensive we looked at the market dynamics we looked at the shift in how people might want to consume technology in the future whether it's open source OpenStack or this whole emergence of the containers that are happening so if you just stop and look at where each of those are at OpenStack is still very immature you're not going to find a lot of people have built big implementations of OpenStack successfully containers right has just emerged in the last if you will six months we're actually recognizing that as a potential market you know movement and we're embracing it so this is an opportunity for VMware to say we're not trying to defend our strategy we're not trying to defend our turf we see containers we see OpenStack as a market expansion opportunity for us and I think one of the things people tend to forget if you go back a decade ago there was many different value propositions around just server virtualization but one of the key ones was it allowed us to break down the silos that existed in data centers for many decades and with virtualization we brought to market a platform that allow people to get easy access to infrastructure in the same form factor so it was a platform play now think about that we broke down the silos a decade ago if we go back in as an industry we start to deploy VMware which most customers have today then all of a sudden now I need to OpenStack environment and let's now think about a container strategy and deploy something like Dockers and you do all on different physical infrastructures you've built a lot more silos and it only makes it that much more complex for our customers and our partners this is why we're now taking to market in a very offensive offensive approach to say support VMware but if you want to run these other things please do so but we believe are the best platform for service delivery that gives consistency and lowers both effects and capex for our customers yeah and you said the consumption is key and this cloud consumption models changing the game on how customers can soon technologies so you're saying hey we want to protect our vmware base but we're going to give them a choice exactly right fictional flexibility a choice is one of our key tenets of our strategy and as our company if you will values so I want to talk about caught I mean it's kind of boring in mundane but when you talk to we have a CIO of San Mateo County coming on one of your customers shortly and there's always a focus on cost when you talk about infrastructure vmware's got a very tough act to follow in it then it's because it it created such a huge cost savings by you know taking all the waste out of much of the waste out of servers so where does that next sort of wave come from there's certainly a lot of innovation going on we're seeing that is it things like hyper convergence what you guys announced this week can you keep that cost curve go is it volume with your you know 4,000 partners I wonder if you could talk about that a little because I'm sure your customers are beating up all the time how do we keep costs going what have you done for me lately Carl yeah absolutely it's a great question so it to your point you know over the last decade we brought our customers a massive amount of capex savings you know you take a hundred widget you consolidate that the tenders an immediate ROI there but you have to remember where you are now not just a computer chua zation company we're a data center automation company and we're taking the core tenants of the cat back savings that we brought many of our customers over the last decade and we're moving from compute and we're doing the same on networking and we're doing the same on storage so if you look at it networking alone right by implementing a technology like NSX as an abstraction in an overlay networking platform you don't need to rip and replace your hardware infrastructures to get network virtualization if you think about our customers who have a whole bunch of servers out there today and a lot of those servers have local did saan them most of them are never being used in VMware environment you're using you know an ass or a SAN storage array around VMware now you implement something like this and you can take advantage of all that unused excess capacity that people already have in the data center that is just three examples of capex savings we're bringing our customers so it's not just that we did it in compute I fundamentally believe we have the opportunity to do the same across the rest of the physical state of the data center now on top of that by implementing you know management automation orchestration and remediation proactive remediation tools across the software-defined data center we know there is massive capex savings and affects a great labor cost acting there you know we can take a server administrator who used to support you know a hundred physical servers now can support 500 virtual machines the optic savings around that is just incredible is the business case greater in your opinion I think with the software-defined data center the business case is even greater going forward because again we're doing it on the server but now network can compute and is the automation tools really start to take shape and form to manage the software-defined data center I think you even drive more value and you know even going back a decade ago everyone thought our play was really catback savings but if you talk to most of our customers why they got massive capex savings even in the early days the amount of affects a savings they got because of how we've implemented our technology and architecture in our data center was even greater than the capex savings so I think when you pull it all together this is a bias statement so i'm going to say i'm biased up front so you can't call me biased but i don't think there's a technology in the last decade or in the next decade that has driven more value both business value as well as Capital savings in the data center than VMware we're out to duty independent I would say the same thing another way Carl I mean it connect the dots there on the effects piece and also you guys do something to find data center hybrid cloud and and use a computer if those things all come home and and and and it happened the way you want you move to your next fail point so I got to bring up the globalization conversation if cloud goes down this path the consumption model will be I want by pay by the drink all surfaces and mobile becomes a huge deal so because globalization outside North America you have different issues data center clouds and I real sovereignty also so what's your take on that you guys have a huge base what's your globalization view in that piece if things start to start to materialize really aggressively you build on your base cloud comes home clouds happen in consumption but is happening what's the global strategy global impact I should say yeah so let me talk about our global strategy and then global impact so first of all vmware is very global if you look at our book of business today you know greater than fifty percent of our business is out in or outside of you know the u.s. and North America right so we're already doing very well internationally and how we go to market and how we're generating revenue across the company what you're talking about as the world becomes more and more global in the context of cloud computing how do we play into that so what we've done is we've taken our vCloud air platform and we said where are the biggest markets in the world for cloud computing it's the u.s. right it's the UK right it's Australia it's Japan it's China and if you look at what we've done is we've built out our own data centers we're addressing probably greater than ninety five percent of the infrastructure as a service market in the world with our vCloud air platform where we're not we allow our partners to do that those 3900 partners that we showcase yesterday on stage cover almost a hundred percent of the cloud opportunity so we're not going to do it ourselves we're not going to be in every country around the world but our 3900 partners are in over a hundred countries and we're servicing the cloud market opportunity directly and indirectly across vCloud air in the vCloud air network getting the hook but i want to get that partner thing is just to kind of get pivot quickly for quick comment on that AUSA to partner networks are huge they care about margin expansion and serving customers what's going on with VMware how's that going for the partners yeah so I guess it depends on which type of partner were talking about but I would say in general you know our partner ecosystem is alive and well and all you need to do is take a few steps down over there and go look at the solutions exchange floor and you'll see every technology company in the world that is either integrated or wishes to integrate with VMware in one capacity or the other and it is our responsibility just like we have over the last decade to bring our ecosystem along with us to enjoy the rich opportunity we see in the mobile cloud era the boots are big the booths are packed v Emeril's rock and i'll give you the final word but the bumper sticker on the show this year as the car drives away at down out of san francisco what's it say about vmware what's going to say in the bumper sticker that's a great question what do you think i should say Pat kelson had a good one brave new IT yeah well that's our motto it's the brave new IT but I actually think what it will say is let's go do it again we've had a hell of a journey with our customers in our ecosystem over the last decade and I say let's go do it again over the next decade and disrupt this market in a very positive way and break innovation and technology to market each in every year Kaiser by president and chief I promise of VMware making moves on the offensive vmworld 2014 we'll be right back with our next guest after this break thanks

