 Live from Las Vegas, it's theCUBE covering Dell EMC World 2017. Brought to you by Dell EMC. Okay, welcome back everyone. Live coverage here at Dell EMC World 2017. This is theCUBE's coverage. I'm John Furrier with my co-host Keith Townsend this weekend with Pat Gelsinger, CUBE alumni. Back on theCUBE, CEO of VMware. Pat, you've been on every year. It was our eighth year covering of EMC World. Now transitioning for the first time, Dell EMC World. Technically there was an event in Austin, Dell World, but this is the real transformation of everything. You're at the clue of everything. VMware is, and we've talked about this before. I mean, four years ago we talked about hybrid cloud and it's not, it's a mindset that's seen in the themes here. VMware is the center of all the action. What are you talking about? Hyperconverge all the way across. Welcome to theCUBE again, great to see you. Hey, it's always great to be here. Thank you, thank you, John, and to our friend, Mr. Rante. Hope to see you some day, baby. Right? Dave, it's the third time. I can guarantee you, Pat, that Dave will not miss VMworld. Our eighth year covering. If you do, buddy, if you do. Dave, follow me out, man. If you want to let us lay down, you will be at VMworld, by hook or by crook. Pat, exciting keynote. Okay, a lot of meat and potatoes, messaging, but at the end of the day, VMware is pumping on all cylinders. Give us an update. There's a lot of hallway conversation, NSX is doing extremely well. Obviously, AirWatch, investments paying off, Sanjay's always chirping on that and talking about it, real successes. Give us a quick update on VMware. Yeah, and overall, I'd say, three things about VMware right now. Number one, the new products are starting to really deliver. And we talked about NSX starting three years ago, but it was small. Well, now, we hit the billion dollar run rate in Q4. I mean, this thing is getting big enough that as we grow that, it's really starting to produce overall company growth. So that's getting people excited. NSX, VSAN, AirWatch really starting to deliver at scale for the business. Secondly, I'll say, when you go into an IT institution, you're in one of two columns, as I describe it. You're either in the procurement column, which says, give me a lower price, or you're in a strategic column that says, how can we do more? And I'll say, a lot of the things that we've done, NSX, security, but maybe more so than anything, the Amazon partnership was the one that sort of tipped us from the procurement column to the strategic column. And as a result, customers are really seeing the strategic value, this ability to do that vision of any cloud, any app, any device, and we're the company that is the bridge to the future for them. So that's really turned the tide. And the third is, why we're here, right? We really are seeing the lift from our Dell friends. And many of the solutions that we're building, their expanded market capacity is really driving our growth as well. So those three together, and you know, I was gonna say, you know, lots of other, you know, I'm so proud of my team, right? As we sort of weathered through some fairly dark and stormy days, and now we're on the other side, and you know, the breeze is blowing at our back, the sails are up, and we are sailing this ship, baby. And we actually were on theCUBE, we've been documented for all this time, but you, I remember you telling me, John, NSX is my big bet, because I asked you the disruptive enabler question. Okay, so that's flowering, doing well. What's the bet now? I mean, is the bet to double down? Where are the areas you're looking at now saying, okay, we got some growth here, things are blooming, the nutrients are in the soil, so to speak. Where's the strategy? What are you looking at now? What's the bet? Is it double down, new products, whatnot? Yeah, so NSX remains the top of the heat. You know, it is the number one priority for us as a company. And obviously, its growth rate, we're seeing that all over the place. And it really is to be that, you know, the center of the data center virtualization, the SDDC, you got to do the network. But the future of NSX to me is so profound, right? Because it's not just NSX in the data center, but it's NSX reaching to the container level. And that's what you saw today in our announcement with Pivotal, that we're integrating it natively into container environments and the Pivotal Cloud Foundry. But it doesn't stop there, John, right? We're stretching it to cross data centers and across clouds. And with our cross cloud architecture, we're going to have it available across multiple clouds. So it is that conduit, you know, that layer, I'll say we're building a highway between data centers or between private and public cloud. So that becomes really important. But it doesn't stop there. We're stretching it into the branches, as well as people transform their branch architectures and SD-WAN, you know, NSX plays a role. But it doesn't stop there. NSX is also the way that we're reaching in or one of the core technologies to transform the telco and service provider networks as well. And it really is part of that core and a V strategy for us as well. So it is a strategic layer. You know, I believe every company has a franchise product. And VMware, that was V-Sphere, ESX. You know, that was the thing that propelled us into existence. NSX, our next franchise product, right? It's that big. Let's talk a little bit more about NSX. Some of the criticism around NSX has been that you know what, we're taking legacy