 from Las Vegas, it's theCUBE, covering AWS re-invent 2018. Brought to you by Amazon Web Services, Intel, and their ecosystem partners. Hey, welcome back everyone, live here in Las Vegas for AWS, Amazon Web Services re-invent 2018, CUBE coverage, got two sets here, three days of wall-to-wall coverage, my coach Dave Vellante, Dave, six years. Man, so much action going on. Unbelievable. A little few more people here than there was in 2013. It's almost as big as VMworld, VMworld. Our next guest, Mark Lomair, Senior Vice President General Manager of the Cloud Platform Business Unit from VMworld CUBE alumni, welcome back, good to see you. Right, yeah, thanks for coming on, Mark. So, like, joking aside around VMworld, this is a partnership that you had that's deep and meaningful, and it's been two years with that Ragu and Sanjay and you guys did the deal with Amazon. Both are involved, Pat and Andy. Now, with the cloud announcement on-premises, you have Outposts, which is two versions, one with the VMware component and one with Amazon Stack. And it's a hardware device. It's a appliance. Did hell just freeze over? What's going on? Tell us what the announcement is and your role. So I think the first thing that's kind of interesting about this is it really is, from my perspective, and I think both companies perspective, the next big phase of the expansion of the partnership between the two companies. And from the very beginning, I think we've tried to be very customer-focused and very customer-driven. And if you think about what we did in the first phase, we took the core VMware set of enterprise-class capabilities and delivered them on the AWS public cloud. It's been going great, great customer traction, reaction, we're rolling that service out around the globe, as you heard from Pat and Andy this morning. So that's been incredible. And then two months ago at VMworld, we announced a new dimension to the partnership, which was bringing AWS services back onto VMware on-prem. That's RDS, that's RDS, yeah. RDS, absolutely. And we felt pretty positive about that, but to be honest, the customer feedback to that, in terms of the level of positivity that even took us by surprise. I know I want to toot our own horn, but we like to sometimes do hunkle-humble brags on theCUBE, Dave. Actually all the time. But we called this, we predicted that the world would polarize into two main personas, developers and operators. And if you look at all the successful large-scale things, Google is a great example, they got SREs, Site Reliability Engineers, they see operators, and then developers. So this is, you guys own the operator market, enterprise. So talk about this personas, I think this is now legitimized and it's changing the jobs of people on-premises because the whole trinity of infrastructure, storage, networking, can compute, that's never going away, it's changing. The changing is causing a ripple effect. Can you explain that? No, absolutely, right? So I think one thing we see from virtually all the customers we talk to is you've got this core IT operations team that has this set of skill sets, experiences that they've built up in their own data centers. And what they're hearing from the business though and the developers and everyone else is we want to have the flexibility to develop apps, deploy apps, run apps, wherever the business needs. Sometimes that'll be in the public cloud, sometimes that'll be in the data center, sometimes that'll be in the edge. Sometimes you have applications that actually span those different environments. But back on the IT side, you don't want to have different tools in each of those three different scenarios. You want to have a common infrastructure across those. And so that's one of the key sort of driving motivations behind the VMware strategy. And I think you're really sort of seeing that brought to life in the context of the partnership with AWS. So the other thing that we called, we said that AWS is going to have to go after hybrid because it's just too big of a market and customers want it, their customer focus. So now you see Outpost, which is AWS hardware. They emphasize it's the same exact hardware that they use in their data center. So talk about that a little bit, what your role is there. I mean, you're a software company, so you're like, great, we want to run on anyone's hardware, beautiful. So as Andy announced, AWS Outpost is an incredibly compelling concept. And it's this idea that AWS is delivering compute and racks of AWS compute and storage into the data center. It's based on AWS designed hardware and in fact the exact same AWS designed hardware that they run in their own public cloud. And then it gives customers the same APIs and control plane that they can take advantage of in the public cloud. So that's a very attractive sort of proposition. Now, if you sort of look at VMware, right? And where our partnership with AWS comes into this equation, what we're doing with them is we're effectively enabling two variants of a solutions on top of AWS Outpost. The first variant we call VMware Cloud on AWS Outposts. And the way to think about this is it's effectively exactly what we did with them and built with them with VMware Cloud and AWS in the public cloud, but now we're bringing that same thing back on prem. So it gives customers in their data center the full cloud experience. We manage the life cycle of the software for them. We're responsible for the SLA. You can scale the capacity up and down seamlessly. All those same benefits of VMware Cloud on AWS, now on prem. So we think this is going to be transformative for the data center, right? You think about being able to get the data center operators out of having to worry about the life cycle of either the hardware or the VMware software on top is going to be huge. Okay, so that's, that's very one, right? That's very important. That's the VMware version. Yeah, so that's VMware Cloud and AWS kind of the first on AWS Outposts, the first variant. By the way, just to wrap up on that one, we think that one's going to be particularly compelling to customers who have standardized on vSphere in their data center, right? Because it's the same vSphere stack because everything's the same. So we're really excited about that and the opportunity that represents for customers for us and for AWS. The second variant is VMware Cloud Foundation for EC2 on AWS Outposts. So the way to think about this