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>> Welcome back everyone to theCUBE's live coverage
in San Francisco for VMware Explorer 22
formerly VMworld, Dave 12 years
we've been covering VMware's annual conference.
Going next level explores bigger theme,
Multi-cloud another inflection point for VMware.
And again at the center of it is the partners
Zia Yusuf is here senior vice president
strategic ecosystem and industry solutions.
You're the, you're, you got the keys to the kingdom
for VMware, welcome to theCube.
>> It's a pleasure, I mean, you guys are a legend here.
This is my first time here.
So, it's a pleasure and excited to chat with you.
>> Well, great to have you, every single year, since 2010
we've always had great commentary and discussion
and sometimes contentious discussion
around the role of partners.
Visa V, VMware's value proposition, VMware dominant
and the enterprise data center, everyone knows that.
Dominant and hybrid was first there, everyone knows that.
Now going to the next level, the customer stay,
they stay with VMware, they don't really leave.
They still got a great loyal base
but now the enterprise is going NextGen cloud native.
The partners are energized
with the conversations we're hearing is huge.
There's changes of roles is clarity on value proposition.
Monetization is hoppin'.
It's great stuff, what's going on?
You're new, but you have a view of this before.
Take us through your what's going on in the partner network,
what's the state of the union?
>> Yeah, I think, thanks for the question.
I think maybe just step back a second right,
the word partners is a big word.
It covers all kinds of things.
VMware has had a rich history of partnerships you know,
mostly technology related partnerships.
So much of our products depend on other partners,
OEM partners, and so on.
We've also had a rich history of our channel.
So, as you look at different channel partners
as you look at going through different parts of the segment
SMB and so on, in a cloud context,
based on what's happening we needed to take
an integrated ecosystem approach.
That's the word I use, right.
And for me it's, it's a little bit like a spider's web.
Like no single strand in the web is that strong
but when you put it together thoughtfully
in a very deliberate way.
That's what an integrated ecosystem strategy.
And so we've got our VCP partners,
longstanding history that machine continues.
We've got our channel partners and OEM partners
that machinery continues obviously Dell
strategic partner, significant business.
The parts of the puzzle that I've been focusing on
is five other different pieces.
So first of course, is our hyper scale partnerships
long history with AWS, very successful history.
We have GCVE with GCP.
We announced, I think three, four months ago
that GCP was joining our VMware cloud universal
and a big announcement yesterday
about Microsoft doing the same.
And hopefully we extend that.
So, as we work with this hyper scaler six
or seven of these partners, it's a, as you can imagine
kind of a multidimensional chess game, if you will
a little bit competitive mostly cooperative
and stuff, right.
The GSI is very exciting piece of it.
The essentials that Deloitte,
Deloitte announced a new business unit on VMware,
ACL did the same.
That energy level has really gone up.
You see it at the show here as well.
We recognize that these significant SI's play a huge role
in the decision making process with customers.
And we want to enable them
to build significant VMware businesses.
It's a different game from that perspective.
Last thing I'm point out is, industry and verticals.
Right I mean, this is not being necessarily an area
because of the layer of the stack we've been in.
Obviously Telco is an end to end business unit for us.
We have products, we have a go to market on Telco,
public sector to some degree
because you need all these three letter agencies
and the security and compliance.
But as you look at financial services as you look at retail,
as you look at healthcare we need to be aware
of the workload we need especially
on modern apps, especially on the edge.
So we kind of doubling down
on some of our vertical capabilities.
So, all of those things are connected as well, right.
The SI to the hyper scale partners in a vertical context.
>> What's the biggest change that you've seen?
Because we've observed some partners
are leaning out as they change their business.
And VMware has got new partners coming in, leaning in.
So you got mentioned, Dave mentioned Telco
and you got new use cases with edge and multi-cloud so
you know, some people kind of maybe age out
or change their strategy, some double down
the core partner network, and then new ones come in.
What's been the biggest change,
if you can look at that holistically?
>> Yeah, it's a great question, right?
Because it's so multidimensional
and there is no such thing as a GSI global system
because they build products.
