>> From the Silicon Angle Media Office,
in Boston Massachusetts, it's theCUBE.
Now, here's your host Dave Vellante.
>> Hi everybody, welcome to this breaking analysis
where we try to provide you some insights on theCUBE.
My name is Dave Vellante.
I'm here with Jim Cabilus who was up today,
and Jim we were just off of the VMworld 2019.
Big show, lot of energy, lot of announcements.
I specifically want to focus on containers and the impact
that containers are having on VMware,
specifically the broader ecosystem
and the industry at large.
So, first of all, what was you take on VMworld 2019?
>> Well, my take was that VMware is growing fast,
and they're investing in the future,
which is fairly clearly cloud and native computing
on containers with Kubernetes and all that.
But really that's the future and so, what VMware is doing
is they're making significant bets
that containers will rule the roost in cloud computing
and application infrastructures going forward.
But in fact virtual machines, VMs hypervisors
are hotter than ever and that was well established last week
by the fact that the core predominate announcement last week
was a VMware Tanzu, which is not yet a production solution,
but is in a limited preview,
which is the new platform for coexistence
of containers and vSphere.
A container run time embedded in vSphere,
so that customers can run containers
in a highly-iso workloads,
in a highly isolated VM environment.
In other words, VMware is saying,
we're saying to their customers,
"You don't have to migrate away from VMs
"until you're good and ready.
"You can continue to run whatever containers
"you build on vShpere,
"but we more than encourage you to continue to run VMs
"until you're good and ready
"to migrate, if ever." >> All right.
So, I want to come back and unpack that a little bit,
but does your data, does your analysis,
when you're talking to customers and the industry at large,
is there any evidence from what you see that containers
are hurting VMware's business?
>> I don't get any sense that containers
are hurting VMware's business.
I get the strong sense that containers,
they've just of course acquired Pivotal,
a very additive to the revenue mix at VMware.
And VMware, most of their announcements last week
were in fact all around Kubernetes, and containers,
and products that are very much for those customers
who are going deep down the container road.
>> So that was a setup question.
>> You've got lots of products for them.
>> So that was a setup question.
So I have some data on this.
>> Go ahead >> Right answer.
So, I want to show you this.
So, Alex, if you wouldn't mind bringing up that slide.
And we shared this with you last week
when we were prepping for VMworld.
This is data from Enterprise Technology Research ETR,
and they have a panel of 4500 N-user customers
that they go out and do spending surveys with them.
So, what this shows is, this is container customers
spending on VMware.
So, you can see it goes back to early January.
Now it's a little deceiving here.
You see that big spike, but what it shows it that,
A, that big spike is the number of shared customers.
So, you really didn't have many customers back then
that were doing both containers and VMware that ETR found.
But as the N gets bigger, 186, 248, 257, 361,
across those 461 customers,
those are the shared customers in the green.
And you can see that it's kind of a flat line.
It's holding very well in the high 30's percent range,
which is their sort of proprietary metric.
So, there's absolutely no evidence, Jim, that containers,
thus far anyway, are hurting VMware's business.
Which of course was the narrative,
containers are going to kill VMware, no evidence of that.
But then why would they acquire Pivotal?
Are they concerned about the future, what's your--
>> Well, they're concerned about cross selling
their existing customer base who are primarily on V's,
fearing the hypervisors,
cross selling them on the new world
of Kubernetes base products for cloud computing,
and so forth and so on.
In other words it's all about how do they grow
their revenue base?
VMware's been around for more than 20 years now.
They rule the roost on the hypervisors.
Where do they go from here, in terms of their product mix?
Well, Kubernetes and beyond that, things like serverless
will clearly be in the range
of the things that they could add on.
Their customers could add on to their existing deploys.
I mean, look at Pivotal.
Pivotal has a really strong Kubernetes distribution,
which of course VMware co-developed with them.
Pivotal also has a strong functions as a service backplane,
the Pivotal function service four, serverless environments.
So, this acquisition of Pivotal very much positions VMware
to capitalize on those opportunities to sell those products
when that market actually develops.
