 Hello everyone, I'm John Furrier with theCUBE. We are here in Palo Alto at VMware's headquarters for a special CUBE on the ground. We're covering the latest updates from VMware. End of year predictions, or end of year commentary and predictions for next year. I'm here with Sumit Dewan, who's the Senior Vice President General Manager and user computing business taken over for Sanjay Bhutanen. Welcome to theCUBE on the ground. Great to be here. So end of year, you know, December our last CUBE event was Amazon re-invent, which was, I think we had 90 events that we went to this year. And, you know, the one pattern we saw was the shift towards, you know, a user-centric, data-centric kind of computing environment where Yasi Mobile's on the front burner on that one, but more cloud powering, all that innovation. Give us the update from your perspective. You guys had a lot going on. Sanjay was leading it now as a COO for VMware. But you guys had a robust year. You had a great ecosystem that developed. We covered the DocuSign Box, your partner event San Francisco earlier. What's the update? Well, first of all, congratulations to Sanjay. You know, always tough shoes to fill, if any of you know Sanjay. So, but excited because the market has become really, really interesting. You know, started out with the products being highly around management and security. And that was sort of the value proposition as people were just bringing on these mobile devices. But now it's become how people are going to be using the power of these mobile technologies and get their work done better, faster, easier in a simpler way. And that's why we did the announcement with the ecosystem, because the power of working lies in the applications. Talk about the AirWatch acquisition real quick. It was the update. That's been a big lift for VMware, certainly in the business side of the growth and the revenue we've seen that Sanjay's covered that. But where is it today and how does that look for 2017? Well, AirWatch, of course, is the platform that enables us to build what we call digital workspace. You know, the workspace, which is sort of where people access all of their applications from mobile devices is all powered with that AirWatch technology. So AirWatch sort of technology has become a core part of our workspace platform. And it's only going to go further from just mobile and security to now providing an experience across all types of applications. You guys have built a lot of features into that. We saw the announcements, you know, certain features that are unique to the enterprise. This year at Amazon re-invent, we saw the explosion of the enterprise cloud now emerging and VMware had a strategic announcement. We covered that also with Andy Jassy, Matt Gelsinger in San Francisco, where you start to see the cultures of VMware and AWS connect. And Amazon Web Services is still adding more and more services, these building blocks, so to speak. How does that impact your business? Does it accelerate it a bit? Does it change it? How does that, this new enterprise cloud change your business? See, heterogeneity is a good thing. You know, when all the apps were written for a single platform, all on premise, then they could be delivered in a certain way. And people could have been empowered in a certain way. When the applications start exploding, start going to multiple clouds, they still need to be accessed from multiple devices. And that's where our solution comes in. You know, the digital workspace and what we have built with Workspace One provides that experience of connecting all these applications running in all these different clouds to any device. We actually love the fact that there's explosion of applications on the cloud because it only accelerates the need for a digital workspace platform. The digital transformation, the CIOs out through the CXOs and also the architects, the solution architects are out there trying to figure out how to architect on premise and cloud in the digital transformation. Also, you guys are at the center of that with the end user computing group. And you're kind of getting in the weeds too on specific things like identity, for instance, is a big thing. How should CIOs and CXOs figure out the architecture for digital transformation? Because the digital space is one of the things you mentioned, has a lot of identity in it. There's all these nuance features in the enterprise. How should they be thinking about that digital transformation? Now that they have this on-prem and cloud, certainly with Amazon and VMware's relations, what's new, how does it impact? What specifically is the innovation and the enable it for you guys? Well, besides building out the applications that they have to do for digital transformation, you know, I think that every CIO needs to be thinking about three things. First, how are they gonna empower their users using these applications on different types of devices? Second, how are they going to secure the information on the devices because this information is now going to go outside of what their traditional security boundaries have been. And third, how they are going to build a platform so that the next time they're building an application, they're not continuing to reinvent the wheel over and over again. So user experience, having a management and security platform, and building some kind of a platform so that they're not reinventing this over and over again is the three things I would offer to all the CIOs. So business mobility has been a hot topic obviously on the enterprise side with, for the