 Live from Las Vegas, it's theCUBE. Covering VMworld 2017. Brought to you by VMware and its ecosystem partner. Welcome back to theCUBE. We're on day three of our continuing coverage of VMworld 2017. We've all counted our steps, lots of steps we've gotten in, lots of great conversations. I'm Lisa Martin with my co-host, John Troyer. We're joined now by two guests who are new to theCUBE, Chanda Dhani, Senior Director of Product Marketing, Storage and Availability at VMware. Welcome to theCUBE. Thank you. And you're also joined by Mark Vaughn. You're the Director of Strategic Technology Group with Presidio, welcome. Yes, ma'am, thank you. So guys, we're day three of, hopefully your feet aren't too sore, of VMworld 2017. Big announcements on Monday about VCF on AWS. Yesterday, the Pivotal Container Service with Google. Pat Gelsinger mentioned on Monday, 10,000 customers on VSAN. Chanda, what have you heard from customers at the event? What has their reaction been to some of the great news that's been announced? So customers are actually really excited. They see VMware evolve and become more and more mature and bigger and they see us as a partner. In the context of VSAN, they are even more excited. I met a lot of customers who wanted to try out our hands-on labs and these were actually storage admins who were like, I'm really interested. Can you guide me through this process? I had a session on Sunday and I thought people are still pouring in, checking into the hotel and the session had four, 500 people and it was on VSAN and there is so much of excitement. So it's really, really amazing. Great time for VSAN right now. Wow, did Pat say adding 100 customers a week? Yes, we are adding 100 customers a week. That's remarkable. And it sounds like you're seeing maybe a shift in terms of the skill types that are wanting to learn about this technology. Exactly. VI admins have always been a champion but what has been very interesting this VM world that a lot of storage admins have come to the show and they are all at the hands-on labs in the sessions wanting to learn about it more and more. From a market perspective, Mark, question for you. Given that, sounds like we, and we're hearing quite a bit, John, over the last couple of days on both of our sets here. Generational shifts, skill set shifts. In terms of shifts and trends in the market, what are some of the data center trends, Mark, that you've heard articulated on the show floor and from your partner VMware this week? Well, there's definitely the shift with VMware Cloud on AWS. That's been a real emphasis this week, which again builds on what we've been doing in the private data center. So building on VSAN, building on NSX, building on the VMware ESX hypervisor. So those are some trends we've really seen and honestly in the data center in general, we've seen a shift in storage the last few years. So it's moving more towards an emphasis on the software. So whether you're releasing that now as a virtual appliance or a cloud appliance or going a step further and having a solution that is totally software defined like VSAN, we're beginning to really see the emphasis move from hardware to software. So Mark, we've had a lot of innovation in hyper-converged infrastructure in the last few years with VSAN being one of the pillars of innovation, but the market is interesting. A lot of players in the market, some being pulled out, others entering. Where are we in this whole evolution? What is the state of hyper-converged infrastructure and hyper-converged storage in 2017? As we look so much to public cloud and it's been such a buzzword for the last few years and we've noticed that a lot of our customers have moved to it and then realized it doesn't work everywhere. But what attracted them to the cloud, they still want even when they're on the pre-em data center now. So they want that flexibility, they want the ability to scale easily, they want flexible billing as well and consumption based models. And so software defined storage in VSAN really create the ability to, you may not want everything in the cloud, but you can still have what you liked about the cloud in your own data center. And so that's part of the modernization story that we're walking through with a lot of our customers. John, how are you seeing in consumption models? Software versus VMware ready nodes, build your own partner ecosystem. How are people taking, is it in the cloud, is it on-prem? How are people taking VSAN? Actually, this is one of the key reasons why customers like VSAN, the wide choice of consumption model that they have, they can fully customize it, build it themselves, they can go with ready nodes. They also have a choice to go with the appliance based solution which we have with Dell EMC called VxRail. And they also like the choice that what they could do on-prem, now it's, they can do it on AWS and it's just yet another site for them. And for example, disaster recovery as a service is one of the use cases they really want to move forward with. I just came back from a customer meeting explaining to them how it would work and they're really excited and waiting for it to come. So you mentioned Dell EMC and one of the questions I had was just about one year post combination of Dell