constructs, the virtual switch, the VLANs, and we're bringing that out to the cloud. Developers don't want that. They want native APIs. Can you talk to how you're meeting the needs of the developers with NSX, as well as the traditional VMware customers? Well, let's talk about what I announced today as one example, right? You know, in the NSX announcement today with Pivotal is exactly that, right? It's just saying, you know, what is that networking crap? I just want to get my containers connected to each other. I want to be able to load balance them. I want to be able to firewall them in a very seamless, integrated fashion. And that's exactly what developer-ready infrastructure that I talked about and announced in the keynote today is doing that together. There are some new interfaces that are emerging in the container world. You know, CNI, container network interface. You know, NSX will have native support for that because it is that way. You really, and that really is what will, you know, as I was describing, is the friction between this high container microservices world and, you know, infrastructure requirements for networking security and how do we bridge those two worlds? How do we deal with the friction points between them? And that's very much what developer-ready infrastructure and NSX is at the heart of that. Is Pivotal really ready, though? I want to drill down on Pivotal because when I like the messaging, I love the announcement. But Pivotal is a past, it's a smaller piece of the bigger market. Is Amazon the other play? Because there's multiple passes now, multi-cloud. It's essentially extension of your original comment five years ago of hybrid cloud. It's like a hybrid cloud gateway to multi-cloud. What's the past developer-ready infrastructure look like beyond Pivotal? Yeah, and clearly, you know, let's be very honest. I mean, you know, we are out creating a, and the Pivotal team is creating a new way to develop and deploy applications. And I think that's a decade long, right, or even longer cycle in front of us. But what's happened over the last year or so is Pivotal has gone from being this little developer thing to now companies are deploying it at scale. You know, and that's what you heard Bill talk about on stage today, that they have companies like Ford and Comcast and State Farm who've now gone into this full bore on their new application development. They are running applications, many applications at scale, and they're pivoting software to become a central element. You know, I mean, do you think, when you think of the coolest IT companies in the world, do you, does Ford and Comcast show up on that list? But they are bringing with Pivotal. Ford does, I mean, Ford's doing Palo Alto, R&D Center. Yeah, you know, but they're bringing software skills with Pivotal as core competency into. Ford's a customer of Pivotal. Yeah, yeah, big, big customer and really changing how they think about their application and user experience as a result. So they're really now starting to see that inflection point in their business and this partnership, as you said, as Bill said, 100 for 100. You know, I've probably personally talked to 30 customers about it. You know, Bill certainly talks to more in that discussion and 100%, right? I mean, people immediately see the value. It is a existing pain point. You know, people say, boy, now how do I take this new container application world that I'm in, right? Deploy that in production very quickly. We have the most compelling answer in the marketplace. And, you know, obviously with Pivotal, as we showed in the slide today, you know, it's a cross-cloud service available from private cloud, almost all of that VMware hosted, but then available on Google and Azure and Amazon as well. So it really is a cross-cloud service also. So VMware, glue of the infrastructure, NSX, primary ingredient that we're making big strategic bets on NSX. In the community, VMware community is rabid. 130,000 members of Vmug. There was an announcement about the community. I love those Vmug guys. They're passionate about it. They love their V-Sphere. They're geeky and rabid. They love their NSX. So let's talk about the ecosystem or ecosystem in general. One of the strengths of VMware has been the ability to partner with the broad ecosystem. Dell Technologies or Dell EMC's biggest competitor is about $30 billion, which is about $8 billion less than VMware and Market Cap. Obviously there's great synergies between Dell Technologies and VMware. There's some angst out in the community that NSX, the whole picture, that whole glue won't be available for partners and other competitive vendors to Dell EMC. Can you comment on that? Sure. And I'll make two different comments, two different perspectives. One, we're going to continue to work hard to support the HPs, the Lenovo's, the Fujitsu's, InSper's, they are part of that ecosystem. We're going to work hard to keep making that available. I was just over in Japan. We announced the IoT partnership with Fujitsu and things are going well in our Fujitsu relationship. As I said, on the Q4 earnings call, my HP business group, my Dell business group faster by my HP business group. So they're seeing more success with us. We're going to continue to partner with Cisco and really find ways that we innovate together. I mean, they're here and it's not because any of us necessarily say, oh, is that the right strategic thing to do? It's what customers want. And at the end of the day, if you just say, do what customers want, boy, that's a pretty good guiding