old days of VDI and some of the work space and stuff, but now that the consumer experience is now kind of blending in and converging with business, what are the drivers there that you guys see because mobility is what everyone wants. Yet there's some inhibitors on the adoption side such as, you know, data spoofing, security. We've seen a lot of IoT kind of hacks with DDoS and kind of a pedestrian stuff penetrating into the enterprise. So you got security, you know, the big thing about fake news, we joke about it in our media business, but people worry about fake data. How do you worry about, was it the right data, real time? These are the new concerns. Yeah, well it's actually quite simple. If you think about what's driving all of these security issues, is actually driven by shadow IT. And who drives shadow IT? And users, right? So it's a fundamental end user computing problem. And the reason why shadow IT is driven is because IT is not able to enable the users and the experience of the users to be able to embrace new applications fast enough. They can go to any kind of a cloud, sign on an application and get onto their device within a matter of seconds. That's clearly going to do what? Lowest common denominator on security. The least possible security of any specific application will drive the security flaw in the entire system. So that's the problem. We're solving with our solution, right? If you think about, if you have a platform that strengthens the security one way for all application and it provides a great experience, then if you are an end user, what would you do? You actually would want the application you want to be delivered through the same platform and increases the overall security. So it becomes a nice virtuous cycle in our assessment. So one of the things that Andy Jassy, the CEO of Amazon Web Services, talked to me about in depth was the old guard versus the new guard. You could argue that VMware's not totally an old guard like company, you've been around for a while, public company, but there is some legacy on-prem from an Amazon perspective. He talks about mostly how customers want to consume services like in the cloud. And Pat Gelsinger was talking to me about the same thing, that the customers are requesting more cloud hence the Amazon. What are the big changes that you see from a business model perspective around consumption of the kinds of services that you're enabling? What's going to change? What are the some areas that you guys are focused on to give customers more choice and more flexibility in how they consume services and how they buy from VMware? Yeah, yeah. Well, first of all, right, I completely agree that customers like consuming new services from the cloud. But that doesn't mean the way the business is getting done today and potentially for years to come, which is from the data and applications that are powering the data centers, going to go away for any sort of foreseeable future. So there is going to be this world where you're going to see combination of both on-premise applications, traditional applications, maybe cloud-based applications, all delivered to a range of devices. And just like in our partnership with Amazon, we sort of tie these worlds together. Similarly, for enterprises on their end user computing side, we tie this complexity together so that people can access the applications from any device. So to me, it's actually a win-win for the enterprise as well as the application providers who are building to the cloud, because now they can tie all of these applications with a single experience to the users using any device and make it mobile. Yeah, I've been bullish on the VMware, Stu Miniman I were talking, he's always more skeptical, but I'm very bullish on the fact that VMware customers now can have a road to the cloud. The question for you is on that point is what is the things that you've heard from customers around this opportunity? Have you heard anything positive? Have you heard concerns? What are some of the key conversations that you've been in around how VMware now has this hybrid, true hybrid path for on-prem and cloud? Well, customers actually really like the fact and they understand now VMware's cloud strategy. If you think about it, VMware started out as a company that provided freedom and flexibility for hardware. That's sort of what virtualization did, right? So they understand, so the value of VMware associated with how it provides freedom of hardware. Now, the next thing we did was we enabled mobility. Mobility is freedom of devices. And now once we are sort of announced this whole partnership with AWS and our hybrid cloud strategy, effectively it's taken the same freedom and now applied to cloud. So it's freedom of hardware, freedom of cloud and freedom of devices. And that sort of fits in what they expect VMware to be able to do because we did that for the hardware for them and we're doing it for devices now. So the nice thing about the end-users is one, it's at the edge of the network, truly with mobile. Summit, talk about the, because you're the general manager and senior vice president. So you hear from customers. And you also have to talk to the product guys. So talk about the roadmap out there and how do you guys look for your priorities for 2017 in terms of looking at balancing the fast pace of customer adoption and also changing the industry with what's on the product roadmap. What's the focus? What's the focus? I think first of all, the market interest that we have seen in our digital workspace solutions has been absolutely amazing. You