taking over. One of the things that was very clearly articulated during the keynote by Michael Dell himself was that the importance of the VMware ecosystem really growing and the independence. So long time partners, Presidio and VMware talked to us about your channel strategy and how it's going to evolve or is evolving as you need to give customers this flexibility of private public hybrid based on their needs and this consumption kind of driven model. How is the channel strategy evolving to facilitate that? You both can take a shot at that. One thing I've noticed up front when it comes to consumption models is we're actually seeing vendors like Dell and other OEM partners beginning to offer consumption models where you can actually now get hardware on six month, one year, shorter term where it gives you that flexibility the cloud of you don't have to make the long term commitment to hardware. You can flex, you can grow. Even when it's on-prem, you can still have some of that flexibility and we've also worked out some cost models for some of our customers where we can help them have that flexibility and consumption models to allow them to actually grow on-prem in a similar way that they would in the cloud. And Joanna, kind of the same question for you that the channel strategy, kind of what do you see as some of the next steps to make that channel and even the partnership with Presidio even better? Right. So actually Presidio has been a very successful partner for V-SAN and talking about channel strategy, if we look at it, V-SAN today has 10,000 customers. V-Sphere has 350,000 customers. We are not even 4% penetrated in our own install base and given the tight correlation between V-Sphere and V-SAN, we all know that V-Sphere attained this large install base through our channel. So for V-SAN to have such a big install base and increase our penetration, it is actually channel that will do that for us and Presidio is well ahead on that curve right now. So our strategy actually is related to server refresh. It is projected that by end of 2019, about 60% of our customers would be going through a server refresh and as they go through the server refresh, they adopt hyper-converged infrastructure more and more because they're buying these new servers, they say might as well buy a ready node and we want to ensure that our channel is well equipped to take advantage of this wave that is coming. So there are many things we are doing, for example, number one, that they are able to build their practice and Presidio is quite ahead there but rest of the world is able to do that too globally. And secondly, we are trying to simplify and streamline things for them by having packages which they can sell easily. For example, we have a package of vSphere and vSAN called the HCI Kit where we have designed it such that the most profitable way to sell vSphere is to sell it with vSAN because if they sell vSphere, if they qualify the add plus at the back end is 10% but if they sell the HCI Kit, which is vSphere and vSAN, the back end add plus is 30%. So for our channel, the most profitable way is to sell it along with, sell vSphere is to sell it along with vSAN. Then we have also designed a whole bunch of sales tools like they can go into an account, do an assessment, do a whole sizing for the vSAN ready node, do a full ready node configuration with our OEM partners such as HPE, Dell, you know Fujitsu, Lenovo, et cetera. They are all at the solution exchange here and then they can have a full TCO conversation. All of this is now available for our channel and we went ahead and did a practice builder workshop in all major cities globally to help them come up to speed on all this stuff. There are many other programs and we are now providing POC gear so that you can actually do successful POCs too. So it's now execution for us. Yes, and it's been great because VMware has really created an ecosystem that we can work well within and it actually creates a journey for our customers. So we've been able to walk a number of customers, I was working with a customer just this week that has been a long time ESX environment for their VMware hypervisor. Probably four years ago, they began using vSAN early on and since that time they've moved, vSAN is now their primary storage and now they're moving into deploying NSX and as that is going along, they're beginning to look at the realized operations, they're beginning to look at AirWatch. So it really creates an ecosystem that we can walk people through the journey of moving into these and there's often opportunities where we can come in and do a number of these at a time but there's also a lot of opportunities where customers kind of need to mature their own process and grow through this journey. Mark, I'd like to drill down on that a little bit. I mean, I've known you for years, right? Back in the day when the virtualization admin was the role that was just created and started to bridge some of those silos between storage, networking, Windows, security teams. Let's talk, we talked about the channel, let's talk about the customer uptake and enablement on their side. Who is the, who are the people that are being trained on this? Is it still, do folks still have the traditional storage