live from San Francisco California it's the queue at vmworld 2014 brought to you by vmware cisco EMC HP and nutanix hi welcome back to San Francisco everybody this is dave vellante i'm with Wikibon organ this is silicon angles the cube cube is our live mobile studio we go out to the events we extract the signal from the noise and we're here at vmworld 2014 this is our fifth year at vmworld we're in moscone south of the lobby in the right hand side just before you get through the escalators stop by say hello fish motion is here is with HP cube alum you know I'm going to talk to your title you do so many things at HP technical background you do strategy you do product stuff so welcome back to the cube it's good to see you great thanks thanks Dave great to be here again we were we spent a lot of time together last week actually right we were in Boston yes doing the deep dive you had a bunch of analysts in kind of doing the kool-aid injection I thought it went really well you had a good crew there it was a very interactive session a lot of good feedback you know it was good i mean what you think yeah i thought it was great you know in my mind getting the perspective from folks outside a HP just to keep grounded and what the reality is i think is very key right and so we really enjoyed the interaction the feedback you guys provided us and the depth and time that we could spend on the topic yeah i was there only for the first day i told you i was out golf in the second day shut up but i got to hear the flash session and and then you know there was a little bit of discussion on software-defined but I think you guys went into that in more detail the second day so I want to start there sure the software-defined data center you know the what used to be called the software mainframe yeah don't use that term anymore the marketing guys took over from moretz and so we're now seeing that sort of instantiation what do you make of all that what's HP's sort of position on that yeah so Dave let me talk from our from a storage perspective right because the software-defined data center is a very broad area reservas networking so we look at storage there are two elements you want to think about in fact three elements you want to think about which software-defined data centers in storage the first element has to do with cost optimizations how do you get the lowest cost storage that's defined by software-defined storage that's hypervisor agnostic that's hardware independent and that is control orchestrated by industry standard offerings that's the first piece right then there is sort of like all performance optimized storage to deliver on a service level and instead of you know collecting masses of hardware to deliver that service level a lot of the optimizations are done in software so as an example priority optimization software to guarantee how much an application gets in terms of performance how do you solve the noisy neighbor problem or here's another one Pierre motion to move data between say a flash array and a tiered array for example right just because it's a different service level you want to accomplish with that without offering so so this notion of a service levels really key and the third piece Dave I think is this notion of orchestration right and I saw view OpenStack you had OpenStack announced but be aim where as well you know it's the tcp/ip of orchestration if I can use that term right you know you don't want to be able to orchestrate in a standard fashion just like you know we used to have decnet sna appletalk and then tcp/ip one out right I think we've got the same phase here with orchestration today right okay so the reliable approach to to orchestration that everybody can trust the trust everybody understands and and ok so now so so that's kind of the high-level what's your specific product strategy around software-defined sure so we can talk about two key products from a from a software-defined costs optimize we have the HP storevirtual VSA and the HP storeonce VSA right these are both virtual storage appliances that work on any story any hardware any server hardware right we of course will talk about HP servers but if you are running on a delta x only any x86 xne x86 right we announced support for 4 kb m on the store virtual we announced support for hyper-v install ones we also announced the store virtual offering being a part of the Helion HP Helion OpenStack distribution and if you recall he lien OpenStack is has both a community edition and enterprise edition right and so whichever edition that you get from Helion you essentially have now store but you'll be sa built into it ok so we know a little bit about helium we've had sargol I on a number of times on the cube and and we've seen HP's cloud strategy evolve so and we can come back and talk about that a little bit so relative to v san I got to get your take on on v san because there's so much confusion in the marketplace so Chuck also write a blog one day and you'll read it and say oh maybe sort of dissing the the competition and the next day it's like you know a lot of love and embracing but it's clear that one positioning for v san suu you guys are not just vmware it's more than just vmware but what's your take on visa and what does it mean for your for your strategy as an ecosystem partner that sells probably more vmware licenses than anybody i mean how do you yeah when you make it up that's a great question right so vmware continues to be a very close partner with us right i think the introduction of visa and evo rail i think it just continues to point to invalidate this notion of software-defined storage right in my mind Dave it's software defined and flash are the two key disruptors we saw that this year I think going into next year we'll see that sort of go even more mainstream right so you know I think it's great to see multiple offerings here validating what we've done actually with Software Defined before it was having cold software-defined right you look at if you look at store virtual and how we offered it right okay and and so just a natural progression of the ecosystem right and it's like VMware's the software vendor doing with software vendors do grabbing pieces of the stack and the hardware guys got to move fast you know hardware guys the two software got to move fast well I think it's going to be interesting right like like any sort of emerging technology as always a flourishing of offerings right mhm and I think that's the great thing about this it's it's choice you can say probably have different approaches and let's see which one wins out in the market in the end right all right let's talk about flash so you guys came out last summer flash announcement all-flash array based on three par and made the statement okay well we're not going to go buy a flash company we don't need to a lot of people myself included said well maybe don't need to but Meg Whitman said we're not doing any acquisitions certainly any major ones so you really have a choice so the question in my mind at the time was okay is this a bolt on a term that you guys used a lot when everybody was say no we have thin provisioning to you said that's a bolt on and you were largely correct and so I was skeptical and then when you came out with flash last summer the pricing was in my view not competitive now fast forward to this summer all of a sudden you're under two dollars a gigabyte your latency is down to best in class Wow okay what happened how do we get there so where are we with flash how all of a sudden did we go from really essentially a an okay product with a great stack that was really to your advantage as you had the stack to one that is now great stack competitive from performance and a price standpoint what happened yeah so David's been a great year for the last 12-18 months on flash right if I can roll back the clock a little bit and talk about some of the elements of change right I think to answer your question first what happened right there was a very big emphasis on flash we've had R&D developments over the last two to three years focusing on flash optimizations there were a lot of skeptics at first step said hey wait a minute you guys are a disk based architecture can you really do flash I think the proofs in the pudding right now right nine or thousand I ops 200 microseconds of latency write latency thinly duplication inline switch data services data mobility now you if you roll back and look at sort of what the rides been in December of 2013 we announce something called adaptive sparing right so we took now one very key flash optimization we took an 800 gig SSD drive and looked at how our provisioning was done unless it's do you drive and said wait a minute we can be a bit more intelligent village right adaptive sparing allowed you to reduce the over provisioning capacity that the drive takes so the net effect the customer was they got extra capacity at the same price because we treated the flash differently from say a traditional media right and so a lot of times i know i will tell folks hey you know if you're really flash optimized mr. vendor where's your adapter spearing right because here's a perfect example of how i can take it and rig a drive deliver our customer 920 gigs that's twenty percent more capacity free right that was back in december where we announce it after sparing this one of several optimizations we did then in june of 2014 we announced sort of flash for the mainstream right to gospel gigabyte we had ten deduplication teen clones 1.9 terabyte see mlc drives 460 terabyte raw capacity right five-year warranty on the drives 69 s guarantee we brought together a real collection of very very compelling i think features that allow customers to take flash to the mainstream right so far we've seen great uptake on that we'll talk about customers in a second we see not only just all flash deployments but people are the point traditional high nras like a monolithic v-max for example are we looking at that and saying wow you mean to tell me I can get the same performance same resiliency half the floor space may be less than half the floor space less power it's a very compelling proposition is that the competition vimax or is a competition other flash array well I