>> Announcer: Live from San Francisco,
celebrating 10 years of high-tech coverage, it's theCUBE.
Covering VMworld 2019.
Brought to you by VMware and its ecosystem partners.
>> Welcome back, everyone, day three CUBE coverage
here in San Francisco for VMworld 2019.
I'm John Furrier, Stu Miniman here, with Dave Vellante.
Day three kickoff.
We have two sets, wall to wall coverage, guys.
This is the time where we get to take a deep breath,
two days under our belt, look and reflect
on all the news we've covered
in our two last analysis sessions.
But also kind of riff on, we got two nights in,
hallway conversations, we learn a lot at the parties.
I mean, Stu, I learned a lot last night.
Dave, I know you learned a lot,
Stu, you were talking about some things that the chatter,
certainly, the Twittersphere,
#VMworld, lot of action on there.
But it's the hallway conversations,
it's the parties, when people have a few cocktails in 'em,
Dave, you start to hear the truth! (he laughs)
The real deal comes out.
>> No doubt.
And again, John, Stu, there's real concern
from the practitioners we talked to
about this acquisitions spree.
Are they going to be integrated?
Are they going to just throw all this stuff at us
and keep jamming products and services down our throats?
Or is this going to be a coherent set of solutions
that solves our problem?
We also had a little interesting side conversation
about Snowflake, Frank Slootman's new company.
And how basically Frank is bringing back the pirates
from Data Domain and from ServiceNow,
Mike Scarpelli's over there, he's this rockstar CFO,
Beth White is back over there, and Frank Slootman,
he's the guy who takes companies
from 100 million to a billion.
So that's going to be very interesting.
>> John: There's going to be serious money making
going on there.
>> We have been following his career
for a number of years, now.
We watched him take Data Domain,
we watched him pull that rabbit out of his hat
with the sale, with NetApp and then EMC swooped in
and then we saw what he did with ServiceNow,
we documented, this is an individual to watch.
>> He's a world-class management team member.
I mean, he executes.
>> Yeah, no doubt.
And he has a formula that's been proven
time and time again.
And to me, the biggest testament to Slootman
is the continued success of Data Domain after he left,
he really helped clean up EMC's data protection mess.
And then the second thing
is look at ServiceNow's performance
after he left, they haven't missed a beat.
And yeah, John Donahoe, great executive and all
but it's because Frank Slootman had everything in place.
And that was a really well run machine.
>> And they got a nice little Oracle like business model.
>> Yeah, no, you're right.
You know, the big complaint now
is wow, your price is too high. (he laughs)
>> Bring in to Oracle.
>> Yeah, no, it's true. >> Stu, what have you learned?
What are you hearing in the hallways?
I mean, a lot of chatter.
>> Yeah, so John, we've been reflecting back a lot.
It's 10 years, 10th year of theCUBE here
and back, here in San Francisco, the new Moscone,
our third show that I've been at
this year in Moscone, and we always track year to year
but since it's been four or five years
since we've been here for VMworld,
when I talk to the average vendor,
when I talk to the analysts here,
we're like oh, thank goodness we're not in Vegas.
When I talk to the average attendee,
they're like, oh my God, what happened to San Francisco
since last time we were here?
It is too expensive and the experience
walking around San Francisco is really not nearly as nice
as it might've been five or 10 years ago.
And many of them, we were talking to a woman
that runs an event that has been Vegas and San Francisco
and she said, oh we did it in San Francisco
and got tremendous feedback, don't do it there again.
Bring it back to Vegas, both for cost
and the enjoyment of being around the environment.
>> VMware wants to be here. >> It's a shit show here.
I mean, San Francisco is horrible right now.
I got to say, Stu, you're right.
I was walking this morning from my hotel,
literally a homeless person passed out
in the middle of the sidewalk.
Smells like urine. >> It's pee and pot.
>> I mean, it's really bad, there's tents now.
I mean, the city of San Francisco's got to do something.
Moscone, by the way, has been rebuilt, it's awesome.
So, you know, in terms of the new Moscone, Stu,
that's a serious upgrade.
Hotel rooms are scarce,
and just the homeless problem is just ridiculous
I don't know what they're doing here.
>> So, gentlemen, one of the other big things
when I was reflecting coming into here.
Two years ago, when VMware really started down,
right before the VMware and AWS announcement,
they'd made a big announcement with IBM
because they'd sold off vCloud Air to OVH.
And for two years, OVH was a big partner,
talked about that transition,
said we handed off this great asset.
OVH isn't here at the show, I was like, oh my gosh.
You know, that was such a big story
and other companies, like Nuntanix.
>> Well, that's a good one,
let's talk about who's not at the show and why.
OVH, why aren't they here?
