 Welcome to VMworld 2021, a two day virtual event hosted by the company which permanently changed data center operations last decade. My name is Dave Vellante and you're watching theCUBE's coverage of VMworld 2021 where we want to know what VMware and its ecosystem have in store for the next 10 years and how your digital business can survive and thrive in the coming decade. And who better to give us a glimpse as to how that's being done both inside VMware and within its customer base than Mike Hayes who's the chief digital transformation officer at VMware. Mike, great to have you on the program. Now Dave, thank you for having me. We appreciate you and all that you do for this great event. Thank you, sir. Oh, I appreciate that. So talk about what's involved with your role as chief digital transformation officer. What's that all about? Yeah, thank you for many people a chief digital transformation officer in a lot of different places, different things. Here at VMware, I'm responsible for worldwide business operations and digital transformation of the firm. Just like first and foremost, we're focused on our customers and how our customers can improve their own business models whether it's cost, flexibility, speed, imagining new things. That's what gets us really excited. And at the same time, we're transforming internally in order to bring ourselves into our exciting third chapter. Yeah, everybody wants to be a SaaS company these days. VMware obviously is accelerating its move towards SaaS. Maybe you could talk a little bit about your strategy for leading business operations as well as that transformation. Absolutely. I think there's a couple of things. And first of all, the most important thing in an organization is agility. We have, or transforming our own ability to transform. As we all know, everybody listening knows that markets don't sit still. They pivot quickly. And so the organizations that win aren't the organizations that prepare for tomorrow, but they prepare for the ability to change for tomorrow. And as the markets change, they stay ahead of that. So that's what we're doing at VMware. And that's what we're really excited about our entire suite of products and services so that we can help organizations do the same. Yeah, so if I could stay on this for a second, Mike. I mean, when you think about what you have to deal with there and you're moving to that kind of as a service subscription model, you got the external factors. You mentioned you start with the customer, but you also have internal factors, right? Your salespeople might be used to, you know, a one and done move on to the next one, more transactional. It's a whole different mindset, isn't it? It absolutely is. And so, you know, any organization as large as VMware is always, should always be staring at itself and saying, how can we be more flexible? And so we just like everywhere else are looking at our foundational data. We're looking at our ERP systems. We're looking at our own internal processes to say, as we pivot the SaaS, you know, and the back office becomes closer to the front office. You know, that's really where it's at. There's not a customer in the world that cares about any of their, any of their, where they're buying from, the back offices from where they're buying from don't matter. What matters is that experience. It's that front layer. It's that first touch with the customer. We recognize that and we're preparing for that. And I'm really excited about how it's going. Let's talk about some of the waves that you're riding here. Major trends that are driving digital. I often call it the forced march to digital in 2020. It was like we were just thrown into the fire. And that's just the way it was. If you weren't a digital business, you were out of business. And now people are kind of sitting back and saying, okay, let's take those learnings, fill those gaps and really set us on a course over the next decade. So what do you see as the major trends? What are the technologies that are enabling digital business? And how are you applying them both in your own business? And what are you seeing with your customers? Well, first of all, I think what's important is to recognize that every organization needs the ability to scale. So what we're doing at VMware is simplifying our foundation. And so then as we 2x or 5x or 10x our own business, we're multiplying off a much simpler base. And so as we drive our own transformation, our internal principles of like simplicity and clarity and accountability and really streamlining is what VMware is doing. And that's what we're also not surprisingly recommending and helping our own customers with. And so that's what gets really exciting for us. I think that one of the things that you're alluding to with this force march to digital, which I totally agree with is really it is about experience. And for us, there are a couple of KPIs that are really interesting to us and it should be for everybody, no surprise here. But the velocity that it takes for operations to go from an idea to a closure, from quote to cash or from idea to implementation, whatever that front and back end words your own business uses or what's important, but how fast do you get through that? And so for us, we're imagining a touchless future. So no, are we there yet? Absolutely not. Is any organization very few are? And so how do we constantly say, ask ourselves, what don't we need to be doing? You know, when I walk into a room in a lot of places, VMware or otherwise, you say who's in charge of what we're not doing? You know, that's where all the good ideas are. The good idea space is like what organizations aren't doing. So you have that culture of pulling awesome ideas to the front and saying, how do we just prioritize? The hardest thing Dave right now is that there's so many shiny objects for all of our enterprises, for everybody that's listening. I think one of the hardest things is prioritizing and saying, how do we spend our resources in the smartest way possible so that we are doing the things that will have the greatest impact for our customers. Something that we feel like we have a great plan for and we're excited about the execution over the coming year. You know, what if you could comment on what you're seeing is just in terms of sort of spending patterns. You know, all throughout last year, we