But I see some evidence that virtual machines
are going like gang busters
in terms of customer deployments.
Last week on theCUBE at VMworld,
Mark Lohmeyer who's an SVP at a VMware
for one of their cloud business unit,
said that in the last year, for example,
customers who are using a VMware cloud on AWS,
VMware grew the customer base by 400% last year,
and grew the number of VMs running
in VMware, cloud, and AWS by 900%,
which would imply that on average each customer
more than doubled the number of VMs they're running
on that particular cloud service.
That means VMs are very much relevant now,
and probably will be going forward.
And why is that?
That's a good question, we can debate that.
>> Well, so the naysayers at VMworld in the audience
were tweeting that, "Oh, I though we started Pivotal.
"We launched Pivotal so that we didn't have to run VMs on,
"or run containers on VMs,
"so we could run them on bare metal."
Are people running containers on virtual machines?
>> Well, they are, yes.
In fact, there's a broad range of industry initiatives,
not just Tanzu at VMware, to do just that.
To run containers on VMs.
I mean, there is the KubeVirt,
open source project over at CNCF,
that's been going for a couple years now.
But also, Google has Gvisor,
Intel has the Kata containers initiative,
I believe that there are a few others.
Oh yeah, AWS with Firecracker, last year's reinvent.
All this would imply, strongly indicate
that these large cloud and tech vendors
wouldn't be investing heavily into convergence of containers
and VMs and hypervisors,
if there weren't a strong demand from customers
for hybrid environments where they're going to run both stacks
as it were in parallel, why?
Well, one of the strong advantages of VMs
is workload isolation at the hardware level,
which is something that typically
container run times don't offer.
For example, the workload isolation
seems to be one of the strong features
that VMware's touting for Tanzu going forward.
>> So, VMware is at the centerpiece of VMware strategy
is obviously multi-cloud, Kubernetes as a lynch pin
to enable running applications on different platforms.
Will, in your opinion, and of course VMware
is hard core enterprise, right?
Will VMware, two things,
will they be able to attract the developers, number one.
And number two, will those developers build
on top of VMware's platform
or are they going to look to their cloud?
>> That's a very important question.
Last week at VMworld, I didn't get a sense that VMware
has a strong developer story.
I think that's a really open issue going forward for them.
Why would a developer turn to VMware
as their core solution provider
when they don't offer a strong workbench
for building these hybridized VM,
slash container, slash serverless applications
that seem to be springing up all over?
AWS and Microsoft and Google are much stronger in that area
with their respective portfolios.
>> So, I guess the obvious answer there
is Pivotal is their answer
to the developer quandary. >> Yes.
>> And so, let's talk about that.
So, Pivotal was struggling.
I talked last week in my analysis,
you saw the IPO price and then it dipped down,
it never made it back up.
Essentially the price that VMware paid
the public shareholders for Pivotal
was about half of it's initial IPO price, so, okay.
So, the stock was struggling,
the company didn't have the kind of momentum that, I think,
that it wanted, so VMware picks it up.
Can VMware fold in Pivotal, and use its go-to-market,
and its largest to really prop up Pivotal
and make it a leader?
>> Well, possibly because Cloud Foundry,
Pivotal Cloud Foundry could be the lynch pin
of VMware's emerging developer story,
if they position in that and really invest in the product
in that regard.
So yeah, in other words this could very much
make VMware a go-to-vendor for the developers
who are building the new generation of applications
that present serverless functional interfaces,
but will have containers under the cover,
but also have VMs under the cover
providing strong workload isolation
in a multi-tenant environment.
That would be the promise.
>> Now, a couple things.
You mentioned Microsoft,
of course as you're in the clouding, and Google.
The ETR data that I dug into
when I wanted to understand, better understand multi-cloud.
Who's got the multi-cloud momentum?
Well, guess who has the most multi-cloud momentum?
It's the cloud guys.
Now, AWS doesn't specifically say
they participate in multi-cloud.
Certainly their marketing suggest
that multi-cloud is for somebody else,
that really they want to have uni-cloud.