light. Well, you got a track record on partnering. Your point is Dell bogarding and hogging all the action. I would say that you deal with Amazon is proof point that you're going outside the quote, the family if you will. Proof point number two is the ecosystem is changing, right? And who the partners are. And again, the IBM and Amazon announcement last year, thank you, John. We're just smack on for this because how much revenue does Dell get when I partner with Amazon or IBM? Zero or negative, right, at that level. So clearly, I mean, they are saying, go do the right thing for your business, Pat. Go drive VMware aggressively, including other partners beyond us. But we also- That's a direct marching order from Michael, right? Absolutely, yeah. Me and Michael actually talked about this, maybe when that decision was made, I zined him a little bit on it, and we're like, hey, what's going on with you? And Pat and this VMware thing, he said I'm completely behind the AWS deal. That was amazing. He was. And in some ways, I'll say, I will say that he instigated it single-handedly, but he made very clear, and he personally called Andy on this to reassure him in that partnership. The other thing I'd say in the ecosystem, though, the ecosystem is changing. I'm worried about my partnership with Accenture and Cognizant and TCS and Wipro and Deloitte, they're part of the ecosystem as well, where they didn't used to be. Also, we have partnerships like Palo Alto Networks, which has Emerge and Arista and Checkpoint and Trend and 360 in China. They're part of the ecosystem as well. And clearly, we have a broadening partner community here of the... So basically, they're going to keep you in check. So basically what you're saying is... Absolutely, they... You have a lot of checks and balances going on across the board on the ecosystem. Changing gears, Pat, I want to get your thoughts. We talked about this a lot. Years ago, you made a quote on the queue, it's been pretty famous. If you're not out in front of that next wave, you're driftwood. And Dave and I use that all the time. You've seen many, many waves. What wave are you on now? Obviously, you mentioned NSX, but figure a picture when you talk to customers, because I wanted to try to get the impact of the customer. What wave should they be on, that you're riding, that you want to bring them on? Yeah, yeah. And I think, and let's look at that maybe from two different perspectives. There is so much hype in our industry, right? You know, the hype cycle, right? The curve of hype, right? The valley of despair, the plains of prosperity. And I believe that very thoroughly. And I joke about it all the time. And I rib some of my analyst friends on that at different things. Now, some of those things, clearly, IoT and machine learning, deep machine learning, I mean, they are very much in a hype phase right now. And I think the business reality of those is clearly less than the hype cycle would say for the near term. But I believe in those things. You know, there's other things like VR, AR, I'm personally not as enthusiastic on. A little bit further out on the waves. The short-term waves are what, IoT? I mean, if I'm a customer and you say- Well, I'd say, again, they're further out. We haven't got to the plains of prosperity in those even though we're laying track for what those are going to look like. The ones that I'm really excited, I think now, and we've been on the hybrid cloud banner for a while. Hey, I think this gets to be very real over the next couple of years in a big way. And I think people, you know, I showed my pendulum slide today, you know, from centralized to decentralized. You know, I believe some of the IoT intelligence moving to the edge will become a force that balances out some of this. Everything gets centralized in the cloud. And the realization that hybrid cloud really is the right answer in many respects. Cost, performance, privacy. And Wikibon just put out a survey of research yesterday. I quoted on the tweet, true private cloud is going to be a $260 billion market. So private cloud's not going away either. Hybrid is really the gateway for multi-cloud. As we were saying, do you see that same picture of multi-cloud having that gateway be hybrid cloud? Because multi-cloud really isn't a reality as we've been speculating. It's certainly coming. But latency issues. But hybrid cloud is a path. You have one with Amazon. Your thoughts on that trend. Private cloud, hybrid and multi-cloud. Yeah, and I think some of it is, we've talked about it and customers really haven't been able to do it very effectively yet. On multi-cloud. On hybrid cloud or multi-cloud, either one. And now it's really starting to, okay. Right, the economics made sense. You know, I have one customer, they're running their private cloud at 80 plus percent utilization on a consistent basis. Unheard of levels, right, at data center utilization because they have a good hybrid cloud. You know, the multi-cloud capabilities, you know, we're just starting to see customers with NSX being able to really operate in the multi-cloud way and we'll release those in the next quarter. You know, those things are going to, customers are excited about this. You know, we had for the Amazon service, we had almost 2,000 now, beta customer nominations for the less than 100 beta customer slots. I mean, this is like trying to get into Stanford as an undergrad. How is the Amazon thing going? Give us a quick update on the Amazon. What's the status? And obviously, great announcement. Great to see that. A lot of