reported that CIOs expected budget contractions of around 5% relative to 2019. And what happened is in sort of the second half, he really saw companies had to respond to the cyber threats, they had to respond, of course, to hybrid work, this whole digital march that we talked about. And, you know, it was actually pretty strong. Many people expected that a lot of the traditional companies that relied on kind of data center and on-prem and HQ spend were really going to get hit and they actually got through it okay. And meanwhile, you know, the cloud is exploding, your cloud business is exploding, you know, security is exploding. What was interesting is just this weekend, we published some data that suggested that is not only continuing into 2021, but CIOs are expecting, you know, more of this in 2022. So we used to have this sort of, you know, steady IT spend, refresh cycles, et cetera, but it seems like we're in a step function right now in terms of investment. And it seems like CEOs are saying, if we don't lead this digital transformation, we're going to become toast. Absolutely, Dave. Well, you know, the first thing you mentioned was budget. Let's remember budgets are a function of a company's focus on either short-term goals or long-term goals, you know. And so the organizations that are really smartest are thinking three, four, five years out and you're investing now so that you can always really be high performing in that two, three, four year window because any organization that mortgages its future for this current year is not doing itself any favor. So the cycles that I'm seeing that are aligned exactly as you described, organizations are understanding key leaders get that they need to invest. But the question is, how do you invest in the things that are classically thought of as maybe back office or let me just say boring just to be provocative? How do we choke out the boring stuff from a budget standpoint and then really give a lot of oxygen and energy to the things that are fun and really transformative? And that's what we're seeing and that's why we feel like our strategy is so great Dave because we're part of that for the future and as organizations think about freeing up capital so that they can invest in those fun things that really accelerate their own business models that's what it's about. Now VMware of course has always had an amazing ecosystem always been very proud of the value that you created not just for your own cells but for your customers and also your ecosystem partner. So as it relates to your digital transformation role we talked about customers we talked about some of the internal stuff and operations how does the ecosystem fit in? How do you collaborate with them? What kind of learnings do you get from them? How do you plug them into your digital platform if you will? Absolutely, I think the most important element you're drawing out Dave is the concept of trust. We have incredible partners and without whom VMware's business and success that we enable in the world would be very limited. So we recognize that we all go through life with friends and partners. It's obviously not just true in business I was in Navy SEAL for 20 years and the most important thing is that foundational element. Now what we do and what we're always trying to do is be as transparent and fast and helpful as we can. I think that in the partner world anytime you can reach across the table more than halfway with another organization that's easy to intersect. If you're not willing to meet people in places more than halfway there is no middle. So for us what we're doing is constantly listening and getting feedback and saying where can we improve? That's what's really awesome. Sandy Hogan is an incredible colleague of mine who runs our channel and Sandy runs a board with 30 of our largest partners in the channel. And the first question that she always asks is what can we be doing better? And that's for us the most important thing is listening just like you were developing an individual product what's important is product market fit, right? Does your product fit in the market and then how do you get feedback from it? We apply that as an institution and an enterprise. Mike you mentioned your experience in the military thank you for your service. I wanted to ask you something about that. So I wrote a piece one time and talked about Frank Slutman who's kind of becoming a Silicon Valley icon how he's going to apply his playbook and his new company and he wrote me back. He said, Dave I learned in the military that it's not a playbook. I am a situational leader and I learned that in the military. So my question to you is what did you learn as a Navy SEAL to deal with situations especially in a condition like we are now where it's a lot unknown? How do you apply that in today's world? Yeah, look the parallels between the SEALs and BMWR are perfect, right? Because all we're doing is quickly defining an outcome. What's the vision for the organization? What's the outcomes we'd want to achieve? That's the where we're going. Then there's the strategy, which is the how. How are we going to get there? How do you develop strategy? There are a hundred different ways to go achieve the vision but how do we think about the different risks along the way? And like I said earlier, draw those risks out so they're known risks. Then we can price them and size them and understand that for our strategy. Then how do we execute well and how do we get feedback throughout the whole thing? But you know, Dave the best thing I would say the analogy from the SEALs in the military really is what you hit on. A lot of people say that they have a plan but in the SEALs the only plan that we had was for our plan to change. It's that concept I said earlier of transforming our ability to transform. So we go in on any given night with complicated missions and have a plan but we knew that that plan was going to very quickly change. It's no different than what we're doing here at BMWR with our own customers in this technology market. So a great lesson to apply, Mike. I really appreciate you sharing that and appreciate you coming on theCUBE. Thank you for having me. It's such a pleasure. Really pleasure was ours and thank you for watching everybody. Keep it right there for more great content from VMworld 2021, you're watching theCUBE.