think you got both IV about you got all the flash arrays you've got also high-end arrays and then you also have people that are looking for work load acceleration right consolidation so it is truly becoming mainstream because we're seeing multiple use cases mm-hmm right then fast forward to September it's just a couple of days ago we announced all flash 7200 starter kit for 35 thousand dollars average Street rice okay and you know if that was flashed on the mainstream this is now flash for the masses and my first flash array B let me use that term and here's where we're looking at that for Dave right so there are two kinds of buyers right one buyer says hey I have a limited absolute dollar budget Sam only got fifty thousand dollars alright so now you have an offering that gives you that that ability to go into flash they're also people that are saying wait a minute you know if I were to try out flash in my data center 35k is a very low risk invest right maybe it works great if it doesn't all right we'll move on right and so I think that's another very interesting approach to the way people are buying flash I you mentioned customers before so I was going to ask you how's the uptake have you seen you know since you've made the new announcements have you seen a big boost in in demand and you know get any proof points that you can share with us yeah Dave's we'd be seeing great up take lots of interest lots of the man let me talk about three customers today okay so let me start off with lattices lattices is a cloud service provider there are managed hosting provider and they were looking for high-performance storage to maintain SLA s right and in addition to sort of guaranteed high performance they needed the ability to ensure that they could offer customers a consistent and guaranteed performance level as well as a very performance level right I may come in with a bronze service level that I need and I want to pay for a bronze service level versus say a gold service level where I actually want to be able to offer that service so lattices put the three-part 7450 and and then this piece of software called priority optimization to do exactly that they also use three part because of its unique multi-tenancy features where you can run mixed workloads you can consolidate different types of customers on those workloads that was key for lattices and then what they said to me was provisioning now took hours instead of days orchestration was quick and and it was easy right that was the big thing for them it was simple to use number two Nuance Communications I don't even know the company yeah sure nuance they make dragon well the dragon speech recognition is off later there's a lot of Apple iPhone Siri local companies on the back end hello Pocoyo for ya so nuanced does speech recognition software and they actually help in the case of Apple iPhone Siri are non-native speakers right by recording their voice patterns and then helping recognize those watchbands right be especially with non-native speaker now they use that 7452 index those voicemails very quickly to deliver iPhone Siri service to improve improve recognition I mean you remember when I found first came out it was the Serie was awful you couldn't even use it and now it's so it's better over time right yeah that's great case use case their third one is exact target and you know exact target is a marketing demand generation company they they have a huge number of databases in fact some of the stats that they share with me was four trillion rose under management they do 21 billion rules that day 100 terabytes databases are not common uncommon in ExactTarget right and so they have multiple three power raised to to to store this data and and they deployed both cheering with flash as well as all-flash arrays right and the biggest thing for them was how do they adopt flash without ripping and replacing their infrastructure I have an existing infrastructure they want to be able to add flash to it to accelerate performance lower costs and then they also now viewing all flash for vdi right so exact target is a perfect example here of a three-part customer being able to extend an embrace flash without doing a lot of change 3par the gift that keeps on giving I always say all right there's we have to leave it there thanks very much for coming to the cube I was a great dump to you I keep track everybody will be back with our next guest this is the cube we're live from vmworld 2014 and we'll be right back you

live from San Francisco California it's the queue at vmworld 2014 brought to you by vmware cisco EMC HP and nutanix now here are your hosts John courier and Dave vellante okay welcome back at when live in San Francisco here this is the cube vmworld 2014 our fifth year I'm John furry with Dave a lot the extracting the signal noise we love talking to the executives the entrepreneurs the VCS all all the action is here on the ground ball tickets our next guest Eric Herzog the CMO and I think you're running biz dev as well yes is Deb for violin memory systems violin is went recently went public now on a complete transformation you're at the helm there from EMC so you know a little bit bout storage and flash welcome to the cube well thank you very much i always enjoy coming to the cube and doing it now for four or five years it's been great guys do an outstanding job we really appreciate it one of the things we're excited about aussies flash and every gets move them up here that's been in the storage and the periphery of stored with cloud and hybrid cloud is raving about the economic disruption of flash the performance of flash flash is super hot now doctors getting a lot of the press right now cuz the deal but still flashes at the under the hood that's where the action is so what's the update give us a take on what's going on in flash in violin what are you guys up to so the big thing is flashes at that economic tipping point so if you go back to late 70s and early 80s as everyone remembers everything was taped all the data centers were taped hard drives were more expensive they were faster and you got to the economic tipping port we're using a hard drive base to Ray was much better than using a tape subsystem than tape became backup archive which is still great at tape in fact I saw from one of the analysts who tracks such things that tape is actually still the cheapest media I don't see any CIO rushing to the all taped data center so what you've got now is flashes at that economic tipping point that between the savings and storage server software licensing power rack space floor space etc that when you do the economic analysis you can just literally do with the calculator pay is to go flash in fact flash is almost free these days so certainly the economists are ridiculously amazing in terms of cost now on the performance side you're starting to see some segmentation yesterday were talking about capacity flash and performance flash what does that mean I mean I was how they different off is it flashes flash but you started to see these conversations that are being kind of workload specific is that where it's going we still in the flash adoption phase what's your take them now we're anthem at the maturation phase flash is shifting away from everyone assuming it's the same just think of the old hard drives you know even today got 7200 rpm 10,000 RPM and 15,000 rpm and it really makes a difference as you use those various capacities and the various perform em extra around them flashes and it's all the same medium same media same heads but they make changes flash is doing the same thing there is people focusing on performance flash violin being one of those we have one of the highest performing systems out there as measured by not by violin by third parties and they got other people that want to go would all say cheap and deep flash not as cheap as hard drive but let's make flash you know faster than hard drives but not uber fast and so you could put other workloads on it that are more capacity sensitive than performance sensitive so I want if we get to unpack performance a little bit so people talk about I ops they talk about latency how do you guys look at performance how should customers be looking at performance so it's really a package okay the number one enemy of most applications particularly in mid up to global enterprise is absolutely latency so I ops is important but if you don't have good latency I ops don't overpower that so you need to have both good I ops and really strong latency in order to optimize where that be an Oracle workload at sa p workload a sequel workload those types of workloads often are very latency sensitive the lower the latency the better the application functions and the more you can do with it so so who are the kings and queens and princes of latency you would put you guys in that mix and we are in that category we can guarantee under half a millisecond latency or five hundred microseconds whichever term you want to you is whether the array is empty or full we also have some customers that have done some host-based aggregation in production and we have one of the 25 largest companies in the world with multiple petabytes in production they aggregate on the host side are arrays and they're able to deliver to millions sustained I ops regardless of workload across all those petabytes and point 15 millisecond of latency now that's not what we claim on an individual array the spec sheet so they're really getting it and they've proven it to us several times so you know that's in the performance side of the equation so latency I ops bandwidth snot as much of an issue because bandwidth obviously you can get off a hard drives and hard drives are very good for high-bandwidth situation you're not going to use all flash in meeting or attainment applications or an oil and gas or a lot of the genomic research stuff because it's very bandwidth intensive and you could get great bandwidth off of low-cost hard drives actually and create you know giant mass cluster for example is better in those workloads but in database workloads virtualized