Sometimes they act as a reseller,
they're a solution provider.
Also they provide services.
So as their business model changes,
we have to adjust how we engage with them.
We can't put them in nice clean buckets.
And that's what I'm doing with my colleagues here
is how do we really enable them?
And one of the things, I mean, I've done this type of stuff,
I was at SAP for many years.
We need to figure out how do we make them successful?
Not just, this is what VMware wants you to do.
We need to understand their business model
and how do we fit into that?
'Cause if they grow, then we grow with that.
And that is honestly a little,
it's a subtle point, but it's a little
bit of a nuanced. >> Yeah, it's very nuanced,
but you have to nail that.
You got to overlay. >> 100%
>> The strategy where the enablement is technically
or product wise, economics and conflict.
(John laughing) >> And profitably,
if they're profitably is important to us
it's not just their growth.
>> So Zia, I want to test the premise on you,
something, John and I have been working on
this notion of super cloud.
And we did an event earlier this month,
but one of the aspects that's kind of nuance and futuristic
is if I'm a, let's say a financial services company
and I'm going through a digital transformation
I would be looking strategically at what, say Amazon did
taking it's internal IT and then pointing at the world.
I would say, I have data.
I have tools, I have software, I have expertise
that's really unique and could be value add.
And I would be thinking, how do I monetize that,
create my own cloud.
And I'm actually just going to throw it
into a public cloud to do that.
I've got mainframes running, I've got Oracle stuff on Prem.
I'm not going to shift that stuff into the cloud
and maybe some of it, but I've got transaction systems
and proprietary data.
And a lot of it is running on VMware
and I've got cloud stuff too.
I would be looking at, okay, how do I build my own cloud
and put my data, my tooling, my software
in front of a new ecosystem, my own ecosystem
that I can you know monetize.
Are you seeing- >> Without spending
the CapEx. >> Yeah, without having
to build data centers?
Right, exactly.
I want to take advantage of the gift
that the hyper scalers are given.
Are you seeing any activity
bubbling up in that regard? >> It's a really,
it's a really interesting question.
And I think the terminology
that we've used around cloud smart kind of goes into that.
So let me take what you said. >> Okay please, yeah.
>> And frame it in a slightly different way.
You can standardize on public clouds
and everybody's using the same thing.
You're using the same services, and so on.
Theoretically that could lose some of your differentiation.
Right, I mean, especially for financial services companies
that have built so much of their you know,
trading test down to the milli, milli, millisecond
and how do they do that, and so on.
So, I think you have something there right.
So, as they look at their technology and software strategy,
yes there's cost reduction aspects of it.
There's refactoring aspects of it that hygiene
that needs to be done as Rughu talked about
from this cloud chaos to cloud smart, if you will
but then how do you differentiate on the business processes?
How do you differentiate that then down into the workloads?
And I think that's where to use an old term.
It takes a village, right, you've got the system integrator
that's providing this stuff.
You've got other strategy firms
like the BCGs and McKinseys of the world
that have huge influence now.
Then you've got technology players
that are coming into that.
And I think the cloud smart approach
is to do exactly what you're saying.
It's not just the refactoring,
it's not just movement to the cloud.
How do you retain your competitive edge
from the processes the models, the thinking
that you've built up over many years.
So, I don't know if it's super cloud or what that means,
but that at the end of the day,
this is about business processes.
At the end of the day, this is about
having a competitive edge in the market and
I think you could do it. >> It's industry cloud,
right? >> It's,
that's a good way to put it. >> Yeah.
>> I think Industry cloud
is a good way. >> Why is there security cloud,
Why isn't there an insurance cloud?
Why's there a FinTech cloud?
So I mean if you look at Goldman Sachs capital one.
>> Right. >> There,
CapEx is handled by AWS.
Snowflake built their entire business on AWS.
Didn't spend the dime on CapEx.
Well, they spent a lot of operating expense
for that CapEx and the fees,
but still they became successful.
And then the rest is history.
So, I think people are seeing this idea
of I'll ride that back on the CapEx of the hyper scalers
and then use the tooling from the partner network
and what's available.