admin? Is it a combined team? Who's buying it? Who's responsible for it? And how are you helping them succeed with VSAM? We really have to approach that based on each customer's individual makeup and we need to see how their organizations worked out, whether their skill sets lie, but we see that really as a mix. It's been much the same way with networking. At first there was networking was separate from virtual networking and they quickly realized as 80, 90% or more of their environment became virtualized, you can't just sit outside of the hypervisor, you have to be participating in the network inside the hypervisor as well. So there's definitely skill sets that the storage admin brings to bear that the average system admin doesn't have. So it's really a partnering of the two and I see the same thing with cloud. So where virtualization admin was a niche 10 years ago, now you can't work in the data center if you don't know how to participate in the virtualization environment and you're not familiar with VMware. Cloud is kind of becoming a niche, but in five years you won't be able to work in the data center if you don't know cloud. Yeah, what's one of the trends that we've seen as well just in doing some reading online is that it used to be everybody was trained, that would come here to VMware would be trained in virtualization and certifications and now we're starting to see that shift towards cloud. It sounds like there's been this natural evolution that's been customer driven in terms of the enablement and the education, but you're now seeing the importance of the guys and girls that are storage admin, maybe the system admins as well, the VI admins. How are you guys working together to sort of tailor the conversation as more, you can see a diversity in the types of people that are interested in this technology and as the conversation maybe even on the storage side goes up to the C level because the story massive amounts of data that's got to be able to extract value from it for new lines of business. How is your enablement evolving as these skill sets are shifting? All right, so the name hyperconvergence actually says it all. It's not just causing convergence of technologies, it's causing convergence of people and skill set and teams as well. And that does include people who used to be just compute admins and storage admins and network admins now. So going back to the context of how we are doing the enablement, I think what we are doing right now is helping each side understand the value and having them come together. Earlier they used to work as silos and now the teams are coming together just as the technology is coming together. And as regards talking to decision makers in the organizations, at the CIO level people are more interested in competitive advantage for their own organization. And we find that the hyperconvergence technology allows the entire organization to move fast. So CIOs are able to do their business initiatives in a much faster way, get their profits coming in a much faster way, their risks are minimal. So they like the technology for that reason and VP of infrastructure, applications, et cetera like the technology because it streamlines the operation, standardizes the process for them. Virtual VI admins have always been a champion because it's so easy to use for them. The learning curve is very less. And storage admins really like it because at a time when their traditional array is running out of capacity or horsepower they don't have the budget to go and procure something new. They do have the budget to go and acquire a few servers and SSDs. They are still able to move forward and give the organization what it needs within the budget constraints and yet meet the timeline. So this is something which is driving a lot of convergence. And storage has always been so critical to how virtualization works and operates from VMotion to DRS to so many baseline features. They relied on the underlying storage. So the storage admins and the VI admins have been growing closer and closer together for a long time. But what we're seeing with Hyperconverged and whether it's on-prem or especially in the cloud is it's not only changing the storage technology but it's changing the cost model. So now the conversation also has to happen at a business level of, is this going to be CAPEX? Is this going to be OPEX? Is this going to be a traditional purchase method? Is this going to be a consumption method? So the conversation now actually has to transcend from just the technology to also the business impact and the business drivers behind selecting one method or another. Absolutely, absolutely. And that's a theme that we're hearing a lot as customers talk about digital transformation. Well, I love the plan words with convergence and it sounds like the different folks that are now really needing this type of technology are folks that you've had the chance to speak with at the show. So we want to thank you guys for taking the time on day three to come and chat with us on theCUBE. Thank you. Thank you so much. For our guests and for my co-host John Troyer, I'm Lisa Martin. You've been watching theCUBE live on day three continuing coverage of VMworld 2017. We'll be right back after a short break.