workloads for example we have a customer that on a certain physical server had 14 vm virtual machines they then used our flash and they were able to get 50 on the same exact physical Hardware same size virtual machine same I ops for that those virtual machines and go from 14 to 50 just by switching to flash same vm was VMware same exact server infrastructure all they do is swap the storage out so that's an example of how a you get the performance and be you also get the economics because obviously putting 50 virtual machines on the same physical Hardware saves you money so I would think the big benefit to is consistency all right so you hear from customers are just give me consistent predictable right moments right so while you're in the same thing from customers yes absolutely so what you have when you look out at the flash world what you're going to see is certain people have a right cliff and what happens is when you hit the right cliff or they're going to have unequal performance they'll be better than a hard drive system for sure but there they'll still get a sawtooth not as dramatic as you'd see in a hard drive subsystem but sawtooth what we do is we guarantee consistent I ops and since latency whether the array is empty half full or all the way full and very few guys in the off lash community can do that I want to talk a little bit about the the stack so you came from a company you were running you know very senior executive at emc within the mid-range business VNX awesome stack been around forever a lot of value in that stack takes a long time to harden a stack a lot of the flash guys you know you guys included came out you solving a problem start selling stack takes a long time to mature so how should we be thinking about the stack so raid stack is always crucial you know rate is not just about performance redundant array of independent disks its number one function when raid came out quite evident across the bay here at UC Berkeley was for resiliency so that's the number one thing that a raid stack does the second thing it does of course is give you performance as well because you aggregate whether it's hard drives or flash drives or hybrids you aggregate the performance across the pieces of media so I think one of the benefits you're going to see from certain vendors in the flash base we being one of them is we have a long history we're on our fourth generation flash configuration and we basically rev our generations every two years so we're looking at a raid stack that's in the eighth year time frame some of the other flash startups you know they've been shipping for two years you have a two-year-old raid stack an eight-year-old raid stack has got much more resiliency it's got more test time for us in particular our sweet spot is in the upper mid to global enterprise if you look at the fortune global 500 list over 50 of those customers use violin which when you're big company is one thing when you're a small company like us to have 50 of the global fortune 500 using your products it's got to be pretty resilient in the stack or they wouldn't be using it I mean I was on it I probably spoke one-on-one or maybe one on 2132 over 500 customers in the first half of this year and the on flash and i would ask every one of them who's used an all-flash array and it was actually pretty low penetration still right not surprising violin came up a lot TMS came up a lot I mean not and then and then pure a little bit and then you know bits and pieces but violin was consistently there's guys did a good job early on getting into this space but I want to ask you about sometimes I call it channel ft the urinary Olympics and particularly around data reduction and so you guys are now you know throwing your head into that ring how should we be thinking about sort of data reduction compression d2 obviously drives pricing down rank it helps create that that's I think part of the reason why we're at that tipping point that and you know ml see how should we be thinking about data reduction there's a lot a lot of you know finger-pointing in line not in line post process give us your point of view so the bottom line is dated ed will help you in two primary workloads virtual desktop and virtual server okay beyond that it doesn't help you compression helps you in database oriented workloads and there are certain data types that are not compressible at all so for example mpegs JPEGs and other data types are not compressed with all their already pre compressed by the nature of the data type so everyone needs to be wary that just as when you get your miles per gallon when you buy that brand new car it will vary and it will vary by workloads so if you've got a workload that's heavily already compressed you're not going to get benefit from anyone's compression including arms if you've got a workload that's already been d duped you're not going to get a benefit from anyone's d do so you have to segment your workloads I think the other thing Dave in addition to what's driving that price point which is compression and D do is multiple workloads so for violin in particular our average arraign we've already publicly talked about this our average array shipping is well over 30 terabytes that's not true of a lot of other guys when you've got 30 terabytes with the average database being four to five terabytes people don't put one database on our stuff people who sell five terabyte arrays and a recent large coming just announced the new five terabyte array they're going to put one database with us at 30 to 40 terabytes average people run three four five databases does anyone really buy a vmax or a netapp 8,000 class or a high-end IBM box and run one workload on that in the hybrid world or in the hard drive world no but that's now that people are running multiple and mixed workloads on flash arrays that plus the dee doop and compression is driving this economic switch over and why flashes the right choice for your data center well you guys do obvious do a lot in database generally and specifically oracle database via Oracle's big on pushing hybrid Columba compression and trying to lock out its competitors for grants abating in that what are you seeing there in Oracle environments and I've again I've talked a lot of customers and the the instances of hybrid columnar are still very limited right in theory on the road map how what are you seeing what are your thoughts on that what do you talk to customers customers must say well you know Oracle's locking you out you know how about I just a chubber a couple things first of all on the price points it won't matter because people run violin arrays with mixed in multiple workloads already so even if you want Oracle stuff if you were to buy the Oracle if you're going to buy Oracle compression or compression to any of the database from the database vendors themselves for us it's still benefits us we don't sell a lot of five and ten terabyte arrays we sell lots of 30 and 40 and 70 tera byte arrays we can even scale are raised up to 280 terabytes which most the other guys can't do and I'm talking now raw capacity not d duper compressor capacity at the same time while the database guys are trying to do that one thing I'd encourage the end users do is just look at the list price it's available readily Oracle's is available it's a pretty high ticket item so whether it's violent or any of the other flash vendors that have compression it won't compress as well as Oracle's will or any other database vendors but the price is pretty high so if you get reasonable compression from a storage render it's going to be a lot less expensive than using that from the database vendor down maybe the database vendors an Oracle change their strategy but right now it's a very high ticket item and when you get it from the storage vendor and even if it doesn't compress as much it's still a lot cheaper so you'll have to take that as part of the financial analysis when you're looking at your database deployment now you made a big personal bet on violin I mean you and I i was there in the front row and you announcing the latest sort of v NX which is a great announcement I mean it was you guys ticked a lot of boxes it was a lot of hard work and I realize that but my one big question was what about all flash like well we have all flash too well you said all the right marketing things and then you know several months later here you are at violin big personal bet all right you have senior executive at emc years not bad I know a lot of travel but you know pretty pretty good life hey yeah a lot of a lot of people working with you for you you know a lot of great customers why'd you make that that choice so a couple things first of all violence got an incredible set of customers when they divulge the customers to me under NDA I was like shocked I couldn't believe who the customers were you know I worked at IBM as well as EMC so of course all the big boys are your customers and they always will be but the number of really big companies they had was very impressive incredible technology this year has been all about the software stack which violin has been very mediocre at now it's got a whole set of software potential and as you know Dave I've done seven startups five of them been acquired and I can smell a stinker this is not a stinker so it past the fume test after doing seven startup so it you know feels like the what was that attraction obviously the IPO went off without a hitch right in terms of at least going public but it stopped in climb there was a little hitch excuse me absolutely being a low I'd like violent emerging player also the market team is huge yeah so that's I mean one market opportunity so with that kind of the IPO stumble if you will you still came on board yes that was not an issue for you like okay I'm going guns blaring well in addition doing seven starters I've done this is my fourth turn around and all of them have ended up very well IBM wat one of my turn arounds i was at mac store as the senior VP of Marketing when CJ Mack store that was another turnaround although be at a very large