Whereas Google, and as you're kind of embracing
multi-cloud and Kubernetes specifically,
now of course AWS has a Kubernetes offering,
but I suspect it's not something
that they want to promote hard in the market place
because it makes it easier for people to get off of AWS.
Your thoughts on multi-cloud generally,
but specifically Kubernetes, and containers as it relates
to the big cloud providers.
>> Yeah, well my thoughts on multi-cloud generally
is that multi-cloud is the strategy
of the second tier cloud vendors, obviously.
If they can't dominate the entire space,
at least they can maintain a strong,
provide a strong connective tissue for the clouds
that actually are deployed in their customer's environments.
So, in other words, the Ciscos of the world,
the VMwares of the world, IBM.
In other words, these are not among the top tier
of the public cloud players,
hence where do they go to remain relevant?
Well, they provide the connective tissue,
and they provide the virtualized networking backbones,
and they provide the AI ops
that enables end-to-end automated monitoring management
of the entire mesh.
The whole notion of a mesh architecture
is something that grew up with IBM and Google
for lots of reasons,
especially due to the fact that they themselves, as vendors,
didn't dominate the public cloud.
>> Well, so I agree with you.
The only issue I would take is I think Microsoft
is a leader in public cloud,
but because it has a big On-Prem presence,
it's in its best interest to push containers and Kubernetes,
and so forth.
But you're right about the others.
Cisco doesn't have a public cloud,
VMware doesn't have a public cloud,
IBM has a public cloud but it's really small market share,
and so it's in those companies, and Google is behind,
but it's in those companies best interest
really to promote multi-cloud,
try to use it as a bull work against AWS,
who's got an obviously awesome market momentum.
The other thing that's interesting in the ETR data
when I poke in there,
it seems like there are more people looking at Google.
Now maybe that's 'cause they have such strong strength
in data and analytics,
maybe it's 'cause they're looking for a hedge on AWS,
but the spending data suggests that more and more people
are kicking the tires,
and more than kicking the tires on Google.
Who of course is obviously behind Kubernetes
and that container movement, and open source, your thoughts?
>> Yeah, well, many ways, you have to think,
that Google has developed the key pieces of the new stack
for application development in the multi-cloud.
Clearly they developed Kubernetes, its open source,
and also they developed TensorFlow open sources,
it's the predominant AI workbench essentially
for the new generation of AI driven applications,
which is everything.
But also, if you look at Google developed Node JS
for web applications and so forth.
So really, Google now is the go-to-vendor
for the new generation
of open source application development,
and increasingly DevOps in a multi-cloud environment,
running over Istio meshes and so forth.
So, I think that's, so, look at one of the announcements
last weekend at VMworld.
VMware and NVIDIA, their announcement
of their collaboration, their joint offering
to enable AI workloads, training workloads to run in GPUs
in an optimal high performance fashion
within a distributive of VMware cloud end-to-end.
So really, I think VMware recognizes that the new workloads
in the multi-cloud are predominately,
increasingly AI workloads.
And in order to, as the market goes towards
those kinds of workloads,
VMware very much recognizes they need to have
a strong developer play,
and they do with NVIDIA in a sense.
Very much so because NVIDIA with the rapid framework
and so forth, and NVIDIA being the predominant GPU vendor,
very much is a very strategic partner for VMware
as they're going forward,
as they hope to line up the AI developers.
But Google still is the vendor to beat
as regards to AI developers of the world,
in that regard, so--
>> So we're entering a world we sometimes call
the post-virtual machine world.
John Furrier is kind of tongue and cheek
on a play on web tudauto.
He calls it cloud tudauto,
which is a world of multiple clouds.
As I've said many times, I'm not sure multi-cloud
is necessarily a coherent strategy yet
as opposed to sort of a multi-vendor situation, Shadow IT,
>> Yes.
>> Lines on business, et cetera.
But Jim, thanks very much-- >> Sure.
>> For coming on and breaking down the container market,
and VMworld 2019.
It was great to see you. >> Likewise.
>> All right, thank you for watching everybody.
This is Dave Vellante with Jim Cabilus.
We'll see you next time on theCUBE.
(upbeat music)