To then, cobble together in an architectural engineered way,
distributed computing way, a new way to do things.
Okay, so if you believe that, which we do,
then you say, oh, it's on the balance sheet.
So, what we've been hearing from companies is like,
"Hey it's going to be on the balance sheet",
I better have an income statement impact on the top line.
So, you start to see behavior change at the customers
not IT powering the business and the back office
and terminals and some app.
>> Crosscutting. >> It's like, no, no, no
this is a digital business.
So, the integration of balance sheet income statement
on the economics is driving
a lot of the behavior at the customers.
So we see customers thinking this way
and it's like we've never seen this level of
business model refactoring
as well as partner vendor selection,
product technology mix at the same time.
>> And VMware. >> At this level.
>> Need the connective tissue
between the hyper scalers in the ecosystem
and actually provide those cross cloud connections.
>> Yeah. >> You know, to the extent
there's a business case there,
that's what we're trying to of squint through.
Is it going to be hybrid with on-prem in one cloud
or is there an advantage of going cross clouds
beyond just avoiding lock in you know,
to take advantage of global infrastructure?
>> So and then the next question is the Tam then bigger
which means the partners are better?
>> Yeah right. >> Participate in that.
>> Yeah, I think, and we look at economics of this, right?
I mean, there's a huge emphasis on cost, right.
Cost, and I completely get that.
I think, as I've talked to customers both now that I'm here
but before advising a range of companies
the innovation process, the time to impact
is equally important all right as you compete.
There's no point in just getting your cost down.
If you're then getting beaten up in the market
and you're not able to differentiate
with new digital services.
And this is where call it super cloud,
call it industry cloud.
We need to connect up to the business processes
and the business impact and not just
in my view the cost infrastructure piece of it.
>> Yeah.
And that we can't do on our own, we're not an apps company.
So we're, you're not SAP, we're not Oracle,
but we need to work with those players to make sure
that their workloads are optimized in the right cloud
in the right configuration.
And that is a job to be done
as opposed to just let's take it to town.
>> And there's clearly a technology business case,
especially if we're working with companies
like VMware who's going to help me you know, simplify.
>> Right. >> My move to the multi-cloud
but there's also a business and economic impact in that.
Even if it's not, if it could be simple as
if I partner with Microsoft I'm going to do more business
right if I'm one of these industry clouds.
So I see that as another potential tailwind, it's really,
it's like when Dreesen says all your companies
are software companies, to me all companies
are cloud companies, now increasingly.
>> Look the difference between cloud and apps
and then stuff, I mean like.
>> Yeah, it's all.
>> It's like you know there's used to be infrastructure
and then apps company and so on.
We need to deliver with our ecosystem partners
and integrated solution and solution with a big S
not just the technology solution
but the broader, I mean look at the change management.
>> Yeah, yeah. >> We talked about culture,
I mean, if you don't get that piece right
and the change management piece.
>> Everything, yeah.
>> You know the rest of it is history.
>> Well and it's got to be delivered as a service,
>> It has to be. >> Which is huge implications
as to how you deal with change management.
>> And this goes back to my kind of first comment is
I really try and think of this
by architecting the ecosystem.
I don't like the word alliances.
Right I mean, let's say kind of a one to one relationship.
You know, let's do an agreement, let's go have dinner,
but architecting the ecosystem the spiders web,
who are the different players
how can we compliment each other?
And if it, Deloitte and a Microsoft
want to do amazing business together
related to VMware technology I want to encourage that.
And so those third party Connections.
>> You guys your contextualizing the ecosystem, basically.
And I think from a customers standpoint
that's a benefit to them, in my opinion
in fact, Dave, remember at our supercloud.world event
URL supercloud.world is the plug for the site.
They can check it out.
One of the comments from the cloudarati panel was
we had a title this session called
the innovators dilemma you know question mark you know .
>> Best book ever written. >> Yeah, yeah.
And so the, one of the panels said, it shouldn't be,
we should change it to the integrators dilemma
because what's happening is that integration
is now standard table stakes and,
but integrating the right things now matters, right?