>> They aren't here because, well,
they've got customers, more of them are in Europe,
that was supposed to be a big entry into the United States.
Obviously it wasn't as valuable for them
to be here even though I'm sure they're still
part of that service provider ecosystem they have.
Another big one for us, and we've had on theCUBE, Nutanix.
We've had Dheeraj Panday, first time we had him on
was at this show.
Still the majority of Nutanix customers
are VMware customers.
I've talked to lots of Nutanix customers at the event.
Even part of the analyst event,
some of the customers I talked to were like,
oh yeah, my hardware stack's Nutanix
and I'm using NSX and I'm using other things there
but they are not here, they are not allowed
to be at the show, and.
>> I mean, they were blatantly told, they can't come.
>> They can't come here,
they can't come to the regional things,
they can't do the partner things.
So that relationship is definitely frozen.
>> How about Red Hat, what kind of presence
have you seen from Red Hat?
>> Yeah, so there are a number of companies
like Red Hat, that they are kept
at a lower level of sponsorship.
So they are here, they participate,
OpenShift of course, is a big enemy for cloud native.
Lots of OpenShift runs on vSphere, so,
many of those companies that are part of the ecosystem
but not the ones that they want to celebrate
and put front and forward.
So it's always interesting to kind of walk around on those.
Even Microsoft is an interesting relationship
for decades with VMware.
Of course, Azure they partner with,
but HyperView was long a competitor so.
We understand those competitive relationships.
>> Kind of interesting, Stu and Dave,
on the ecosystem, Jerry Chen, Dave,
Stu and I interviewed him yesterday on the other set.
Mentioned that the ecosystem
reinvents itself, the community.
The question now is, with Dell, EMC, and Dell Technologies,
obviously we heard Michael Dell essentially laying out
his plan, which is, he's trying to keep people distracted
but the bottom line, he's got his top people
putting together the cloud, right?
Cloud service provider model, so.
You know,
he's going to be a big impact.
VMware, the crown jewel of Dell Technologies,
certainly is looking more and more like it's.
>> Well, and yesterday, you remember
the first VMworld we did in 2010,
it was Dell, I mean, of course, EMC owned them at the time,
but it was Dell, it was HP, yes EMC was there
but it was NetApp, everybody sort of had equal standing.
Yesterday at the keynotes, it was Project Dimension,
VMware cloud on Dell EMC and long keynotes.
>> Big demos. >> Yeah, data protection
baked in to the VMware offerings.
>> Yeah, so it's all very heavily, you know,
Jeff Clarke has his thumb on,
the Dell EMC folks, pushing that through VMware,
Michael's orchestrating the whole thing.
Pat, obviously, is allowing it.
I was sitting in the audience next to some folks
from NetApp, they were like, ugh,
this kind of is a bummer.
Calvin Zito from HPE tweeted, wow,
how to stick in the face of your ecosystem partners.
He then later went on Facebook,
saying hey, I love this ecosystem.
So was sort of balancing it out
because you know, he wants to be a good citizen.
But clearly, the ecosystem partners
who basically brought VMware to the position
where it's in through distribution,
are a little ruffled right now.
You can't blame 'em, but at the same time,
the mandate is clear.
Michael Dell is driving his products
and his solutions through VMware period, the end.
And if you don't like it,
leave. >> Right,
they had such great success with vSAN and VxRail,
and that joint product development
and go to market, if they can replicate that
with a number of other solutions,
they get that, the synergies if you will.
>> But Pat said yesterday-- >> Not if you don't like it,
leave it, worse than that, they said
if you don't like it, you're not invited.
>> Yeah, that's right, you're out.
So how about what Pat said yesterday in theCUBE?
About when they announced and when heavily leaned into vSAN?
He said publicly that Joe Tucci was pissed.
And they were going at it.
So that shows you the change, right?
I mean, so,
EMC when it owned VMware was very cautious
about allowing VMware as a software company
to drive value, VMware now is just acting
like a software company.
>> Well, I think, I mean, I learned last night, Stu,
and you can appreciate this,
I learned that the top executives of VMware
are looking heavily and working hard
at understanding and driving
the Kubernetes Cloud Native thing.
Because this is not a throwaway deal,
this is not a, you know, Barney thing, they are investing.
They got their top brass tech execs on Kubernetes.
Heptio, two big players,
Joe Beda, Craig McLuckie, who are CUBE alumni
as we know, interviewed 'em since day one.
But I think the cloud native thing
is going to be interesting and I think
it's going to be an evolution.
I think it's going to be a very dynamic road,
I think it's going to be a series of course corrections.
But directionally, they're all in on it.