people were excited by that. I thought that was pretty good. Yeah, you know, you saw the demo of it today. You know, I mean. Which is cool to see it for the first time. Yeah, you know, a demo, you know, and it's elegant, right? You know, in that sense, if you're an Amazon lover, you sort of say, oh, I get it. If you're a v-center hugger, hey, I get it, right? You know, this makes sense. You know, peanut butter and jelly, bring those things together. I mean, it all works. And you know, as you know, it's coming along. Well, you know, we said middle of the year, we're on track to release that. So, you know, and, and I shuttered to think that I wouldn't have a great service before VMworld. So, you know, we're, we are heads down to have that available in the marketplace. A lot of enthusiasm for customers. Pat, I'm sorry, Intel here. I want to get a personal question for you. Cause we got to get the personal angle cause you always like to give some good insight. You come from Intel, the cadence of Moore's Law. You've lived that. You kind of have that in your DNA. You're at VMware, the chief of VMware. I asked Michael the question yesterday, what is the core big themes that are timeless in your, in your one core thing within VMware that's different? Obviously Moore's Law drives the cadence of Intel. Amazon, Bezos talks about lower prices, faster delivery. Michael said, listen to the customers and build, understand technology and ship it. What is VMware's timeless cadence or the key ingredient that in the DNA of VMware that you can talk about that you guys strive towards? Yeah, we sort of describe it as these fearless innovators. We just do things that as we turn hardware into software, we make the impossible possible and then we make it common and standard. And that's sort of this, as we take these hard things that only could be done in hardware, we turn them into software and we make them pervasively available and now you can't live without them. That's who we are in this fearless innovation that says, boy, if it's a piece of hardware that we can find a cool way to do it in software, we're going to do it. It's so fun. Everyone always talks about the VMware ecosystem and we even comment here, but I think it's interesting you have checks and balances with the ecosystem. What personal thing has come out to you over the past year that kind of gets you more focused in on just keeping your eye on the prize, share with some personal color on an observation, a customer meeting or technology conversation that keeps you in check as the CEO of VMware. Yeah, let me take that in two dimensions John, if I might, first, on the personal side, 2016 was the most challenging year of my personal and professional career, right? Just as you, I had two weddings and a new grand baby, so grand baby number three, that's really cool. I had a broken foot. I had a son who had chemotherapy last year for Hodgkin's Lymphoma, relocated one of my sons, we're selling three houses in Oregon. We relocated my in-laws, my father-in-law passed away, we've gotten mother-in-law. Deli, you've seen merger. Right, that was the personal side and then I'm dealing with the stock going from 80 to 40, back to 90, I mean rumors of my firing, of my being spun out, of HP murders, right? Yeah, I mean, and I'll just say, part of that is, your job as a leader, is to get through it, to lead your team through it. Some days, and I sort of, minister friend of mine, he says, I must be encouraged every day so I can be an encouragement, right? So I'm walking into the thing saying, man, this is crap, I better put a smile on my face because everybody's looking at my smile and to get through it. So part of it is really getting through a very challenging period. Perseverance and keeping the faith. Right, keeping the faith up, keeping your head on straight, keeping the positive attitude that we will get through it. And here we are, right? Well the scoreboard is pretty good, Pat. Your market cap is greater than HPE, we were commenting on the earlier, the public company and you're part of the bigger fold. Great opportunity, congratulations on your success and getting through that and continue to persevere and smile it. Yeah. Thanks for coming on theCUBE. Yeah, and like always John, and some of the customer things that we've talked about, touch briefly on like the IOT stuff and some of the things that we're doing, I mean, I talk about changing people's lives but that crazy scenario, we're doing that, right? I mean, we have customers who are building implantables and other devices around our IT technology, building new things that really it's like, we're going to make you live longer, we're going to improve your quality of life, right? And we're going to extend that into the next generation. I mean, this is just... I mean, if you're a young technologist or a scientist or developer or computer science or electrical engineer, I mean, what better time to live right now? I mean, all the things that are happening is with the magical machine learning, deep learning, it's pretty mind blowing. Yeah, we are blessed to be part of the tech industry and after 37 short years in it, I'm as fired up as I was the day I started. Pat Gelsinger here inside theCUBE, CEO of VMware, breaking down, sharing some stories, really giving the status of what's going on with VMware and all the success and also areas they're working on. Pat, thanks so much for coming. I appreciate your support. Pleasure, thank you guys. We'll be right back with more live coverage. Stay with us after this short break.