So, integration for integration sake
isn't necessarily the end game anymore.
>> And this is where. >> And this kind of where
you're getting at with the spider's web
is that integrating properly is a solution mindset.
>> And look, I'm integrating also,
you know have to bring in data from that perspective.
Right, at the end of the day data being the new oil,
if you will, the integration allows that data
to flow to the right place at the right time
to make the right decision.
Now, we are not doing all of those pieces
but we are certainly enabling that.
And as you especially start looking at
what we can do on the edge and what we can do
in a retail store and a factory
and so on those kinds of things come together.
>> Okay, Zia take some time.
We got a couple minutes left, only two minutes left,
I want you to get some commentary
directly to the audience around
what specifically you're doubling down on.
That's new that you're investing in
on the partner network or your partner strategy.
What is a steady state that's being nurtured
and farmed or whatever word you want to use,
but here's our core thing.
Here's the area of improvement we're going to be in
you know, cranking the handle on take us through that.
>> Sure. >> I know you got OAM,
got telco, got new things going on.
>> Yeah so, maybe
a couple of things right. >> lay it all out.
>> First of all it has to be linked to VMware strategy.
So as we transition on this journey
to subscription saas ARR,
we need to bring our ecosystem along to do that.
That has business model implications
that has implications on how we engage with them,
how we define success how we value things.
So that's an important journey.
Secondly, is we need to do a better job
of enabling our partners.
Right, I mean, we have our partner connected.
We do a pretty good job on the channel side.
We need to do a better job on the GSIs
is really understanding their business model,
how they're engaging with their customers
and provide them the technology the support,
the financial resources, so that they can be successful.
That's very important.
Third is, to connect the dots on the ecosystem, right?
I mean it's a, I've spent a lot of time
in this event as well in joint meetings
between system integrators and hyper scalers
with our technology colleagues on Intel or NetApp or AMD.
And these are companies that we have a rich history with.
We're trying to connect,
because that's how customers look at it.
So, connecting the dots
between the ecosystem super important to us, and then look,
there's a change management journey within VMware.
We also need to understand how we can engage
with partners in a more productive, effective way.
How do we scale this up?
I believe, I think our leadership in Raghu and Sumit
we are not going to succeed unless
we have a profitable, engaged, passionate ecosystem around.
>> Yeah I mean, they got to make money.
They got to. >> Exactly.
>> Be successful, have successful customers,
their end customers your customers.
Well, all good,
question of where you're investing the most right now.
If you had to put a kind of the pie chart together,
I mean some of it's steady state like it's a machine,
some of it's new like Telco for instance I mean here's.
>> I think again, rich history on the channel side,
we continue to invest there.
Very valuable to go do that.
I think some of these newer areas
around the system integrators, especially the large ones,
the Whipple's the HCLs,
Deloittes essentials of the world, very important.
The hyper scaler relationships directly leads into ARR.
You saw the VMC cloud Universal will continue.
>> We have Google on great props from Google.
>> Yeah, We love it you guys.
>> Yeah, and so look, I think
we are not multi-cloud unless we go do this.
Right I mean, Raghuram made a joke about this.
We were single cloud and now we're multi-cloud,
we want our customers to be able to procure
these integrated solutions through VMware
and our hyper scaler partners will continue to do
that's when multi-cloud really become.
And so the GTM motion, the discounting
the commission structure
all of that machinery is an important radio for me.
>> Zia thank you so much for coming on theCube.
I know you've been super busy.
You got to go out and hit all the partners
say hello, compressing you know, got to hit the pavement,
say hello to everyone.
>> It's been fantastic, the partners have too many,
too many parties and so. (Interviewers laughing)
But that's a fun part of my job, but appreciate your time.
>> You got good stamina. >> Thanks Zia.
>> So you got to have that in this game.
Not about the faint of heart here at VMware.
Zia thank you for coming on. >> Of course.
>> This is the cube coverage, back after lunch.
After the short break day two
of three days of live coverage here in Moscone West
on the street floor level of the event
I'm John Furrier with Dave Alante.
We'll be right back.
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