They're going for it, I mean, they're not--
>> Well, and actually, I had a,
good discussion with Chad Sakac, good friend of the program,
now working at VMware for the first time
but came from EMC, worked at Pivotal
and he said, culturally, such a gap between VMware.
Don't have to touch your app,
move everything along, lift and shift is nice and easy
versus Pivotal, you know, must go completely,
dual programming, agile, everything they are, so.
Bridging those because there's multiple paths
and the Ray O'Farrell announcement is,
there will be cloud native stuff
that won't necessarily go to VMs,
we're going to retool VMs
to now be a platform for Kubernetes.
So, they have a few paths to bridge or to build
towards the future.
>> Here's the interesting strategy discussion--
>> And Ray O'Farrell is running Cloud Native, Dave, so.
>> That's right, and this really ties in.
The interesting discussion that I had with some folks
was that you've essentially got,
well, and Jerry Chen brought this up
last time we had him on at re:Invent.
'Cause we have the conversation all the time
about does Amazon have to go up the stack?
And Jerry Chen made
a really good point. >> They are the stack.
>> He said look,
they're not going to become an ERP software company,
what they're going to do is give tools to the builders
so that they can disrupt ERP.
They can disrupt ServiceNow, they can disrupt Oracle.
That's their strategy, at least for now.
Okay, so what does that say?
I think the strategy discussion inside of VMware
and Dell is about, alright, whatever,
cloud's going to be 35 to 50% of the market, fine.
And the cloud native apps, great,
but you got this mission critical, ERP is an example,
database apps that are on prem.
What we have to do is keep them there
so we're going to sell to the incumbents
and we're going to give them cloud native tools
to modernize those apps, build new apps on prem.
And that's the collision course that's coming.
So the big question is, can the cloud native guys,
and AWS, disrupt that huge install base
of ERP and, >> I've always said
>> mission critical software? >> Amazon is like the wave
that's coming in and tsunami's coming in
and who's going to built that sea wall to stop it, right?
And that's essentially the only hope that these guys have.
You look at all the competitive strategy,
whether it's Oracle, whoever.
You just got to stop it.
You can't like, >> It's the seawall,
that's a great analogy. >> you can't compete at it.
>> They're building a seawall.
>> And I always say that, their only hope at this point
is to get in the game because,
see, Amazon is the stack.
They're not really moving up the stack.
You hear that from Cisco and Dell and other people.
That's where there's a game of musical chairs right now.
The music's, there's still a lot of chairs left
but soon the chairs are getting pulled away
and Cisco, Dell, EMC,
VMware, they're all fighting for these big chairs.
And one thing we talked about yesterday
is that VMware is very directional.
Product driven, in other words,
they pick a direction, as a statement of direction,
and don't really have a lot of meat on the bone
on the product side.
Cisco is actually in market with service providers,
they're in market with networking, Stu.
There's no vapor there, it's installed base,
it's an incumbent business.
>> They have developers.
>> Yeah, and so Pat talks about software defined data center,
software defined networking, I mean, come on, really?
They're getting there,
but they don't have the complete solution compared to Cisco.
>> Coming in to this week,
I expected to hear a bit more about the progress
and all the customers of VMware on AWS.
And feel like VMware actually downplayed the AWS.
We know what a strong partnership it is,
at every Amazon show we go to
and we go to a lot of them now,
there's a big presence there
and I've talked to customers that are starting
to roll out and move there,
but it felt like, as Dave, you pointed out,
there are some messaging differences.
When you talk about multi-cloud
and how they're positioning it.
So, you know, put those together.
>> I mean, if you're Amazon, you're not happy with VMware.
Going from Microsoft to Dell Technologies,
well the big announcement that positioned,
cloud foundation although it wasn't joint engineering
but the press picked it up as,
oh, the Amazon deal has been replicated
with Microsoft and Google.
I mean, you got to be hurt if you're Amazon.
>> So I've just been taking notes this event.
I've noted at least five major points of difference
between AWS, what they're saying,
and their philosophy and VMware.
So AWS, we know, they don't talk multi-cloud.
They've told their partners,
if you're doing joint marketing with us,
you cannot say multi-cloud.
AWS at re:Inforce, John, we saw this.
Stephen Schmidt said that this narrative
that security is broken doesn't help the industry.
Security's not broken.
You know, we're doing great.
The state of the nation is wonderful.
AWS-- >> Not really.
>> I agree, by the way, that's not the case.
I agree with Pat saying security's broken, it's a do-over.
VMware wants to be the best infrastructure
and developer software company.
Who's the best infrastructure
and software development platform?
AWS.
VMware wants to be the security cloud,
who's the security cloud?
AWS.
And then,
they talked about 10,000 cloud data centers.
Are those really cloud data centers at VMware?