company obviously mac store at five billion at the time of the acquisition but done a number of turnarounds as well so it's it's an attractive thing to do it's a fun thing to do you feel you could really do this yeah the park I know I'm a good man but I'm not that old yet yeah it's pretty straightforward you get the customers give them some good product collect some cash do it again well I mean it's all about execution you know and violin get a lot of really great things they did really well by the customers customers love them great tech support great field support the SE teams even a group of consulting engineers and all the consulting engineers actually RX oracle and microsoft guys know their learning story but they know all about the database community and we got a couple guys from actually ex vmware guys as well so that's that's a big thing but I think the key thing is you got to execute on all cylinders and we had a great technology leadership group that did the first set got the company to the first hundred million but it wasn't the right guys to grow the business make the visit and by the way you guys interview VCS all the times you know it's very common you get to a certain point and then the founding executive team sort of needs to move aside great technology guys but not the best business men and that's a strong attraction we're just talking some VCS up here some tier 1 Greylock and any a move the question that came in over text and the day was texting me that we wanted to ask was you know at these big valuation the private companies it's hard for the employees to make money so the silver lining and your opportunity is there is a lot of growth opportunities and money-making opportunities for the management team and investors right so so that's a good position to attract some town yeah that's well that's the that's the appeal yeah when you think about there's certain guys that are really good at IBM EMC Microsoft HP VMware and they're never going to do well in a start-up you got other guys that are hybrids can be big and small company and the attraction for those that can do both is you can bring the seasoned management that you learn at an IBM and EMC a Microsoft a VMware bring that to the small company which has great technology would often does not have the discipline and rigor that a big company does and what you have to do is bounce the drive for new technology and new customers with the business model and not become overly bureaucratic and that's the attraction of a turnaround as well as guys who do lots of startups is to be able to do that and grow the company and the key thing has got to grow it properly and that's the upside well you're getting your track records phenomenal we've been following your career tech athlete for sure now Wall Street you got to kind of do the dance and you know keep keep nice and get these guys back to snap them in line right that's kind of the key focus to as well right yeah it's it's about financial execution right now we brought out a whole bunch of new products our windows flash array in line to you to compression a whole class of I'd say unmatched enterprise class data services in the off flash erase space and you've got to be able to leverage all of that and that's a key thing you've got the technology if you don't execute on the business side you know you go out of business and we've got the right team in place now to take the technology where it needs to deliver the business value to the shareholders and the and the stockholders Eric herzlich CMO violin memory systems you know my philosophy in my experience although you know not as extensive as yours is in a growing market a few missteps can be rewarded with great product so you guys have certainly a good product to get a mulligan with a growth market wind behind your back so congratulations seeing things on track and really exciting to see good company this is the cube here at vmworld 2014 right back into the short break

live from San Francisco California it's the queue at vmworld 2014 brought to you by vmware cisco EMC HP and nutanix now here are your hosts John furrier and Stu minimum okay welcome back around here live in San Francisco for VMware 2014 this is our fifth year with the cube extracting the city from the noise at vmworld always a pleasure and we have the chief marketing officer Robin Matlock here inside the queue of my Coast stupid minute for this segment Robin welcome back to the cube thank you great keynote this morning you opened it up in front of a packed house for Pat Gelsinger and delivered an amazing keynote before we get some icky knows what some of the stats with the show here obviously vmworld it just keeps getting bigger and bigger and bigger every year well you know it's amazing the energy is fantastic here this year we're going strong we have well over twenty two thousand attendees the solutions exchange is packed there's about 250 companies that are they're exhibiting we have all kinds of breakout sessions and content I mean if you just walk around here the energy is just really thrive and the theme is no limit so I got to get some a back story on the theme I'll see no limits breaking through this is the transformation market the sign is just break it was a quick taste of wow how this all came together yeah what's the meaning behind the pictures are they're all on the hall you know it's really fun the themes that every year actually put just tremendous effort into them they can really be stressful but at the end when you land or right when it feels so good this whole notion of concrete you know in breaking through and that there's something on the other side that is truly infinite for us that just really spoke to our business it spoke to what our customers are going through and it truly spoke to the potential of this incredible you know this incredible industry you know i was when i think of the No Limits I think about the space jump the Red Bull I think about some of the things with it within the cloud that developers are doing you know Pat mentioned uber they have no asses of mass evaluation of hurts and to cumbies combined this is the kind of dream that entrepreneurs think about is like this is this inflection point stuff right so is that was that some of the vibe you guys were thinking absolutely and I think when we look at where we are in our journey relative to cloud relative to a software-defined world we're really passionate that you know the customers and the attendees of this conference are very well positioned to truly break through some of the silos that have been holding us back for a long time and we are at Crossroads um you know we believe vehemently that the data center is destined to be software-defined and that many of these attendees are well positioned to take us on that journey so I got to ask you because I see you're involved in the brain trust and all the formulation of the strategy the company and out of how to communicate it's always a challenge when it's like a moving train of innovation but you have some new things going on this year first of all nothing new on strategy it's the same marching orders with with Pats cadence hybrid cloud you know March to that cadence ops ii server defined data center but now AirWatch comes on over the top how did that affect things for you or did it it's just more of more the same so actually they bring in there some of that security and the apps piece of the business did that change some of the thinking and all I know it's an interesting question but I think at the end of the day the three strategic priorities for VMware have been very consistent now for multiple years you know largely under Pat's leadership it's about a software-defined world that's the software-defined data center it's about extending that to the hybrid cloud and it's always been about end-user computing I think the air watch acquisition just took it up a couple notches really the world of mobility we're big advocates and believers that the mobile workforce is exploding but there's a really strong connective value between what's happening at the infrastructure layer and what we can do to enable that mobile workforce so I think it was very consistent with the strategy but I do think the air guac acquisition is changing the game it's certainly producing Pat was giving us a little taste on the cube talk about the steams of the show today we had Pat had bill father's Carl up sure do a little Q&A a little little cube action almost on stage with Bill and what's what's tomorrow did you guys bring it up by thieves share with the folks out here Shey lay the land here what's the what's the contracts for tomorrow so today what we try to do is really telex the expanse of entire story what's going on holistically and you know the Karl part of it was a lot about getting our customers to really talk about what's working for them I think that's really important because we laid out a vision for VMware um you know a couple years ago and it's important to make that tangible and real and I hope the customers were able to bring that to life for people tomorrow is all about the technical under the hood let's get you know inside and really understand how the technologies are delivering against that vision and we're going to go through the whole thing it's going to cover the infrastructure it's going to talk about the hybrid cloud and we're going to talk a lot about mobility well the geeks want under the hood I mean it gets a gig show the end of the day it's very content rich at vmworld as we know it super busy a lot of parties going off as Deb going on certainly the business transactions are happening but it's still a geek show you guys have preserved that here right you know if we ask ourselves every year you know how how and should or shouldn't we evolve vmworld and i tell you we're really resolved at the end of the day this is largely a practitioner show they come for technological information education certifications and we have no desire to take a square pose and put in a round hole I mean it works so well for this audience let's just give