know, we talk to our customers, we have an advisory board. So we give them $100 bills and every one of them votes on the money and guess what? They all put their money on it. Fantasy VMware, kind of like the project, which projects are gonna work. That's exactly what it is, you know. It's monopoly money, it's not real money. But they get their monopoly money, they put their money on it. And the number one thing that comes in is user experience and enablement of the users. Now you may wonder that people like making users more productive and all that stuff. But at the end of the day, what all of the IT professionals, which is who they are, they're the ones who are consuming our solutions, they care about is how end users perceive the service they're offering to them. And they want to continue to drive that experience up, making their people more and more so that they can work from any device, anywhere. Because when that happens, they actually get a much better life. Not just work experience, but overall experience. Talk about some of the cool things you've seen. Obviously, you see a lot. What are some of the coolest things that you've seen customers do on the end user side? I think a couple of things I'd mention. The first thing I would say is our customer, American Red Cross. So that's cool because our solution is what's powering all the volunteers in the American Red Cross to be able to access their applications anytime. Think about how many volunteers they enroll across the country to help when the problems or crises occurs anywhere in the country. Using our platform, they're able to bring these people, give them access to the applications for just the period of time in any location that they have to be located using any device that they may be accessing. So what's under the hood? What's cool that's under the hood? Under the hood? Unpack that. Under the hood is our mobile technologies because these people are bringing mobile devices, oftentimes their own, either phones or tablets, accessing applications. That's AirWatch. Sometimes they're also accessing applications that are not designed for mobile devices, but are designed for the current data center. So in the background, there is our virtual applications technology that's delivering applications from the data center onto these mobile devices. And of course, the great experience that puts all of these applications in a very easy to access with a single identity-based framework that provides a single sign-on experience to all these applications. To me, enabling something like American Red Cross who's involved in saving lives. How many people are involved in this power? You're talking about 200,000 plus volunteers that come in and out every given year. You get to manage those services at the edge of the devices, phones and what not, iPads and mobile devices. That's right. You're doing much more than that. You're empowering and enabling them for not just managing the devices, but also enabling them to be able to access applications instantly. So predictions 2017. Give us some predictions for what's going to happen this year. First of all, I think 2017 to me is what I call Act Two of Mobile Innovation. Act One, if you think about it, was all about, hey, I've got these BlackBerry devices that are going away. They're being replaced with smartphones. How do I get them embraced in a secure fashion? We've had great success in it. We have clearly become a dominant player. Act Two. So to me, Act Two is all about enabling people to be able to access the information and applications from any device in a secure fashion. This whole concept of workspace, which is all driven by mobile, by cloud, like you mentioned, in a heterogeneous world that we live in, is going to be the foundation for 2017. And what are we doing about it? I think you'll see us do some interesting things because this world requires a lot of connectedness of application, just like in a consumer world. You go into now, Yelp or Maps, and you search for something, and all of a sudden, you can see the Yelp ratings. Why can't we do that across our mail and sales force? Or as you were coming in with a calendar invite that you knew you were going to be talking to me and I was going to be talking to you, why didn't we have information about LinkedIn, about us, just in our fingers? The joke on theCUBE is I'm going to be replaced by a bot here, so, you know. Certainly a mobile device. But I could have had push notifications saying, hey, you know, there's some cutting edge news and I want to ask about, what about competition? How are you guys going to compete? What's the competitive strategy? Obviously, IBM has been talking about their new workspaces as well. I think they call it workspaces, I think, or workplace, you got Facebook out there trying to get into the game as well, and Oracle's out there, the big red gorilla out there in the market. How are you guys going to compete? The red gorilla, huh? Anyways, so. I don't want to say 800 pound gorilla, but the red stack, but they're very good Oracle on Oracle. I mean, we're, they have some success there. Yeah, I think when I look at our digital workspace solution, I think I'd say the, you know, the, right now, the market is in a still a state where there's not that many solutions that are truly defined as digital workspace. So, actually, we would welcome a little bit more of companies coming up with solutions that are similar to them, because then the market starts developing and starts growing from just a management and security to more and more workspace solution. Having