And the last one was, and this was little nuanced.
VMware's talking about,
we know about migrate and modernize,
lift and shift and then modernize.
VMware's now talking about modernize,
and then migrate, if you want to.
You know?
It's totally in conflict,
this is a collision course that's coming.
>> Look at it.
The data center looks like it was going away, right?
To the data center staying.
That's music to Michael's, Dell's, VMware's ears.
They live in the data center,
Stu you pointed this out yesterday.
Data center goes away, so does VMware's business!
>> Right.
So, one of the things I'm surprised, I'm wondering,
you both have talked to some of the service provider,
telco, pieces at VMware.
They're doing that Project Dimension
which is the VMware stack on Dell
that looks just like Outposts.
And I know they've had deployments on this for months.
If I was them, everybody's hearing about Outposts
and talking about it, VMware's like,
we're already doing it.
And this has you in that Amazon ecosystem,
it might be a little strong for the Amazon story
but have you been hearing any about that this week yet?
>> I think they keep a lot of cards close to their chest
but it's clear from the announcements that they're doing,
certainly Dell, the VMware on Dell EMC cloud
or whatever it's called.
It's not a cloud but it's their infrastructure.
That is essentially a managed service
that's going to be really strong for IT people
because I think that the value proposition
of going to IT and saying, we have this.
You don't need to do anything.
It's very strong, 'cause they don't want 'em.
>> And just to differ it, 'cause the Project Dimension
is that single, that thinner stack
like what we saw in Outposts in the Amazon video
as opposed to the VMware cloud on AWS
which is the full CI or HCI stack.
>> I haven't heard anything, Stu, on it.
>> Well, but the conversation I heard is,
from VMware's standpoint, they can make money
on that managed service,
that's why it's the preferred partnership, right?
And so, they're part of their cloud play.
If you don't have a public cloud,
I said this yesterday,
you have to redefine cloud.
And you have to get into cloud services.
>> John: That's what's happening.
>> And it's exactly what's happening
and what I like about what VMware is doing
is they are transitioning their model
to a SaaS based model, now it's only 12.5%
of their revenues today but both Pivotal
and Carbon Black are going to add
a billion dollars next year to that subscription base,
three billion dollars in year two.
And so, you know, Pat said the other day,
I think we can get to 50 50.
I don't necessarily think in the near term
we're going to go beyond that, it's not the Adobe strategy.
>> I mean, we can be critical of VMware in some areas
but I got to tell ya, their core strength
that they went to is software operators
in the data center for enterprises.
That's been a great strategy, focusing on their core.
Building from there as Jerry Chen pointed out,
adding other products.
So,
they're a software company.
So I think they really got a good solution.
And the data shows that people are increasing their spend.
>> John, just one piece on that,
'cause I had a couple of really good conversations
with customers, customers that would deploy VCF,
so they've got the full stack.
And so, using HCI.
But not necessarily on Dell hardware,
could be Cisco hardware, could be HP hardware and the like,
or they're buying NSX but the virtualization team owns it.
And they get kind of put in a box.
The storage team says, that's not the array
I'm used to buying, well maybe I'll put a pure storage box
and put it in between.
The networking team says, I'm refreshing my Cisco hardware!
But we have NSX and it's great.
Well, you can use NSX over there,
we're going to use ACI over here, so.
The term I heard from a number of customers
is organizations still have hardware defined roles
and they're trying to figure out
how to move to that software world.
Which hurts me, 'cause I spent years
trying to get beyond silos and helping people
move through those environments
and still in 2019, it's a big challenge.
That organizational shift, we know how tough that is.
>> So, just a couple points on the data, 'cause you're right.
There are some countervailing trends though.
So, yes, people are spending more on VMware
in the second half but at the same time,
the data shows that cloud is hurting VMware spend.
So that kind of gets interesting.
Are containers going to kill VMware?
No, there's no evidence
that containers are hurting VMware spend.
But there's clearly risks there, as we've talked about.
Who's best positioned in multi-cloud?
Well, it turns out, the guys with the public cloud
are best positioned in multi-cloud! (he laughs)
Google and Microsoft!
And so, the Pivotal thing is interesting
and it ties all this in, so the data
is actually really interesting.
It's like you're seeing tugs at both sides,
and I think your notion about the seawall is dead on.
That's exactly what they're doing.
>> You see that with Oracle's trying to stop JEDI,
they can't win, they just want to stop Amazon in their tracks.
Dave, great data, great reporting, Stu, good observations.
Get all the data at night in parties
and we're certainly going to keep doing that.
Day three of wall to wall coverage here.
CUBE bringing you the insights and interviews here,
live from VMworld 2019, stay with us for more
after this short break.
(electronic music)