this crowd what they need and I want to do more of it year after year yeah and we can always tell how good the conferences are in terms of content based upon how much Twitter activity there is in terms of like if people are just talking a lot on Twitter and not say anything that means it's kind of a boring show when there's not a lot of Twitter activity mostly it's text sessions people have too busy running around between between the events I mean are you guys seeing the sessions packet but we haven't had a chance to go out there what's happening yeah well to be really honest I haven't at a moment to scan too much but from what I'm hearing they are overflowing and frankly they were booked you know even before we showed up today because we do give people the schedule builder and a chance to book their sessions so I know that they are all full we're doing repeats we're trying to get you know more breakouts so people can deal with Wednesday and Thursday as things settle down but all the reports I'm getting so far is that we are pretty much over sold and oversubscribed yeah so buds do you Robin I was just gonna say you know is my fifth year now coming to vmworld it's all we impressive just the passion of the people in the virtualization community it's such a good community everybody gives back I really like what you guys did with the charity event that's going I mean what's a destination give by 25,000 with 250 oh not twenty five thousand two hundred and hundred and fifty thousand dollars that that's fantastic you know I got to talk to the hands-on lab guys today and things were running so smooth and so many people do it because as John said the geeks really love to geek out here I noticed it looked like on the badge it had you know the show spread out beyond just the north south and the West you brought the analysts kind of off to off to a hotel because they don't need to be in the center of all the geeks and everything the show floor is cranking as usual so you know it sounds like you still have the core and just pieces add on to it yeah i mean the core of the program if you were to look at breakout sessions keynotes labs that's going to stay right here in moscone but the reality is we're bursting out of the scenes and we love San Francisco we loved the venue but we have to take advantage of all the hotel space around so we got things at the w we got things at the westin we got things at the marriott we got things at the Intercontinental I mean we're or everywhere frankly but you're right we are having to kind of spread out a little bit so I got to ask you about the 10-year anniversary because that was a pretty epic event and you mentioned you made a comment on stage where'd that world go and i love the Golden Gate Bridge metaphor you put together what's changed for you over the past year it seems to be like it seems like seven years ago internet years it seems like a decade ago almost from last year yeah a lots changed and you share your perspective yeah I think a lot has changed I think on though um to be almost all for the good in my view I think you know VMware had built such a business on kind of one core platform which was compute virtualization and over the last several years we've really broadened our wings right and we are now dealing with networking and storage and security and automation and cloud and mobility and I think the diversity that that brings um from a customer perspective from an ecosystem perspective from our routes to market perspective I mean certainly it is definitely a charge because there's just so much tremendous diversity it also means we got a lot of things to cover so you know I think with that comes a responsibility to make sure our customers can understand all these different diverse you know offerings what's your objective for the show what's your preferred outcomes you can look back and just fast forward to thursday evening friday morning you know you're in a hot tub relaxing maybe it's saturday or monday morning what do you want to have happen what's your ideal outcome for vmworld beyond the fact that i like my feet attached to my body because right now i'm afraid they might fall off but let's say personal attributes aside you know i really hope that these attendees you know 22,000 plus people get on those airplanes fly home and feel like they had one of the most invigorating educational inspirational experiences professionally that they're going to have all year I hope that they got to the content that was relevant for them that they were able to navigate and you know really spend time in the areas of focus for them and I hope that people met dozens and dozens of new people that will only help them broaden their career so I have this little prop I brought because I was attended the VIP event you guys had an amazing event mark injuries since the NBC was broadcasting there Joe Tucci was there and then you know opening up your new facility which could have been around for a while so we've got some new new areas got these hot pens there so I'm going to ask you about the culture and the brand future brand for vmware I mean it's an amazing campus eco-friendly beautiful design high quality is this the brand of VMware that you seeing vision for me and you what's your vision for the brand I mean it's evolving in in real time for the company it is evolving but at the same time I think our brand and what we stand for as a company is also very stable it's great that you came to that event and saw the final unveiling of the last building as we finished it up and certainly it's a beautiful campus and it's green you know it's very you know natural woods and doing all kinds of things to protect the environment I think at the core of VMware there's you know five key values and those values are sustaining the test of time you know it's about innovation it's about community it's about people it's about integrity and it's about our customers and I think really no matter what products and services and solutions we wrap around our company I think we still stand for the same core values and I hope that never changes so I got to ask you out the community I think it's one of those things and you know something to pat about how doctor is implemented community aspect of the open source of their product and made them success you guys have had great community over the years really part of the backbone of vmware versus other companies some don't even have a heartbeat to a community you guys have a great thriving ecosystem how do you maintain that as we get more connected with the crowdsourcing with the Twitter expansion and all the people talking and it's not just forums anymore it's and more it's it's it's a virtual event every day it's like vmworld every day out there how do you handle that what's your vision and how you going to get your arms around that going forward well it's yeah I think it's really critical first of all just like anything whether you're talking about technologies you're talking about engaging with customers you have to evolve you can't use the same techniques that you use last year really to propel you next year so I think it's all about making sure you understand how our customers choosing to engage and then embrace that for us our social channels are really important our communities are really important and we're all about enabling facilitation and engagement and I think we're really that's kind of philosophically how we go about our whole social strategy it's all about enablement so that's a personal question for you to you always loved your eye for you know detail remember the first VMware we did you had pointed out the vmware stickers which ended up being perfect camera location ibly I like her I like this Robin woman she's awesome but what are you excited about now I mean what are you personally motivated upon right now what gets you really excited about the tech industry about what you what you're involved in what's the what's the one thing that get you so excited you know frankly I'm extremely proud to be the CMO of VMware I think there was a great company and I think we're part of something truly meaningful I think there was a time when maybe we weren't going to be as relevant we and by we I don't mean to see him or I mean this this whole thing that maybe we weren't going to be as relevant in the next decade but we collectively as a mystery are making bold moves we're doubling down on software we're pushing the boundaries of the data center we're getting out beyond compute we're going to storage or going to networking we're looking at security we're layering in automation and I think we are really securing our future as an industry that we are relevant and we need a seat at the table a strategic seat at the table and I'm thrilled to be a part and you certainly the global footprint the virtualization has been a great part of enabling that that mindset great to have you on the cube any other tidbits about the show you'd like to share the folks you know I think the main thing is just get involved and try some things that are different push your own personal boundaries explore there's so much content there's so many networking opportunities there's breakouts and I think definitely sampling a little bit of everything and making sure that you go home exhausted and then I'll be happy but certainly is exhausting show but Pat brought up the whole brave concept that's really about bold moves writing that's about that's kind of the whole theme here right yeah I think you know the notion of bravery is in the sense that given that things are changing so rapidly and the world is so dynamic and fluid as a business climate it's going to take some calculated risk you're going to have to really decide where are you partnering where are you betting what kind of steps are you going to take and I think action is key and the one thing it probably isn't going to work is status quo Robin Matlock the chief marketing officer for VMware keynote speech this morning set the table for Pat Gelsinger great jobs at the big picture laid out everything out the holistic vision of VMware continues to thrive thanks for coming down the cube always great to have you it's the Cubist retin from the noise we'll be right back with our next guest after the short break great thanks John you