said that, I think in terms of competition, the competition space is very siloed. There are either players that offer VDI solution, or there are players that offer mobile management solution, or they are offering identity solution. No one's really put them together into a solution like what we have done. And, you know, we've taken good 18, 24 months to put this thing together. So, we think it's not going to be trivial in 2017. What's the identity strategy? Talk about identity, because that's a hot button. People want to know, how do I federate identity, because that's, no one wants to have 10 different versions of an identity platform within there. Yeah, I mean, if you think about what's happened, right? Identity, which is all, used to all be tied to Active Directory, back to how we started, Cloud. Cloud applications came along. Well, what happened? Salesforce is not building their application on Active Directory, or on Azure AD, or in Google Directory, or Amazon Directory, they built it themselves. You know, worked it at the same thing. So, to me, the directory concept of all cloud applications being written on a single directory is no longer going to be the case. Instead, what you need is to have a platform that puts users identity in the center of defining the user's workspace, okay? Which is based on who you are, what applications you can access, and the context that you're coming on should be able to define an experience for you. So, if you're coming in from a mobile device, and let's say you're from VMware, hey, it's a trusted friendly network, you can get access to the applications. But if you went to any other of networks that are not trusted, or on a device that's not trusted, maybe you have restricted access. To me, that's the change in identity. Identity is no longer just a single entity buried in a directory. Instead, it's the foundation of how the workspace is defined. Because the users are in control in that environment. That's right. Now, also, as a result, what ends up happening is it provides a little bit more self-service experience. Now, you can decide, on this device, I want to access applications that you need for doing the interviews. Whereas, on the personal device, you only need some other corporate applications that you use for mobile access. So, soon we'll have our AI and machine learning, all the good stuff, and augmented reality into the queue. That's my final question, is VMware is a very geeky culture. It always has been. It is. We're proud to be geeks. It's true. That's why Amazon, that's why I like the Amazon relationship, too, as Sanjay pointed out. Yeah, it's the geeks meeting each other. This good culture, there's not a collision, it's some synergy. But you guys must talk about some of the geeky cool things that are happening, like AI, augmented reality, virtual reality. Yes. That's right. Your thoughts on where that is, half-baked. You guys see some promise? What's your thoughts on that? Well, I think in general, the space is still half-baked in my assessment, even though there are some really cool and compelling products now. I mean, at the Connect conference in September, we announced partnerships with some of the key players who are creating these AR and VR-based devices that are coming in to the workforce for doing things that are in the shop floors and manufacturing to some of the back-office functions in the warehouses. So there are some interesting devices coming in, and we, of course, secure them and manage them. There's also some interesting sort of technology that you can use for, again, accessing your workspace. In our labs, we have some of these people walking around with AR and VR devices and clicking on the AR. Clicking on the AR. Clicking on the AR. Accessing their applications. But I do think that the technology is in development. I think 2017, we're going to start seeing that come into the workforce because these devices that are very sort of, at this point in time, defined as rugged devices for back-office or for warehouse functions, they all have a reason to go to AR, VR. Just the form factors and the cost and the pricing will go down over the course of next 12 months. And when it does, it's going to be great because we already have solutions that enable and empower these devices very well. In 2017, what's your thoughts on where data will be stored? Obviously, customers want to protect their data and trim as where people are, but some are saying cloud could be. So now this goes from AR, VR, to more of AI. I think the data plays a big role because at the end of the day, if you think about the problems with this secure shadow IT, one of the issues is there's just so much information. I call it DD, BD, it's data data and big data. The reason is because there's so much data out there, eventually it becomes a big data problem with this mobility. If people are accessing these applications from all the places, if they all have self-service access to the applications, there's no way anyone who's running IT can manage and control the environment. All of it has to be done through analytics, through intelligence, through self-learning of the platform. And that's what the role of data is going to play in this workspace. Exciting, very exciting stuff. So Ma, thanks so much for coming and chatting with theCUBE here on the ground. We are on the ground at VMware's corporate headquarters in beautiful Palo Alto, amazing campus. And we'll be back with more coverage of theCUBE on the ground at VMware. Special presentation of theCUBE, I'm John Furrier, thanks for watching.