(upbeat music) >> Live from San Francisco, California, it's theCUBE at VMWorld 2014. Brought to you by VMware, Cisco, EMC, HP, and Nutanix. (upbeat music) Now, here are your hosts, John Furrier and Dave Vellante. (upbeat music) >> Welcome back, we're here live in San Francisco for VMWorld 2014, I'm John Furrier with Dave Vellante. This is theCUBE. We expect to sue for the noise, get the tech athletes in from CEOs, entrepreneurs, startups, whoever we can get that has that signa. We have Pat Gelsinger, the CEO of VMware here in the house. Pat, great to see you again, great keynote. >> Hey, thank you. >> You've been a great friend of theCUBE, five years now running, just want to put a plug in. >> Five years? Wow. >> I want to thank you for this amazing gift of pens we got from the VMware Opening Campus Day. Great pens, celebrating you guys opening up, officially, the Palo Alto campus, how's that going? What's happening with the campus? >> Well first, the campus opening was great, thank you for joining us there for it. It really is just a fabulous place. I mean, a beautiful campus, and we have the greatest employees, so we wanted to give them the greatest place to work. The campus has gone fabulous, we've opened up almost all the buildings now on campus. Just two more to build out, and we're hosting all sorts of wonderful people who want to come in and see the coolest place in Silicon Valley now. >> It's like China over there. New cranes going up, and putting new buildings up there. Are you guys done with construction there? What's happening? You guys are expanding like crazy. >> Two more buildings to go. >> (laughs) Two more buildings to go. >> Then we're done for a while, so (laughs) almost there, almost there. I got worried when there's so many cranes going around. Do I need all my employees to wear hardhats or something? It's like, no, we're soon done with that, and we can get everybody to work. >> Robin kicked off the keynote before you came on, she talked about staying the course, and use a computing hybrid cloud server to find data, so then you came out and laid out, essentially, the vision of this transformation that's happening. What's the state of your vision there? Expand on that keynote, and share with the folks who might not have caught it live. What was the crux of the presentation? 'Cause it had a lot of Pat Gelsinger vision, it felt like it's transformative. We've even had some guests on talking about commentary, the announcements. Are they playing defense, offense? You're not a defensive player. You're an offensive player. So talk about the offensive moves for VMware, and how that keynote struck a chord there. >> The first one really started with this phrase, "brave, new IT," and the nexus of that was all of our VMware faithful. The V admins, the people who've been using this. They are becoming critically important to the businesses that they serve going forward because not only is it about them doing their job, but with SDDC, Hybrid Cloud, end-user computing, it's them redefining the entire infrastructure for the business. And when the CEO looks down, across his leadership team, who's the most competent person there to navigate through all of these IT trends that are merging to, necessarily, redefine their businesses? And we call this liquid business that's changing. So very quickly, we're seeing that businesses redefine themselves from education, to government, to transportation. Uber, today, not owning any assets, has a market cap equal to that of Hertz and Avis combined. We're just seeing these things emerge so quickly. And who's the smartest guy in technology in the room? The IT guy. Out of that, we laid out, obviously, our continuing progression with the Software-Defined Data Center, updates on major projects, bringing those components together in a big way. One of our first, and I think, most significant announcements today, was a lot of the choice announcements. We are adding an OpenStack distribution, so if you're a vCloud user, I'm going to have the programmatic ability of infrastructure through the OpenStack API's, you now get it with VMware. We also announced an embrace of containers. Containers, this 20-year overnight success where all of a sudden, lots of discussions around containers, and how can I use containers as a new app delivery model? Well, the best way to deliver apps for an enterprise, on top of the VMware infrastructure. So we announced a relationship with Google and Kubernetes, with Docker, one of the leaders in that space early, and how we're going to make them containers without compromise in the data center for enterprise customers. >> On the container piece, last year, we asked you, here, on theCUBE, about Docker and containers. You were like, oh, containers have been around for a while. What made you go, hey, this Docker thing's got legs? Was it the community thing? Part of the Open Source tie-in? Was it the interoperability? Containers is not a new concept, as you had pointed out, but what's changed for you and VMware over the past year to make that happen? >> And it still is very early. Let's be clear, John, that we're very much in this early, nascent phase, right in the hype cycle curve, you know. We're way up, we're probably going to go through the valley of despair in this technology, but very quickly, there's a broad set of these third gen developers that are saying containers is a cool way for me to package, deliver, and manage app deployment over time. We're saying if that is how people want to be able to deliver apps, then we, the preferred infrastructure for delivering apps, we're going to embrace and enable that, as well. So very quickly, it came together, and we engaged with Docker and Google as partners, and they said absolutely, we want to partner with you in this space, so all of the pieces just snapped together overnight. We've been working with them, making meaningful contributions in the space. >> That's a DevOps ethos, right? That's basically a cloud, right? >> DevOps is a funny term. It's funny, I had a bunch of my guys at the DevOps conference here, you know who was there? It was all IT guys, not developers. It's really a progression of developers to DevOps into IT, and we really say that DevOps is where developers and IT come together. We really are trying to enable DevOps to satisfy the business guys. In fact, go back to my brave theme. You're seeing Shadow IT, and developer, and line-of-business go around IT, and IT is now being through announcements, like today, armed with the tools to go to developers and say, oh no, I'm your friend. >> Step out of the shadows. >> I'm going to enable you with the coolest, most efficient infrastructure, and I'm still going to have it secure and managed, as well. You don't need to be running in these environments that we can't scale, manage, and secure. Your apps, now, can operate in an enterprise-worthy way. >> That right once run anywhere concept is very powerful, is the premise, if I understand it correctly, that you'll bring that enterprise capability, the security, and other management capabilities to that concept? >> Yeah, the VM doesn't change. We're adding Docker on top of the VM, and enabling it with some cool, new technologies, like I mentioned, Project Fargo, that actually make that delivery of the container on the VM more efficient and lighter-weight, than a bare, metal, Linux implementation of Docker. That's really powerful, it's really cool that we can do that, and we have some cool technologies that we're showing off that enable that, and will be part of our next major vSphere release. >> So you touched that base, you touched the OpenStack, you got some action going on there, and sort of, embracing, OpenStack. More developers in OpenStack. VMware has a touch act to follow when you think about the whole where we've come from. It seems so simple now. Servers underutilized, you had a 10x disruptive factor. Now, you've got to do it again. I remember Moretz used to talk about this deeper business integration. He'd talk about it like this was grand vision, but you actually, now, have been executing on that. Is that where the next wave comes from? That deeper business integration? You talked about transforming infrastructure, so how do you do it again? Is it a cost reduction, is it a business integration, is it, as you say, transforming that infrastructure? What does that mean to the customer from an operational standpoint? >> If you're the IT guy, do you want to spend a lot of your time worrying about the infrastructure? Actually, what you want to do, is have this programmable, scalable, flexible infrastructure that enables you to go worry about the business problems, which are in the apps. Because you want the IT guy spending all of his time, and most people say, how can I do new application services? How can I enable new business models, et cetera. So he wants this flexible, programmable, secure, managed infrastructure, and he wants to worry less and less about it. E.g., it needs to become more automated, more efficient, more scalable. And we walk into that discussion, say, you know, we've earned the right, CIO, because we've demonstrated more value, more efficiency, more quality of software, and we now have 80 percent of the world's applications running on top of the software that we do enlist for you. We've earned the right to show that we can do that for the full data center. To be able to do that both on and off premise, in a reliable, scalable, managed, and secure fashion, so that we enable you, Mr. IT, to go deliver the environment for the developer. To deliver the environment on or off premise, to secure all those next generation devices and applications, as well. And that's what we're off to do for you, and we deserve a seat at your table to help you do that. >> The Federation helps you with that seat, although, you guys got a pretty big role in the Federation. >> Yeah, yeah, we do. >> I wanted to ask you about the financial analyst meeting, did you get a lot of questions about that? About the whole spin-out thing, and how was that addressed? >> Actually, surprisingly-- >> Didn't come up? >> Not a question. >> 'Cause it's already come up. >> We've talked about it before. Largely, EMC is addressing those things. We've been very proactive in our position. We think the Federation is the right model. It's working, it's delivering value, we're quite committed to it, and we're showing quite a number of cases where we're adding value, as a result of it this week. We announced EMC as one of our EVO:RAIL partners. We announced the ViPR-based object service for the vCloud Air service, that we announced this week. Announcing new solutions that we're doing with them, so lots of different areas that we're just demonstrating the value that comes from the Federation. >> Well, we know Joe a little bit, we know that's not going to happen anytime soon. So what kinds of things did come up? Were they nitty gritty things around enterprise license agreements, 2015 guidance, share with us what you guys-- >> Lots of questions around 2015. >> And you guys shared a little bit more, maybe, than in the last-- >> We gave them framework to go look at 2015, lots of questions about the strategies that we've laid out. How well this NSX thing play out? How rapidly is that going to grow? vSAN, how rapidly are you seeing that grow, as well? vCloud Air, how are you going to win in that business, and do it in a margined, effective way for VMware? And how does this vCloud Air network partnership work? Based on that, how should we look at your growth profile going forward, with your traditional business, as well as these new business areas, and what's that going to look like over 15 and beyond? So those are sort of the nature of the questions. >> The Air piece is interesting to John and me because we've been trying to parse through, on a long-term basis, you guys are software everything, you talked about that, at quite some length, and the business model's great. Marginal economics, go to zero. You see some of that happening with the public cloud. The traditional outsourcing is starting to fall, that software marginal economics line. My question relates specifically to how your, whatever it is, 4,000 partners, can you replicate that kind of marginal economics at volume, or is it more of a high touch belly-to-belly model? >> We definitely are viewing this as the potential for a very scalable model, working with service providers who invest substantial capital, who have data centers, who have networks, have unique, governed assets in their own countries that they participate in, as well. We're building the stack, being prescriptive in the hardware, building the software layer that we need to go with it, so that we can operationalize the seven by 24 service that scales, and do so with this hybrid model. Not be over here in the race to the bottom, with Amazon's and Google's, we're over here focused on enterprise customers to deliver value of how these things work across the boundary of on and off premise, the Hybrid Cloud, and enable which enterprise-class services on top of the platform. We're going to do so with what we do, we're going to leverage partnerships, like Savvis, CenturyLink, like the SoftBank partnership, and we're going to enable those 3,900 partners with additional service offerings, as well. It's a very effective business model. >> But you will build out your own data centers, or... >> No, we're not building our own concrete, air conditioning, and networks, we're doing Colo for the core vCloud Air offerings for those, but we're enabling our partners to do that, as well. Here are the recipes, you go build it, and operate it, as well. >> So that's a technology transfer, IP transfer? >> For that, we get a recurring revenue stream as they go run our software in their data centers and services. The combination of the two, we think, gives us a very effective business model for the future. >> Pat, last year, I asked you about the, you announced the Hybrid Cloud, all in. I made a comment, kind of off the cuff, that's a halfway house, got you agitated. Halfway house? (laughs) And you said no, it's the final destination. I took a lot of heat for that, I fall on my sword, I'll eat my own words there, but it turns out absolutely correct, right? That's absolutely the destination. That is the number one conversation, it's Hybrid Cloud, certainly on-prem, off-premise, new economics, value creation. I got to ask you, and the question from Twitter has come in, along the same lines, is ask Pat about moving up the Stack. And I also want to hear about the end-user piece, but inside the Hybrid Cloud destination, what is the VMware vision of moving up the Stack mean, and what does that mean to you? >> Anybody who lays out a strategy, to me, it's more important to answer what you're not doing, than what you are doing. For us, we're not doing hardware, making that clear, we're enabling hardware partners. We're not doing consumer, we're focused on the enterprise customer, and we're not doing apps. We are enabling more services, enterprise services, like DR-as-a-Service, Desktop-as-a-Service, but we're not going into the app space. That's the line that we're trying to draw. Everything that's an enterprise-class service, where people need enterprise capabilities, an identity, a DR, storage capabilities, things that really are common services for apps to utilize, that's what we're doing, but that's as far north, or far up the Stack that we'll go. >> I asked Steve Herod on our Crowd Chat pregame on Friday, what the hot opportunities are for startups, he said security, or mainly, not getting caught at this perimeter-base security. What's your view on that? >> The hard, crusty exterior, and the soft, gooey inside is how I described it this morning. My morning breakfast everyday, and with it, this whole idea of micro-segmentation, NSX, really redefines how you build networks, and that's going to allow us to re-factor every aspect of security, every aspect of routing, and load balancing, et cetera. We announced the five partnership. The Palo Alto Networks partnership is really enabling us to execute on the micro-segmentation use case. It's transformational about how services and networks are operated inside of data centers, and we have the poll position here with the NSX platform. >> One of the most common question we're getting from the crowd, is when are you going to get a Twitter handle? (groans) (laughs) >> I've never been a good social guy. (talking over each other) >> We'll show you the engagement container-- >> Thank you, you can help me out with that. That'll be good, thanks. I appreciate it. (laughs) >> On end-user computing, let's go to the part because Sanjay is onboard, the acquisition, give us the update, what's coming through that? >> What a team. Sanjay has been a great leader, we brought together a great leadership team, Sumit and John Marshall. Their passionate and aggressive in that space. The combination of the new assets, the AirWatch team, Revitalization of Horizon, DaaS as a service on the platform, we just announced Cloud Volumes. It's a very cool, dynamic app capability, so overall, really coming together. Momentum increasing in the marketplace, Sanjay's done a really fine job at driving us in that area. What a difference a year makes. >> Pat, I wish we had 34 minutes, which was your record on theCUBE-- >> We're just getting started, John. (laughter drowns out speaker) >> We appreciate your time, but I want to give you the final word, and we talked about this briefly earlier, everyone always wants to ask, is this a defensive move, what's the strategy? I've never seen you as a defensive player. In all the interviews we've done, knowing your history, you're an offensive player. You talked about, years ago, get out in front of that next wave, or you'll be driftwood. I don't see that defensive. What is the VMware offense? If you could describe the offense for VMware, as a company. And answer the question, offense, defense? Are you making defensive moves, or am I off-base by categorizing it offense? >> I think we're absolutely playing offense. If you think about it, we're transforming networking, we're transforming the entire data center operation, we're delivering the first, truly hybrid cloud, enabling secure, managed environments on those devices. Unquestionably, overall, we are playing offense. Now, some things I think we should've done sooner. We should've been in the public cloud space earlier, and we're having to catch up in that space. The moves that we've taken in OpenStack, I think they're pretty well-timed. The moves that we're taking in containers, I think we are way ahead of anybody else, in terms of delivering enterprise container environments, in that respect. >> M&A activity looking good right now? (laughs) >> I just announced one last week, I got more in the pipeline, we're never finished. Organic innovation, inorganic innovation, we're playing both, and we're absolutely playing offense 'cause here, we're playing to win because our customers want the very disruptive nature of the products that we deliver with the quality, the brand of VMware. That's what they want from us. >> And more open source is part of that playbook? >> Yeah, absolutely. >> Seeing that grow? >> Absolutely, we will use open source every place that we can to accelerate the offerings that we bring to our customers. We don't mind fundamentally changing our business model, but we can add open source components to it, and we will, and today's OpenStack announcement is a great demonstration of that. >> Pat, put the bumper sticker on this to end the segment. What's the bumper sticker say for this year's VMWorld? What's on the bumper right now? What's it say for VMWorld-- >> Enabling brave, new IT. >> Pat Gelsinger, CEO of VMware here, inside theCUBE. Always great to have him. Our fifth year, we love having him on. Great tech athlete. This is theCUBE, be right back after a short break. (dull dinging)