is if you're a customer who has built your application on top of native EC2, right? Native AWS services. And now you want to extend that application into the data center, maybe the edge, for very specific use cases. Maybe it's low latency. Maybe it's a manufacturing floor. Maybe it's video processing close to the edge, right? You want to extend that same infrastructure, you know, into the data center. You're obviously going to want to continue to run those workloads on EC2, but also then these new requirements emerge when that's plunked down in the data center, right? And the people that are operating that, they're going to want to have a consistent network model that spans everything else in their data center and now this new Outposts environment. They're going to want to have a consistent security model, et cetera. And so what we've done with VMware Cloud Foundation for EC2 on Outposts is brought those VMware enterprise class capabilities around networking and security and storage to that environment. So the question is, can I get server lists with Outposts? So AWS's plan is to enable the vast majority of their native services that they make available on the public cloud on top of AWS Outposts on-prem. I don't know specifically on server lists, but that would be probably part of the business. Let's talk security, I have a security question for you. So you guys are in the virtual machine business, so with Lambda and EC2 compute, I can run VMware under the covers and put a security model around containers and maybe take away the ability to manage Kubernetes clusters. So how do you see that? Absolutely, so I think one of the interesting things about this solution we're creating with them is clearly it will be able to support Kubernetes applications running on top of it, both variants. But now you think about, to your point, security, networking and management, how do you handle those things? And so that's an area where we think we can bring a lot of value to bear. One example of this is NSX, right? So customers use NSX to secure their workloads on-prem today, do micro segmentation, secure networking traffic. We're bringing the full power of NSX to both of those variants. So now customers can have a single networking software layer and networking security that spans everything they've already gotten their data center, plus these new outpost environments. So that's a great example, and particularly, I think it's going to be particularly relevant as they start deploying applications in Kubernetes on top of it. So several years ago, we coined the term true private cloud, which is on-prem infrastructure that substantially tries to mimic the public cloud experience. Of course, what was missing out of that was really the public cloud through, they had Azure Stack and certainly Oracle's got some action, but this totally redefines that space, maybe it's true hybrid cloud. Well, the only way you got to change the title is actually it's cloud. Exactly, I love that way of thinking about it, which is the distinction between private cloud and public cloud has now completely gone away, right? There's one cloud. The data center is just a large edge. Yeah, a really large edge. And what we always said is true private cloud is like cable ready. It's going to be hybrid ready, well now it's ready. Yeah, absolutely. Big game changer. All right, I got to ask you some questions around competition and landscape, because if this trend continues, you're going to see new kinds of companies emerge out of the ecosystem. Right. AJ talked about the ecosystem evolving to be more service provider oriented. It used to be back on the tech days if you remember just a few short years ago that when you got venture funding, you had to build a platform, build moats. Jerry Chen talks about moats and competitive advantage. Build a platform. Now, if Amazon and VMware are now a platform, I can actually start a business and have a nice potential big business. Absolutely. By leveraging that as a platform. Absolutely. And competing against big companies, like for instance, I'll just throw one out there. Service Now. I decided I'm going to compete with Service Now. I'm going to be the best IT operations, ITIL, but I'm not going to have to build all the stuff they have. I'm just going to go pick one thing I want to differentiate on. I could do that. This is going to change the landscape. I absolutely agree with that. I mean, you think about this platform we're creating together between AWS and VMware. It's got the richest set of capabilities, services, et cetera that anyone can take advantage on top of it. And so now if you're a technology vendor, this becomes the platform that you want to write to. And if you look at the VMware DNA, back from the early days, I think we've done a pretty good job of always embracing the ecosystem. Embracing the technology vendors, the ISVs. AWS has done a tremendous job of this as well. And so I think, from my perspective, it's a great opportunity for that next startup that wants to build the next great service to lay out on top of this. That's really interesting. I mean, you mentioned Service Now, Salesforce, another one. Somebody's still going to write the app. But those guys, both of those guys are increasingly putting stuff on Amazon. I mean, I use Service Now because they're biggest success. No, but it's a really good thought exercise is how does that evolve? Well, I bring it up because if you're vulnerable, if you're out in the Serengeti and you're wandering your heads down, you could get taken out. So it keeps everyone on their toes to create value. It creates more of a level playing field, right? I think it makes it easier for new entrants to come in and differentiate themselves, right? You can use the platform, so buy or build, level up. Absolutely. So it's certainly changed the investment strategy. We're going to have Pepper Jerry Chen on that when he comes on about that question. What else is happening with the announcement? What are the things that people don't know about or conversation you've been involved in that you'd like to share about Outpost? So I think, it's early obviously, we just announced it this morning, so we're still sort of getting the reactions, but so far from customers and analysts I've talked to, it's resonating really strongly, right? And it's this idea of, hey, public-private cloud distinction has gone away. There's now just sort of one cloud, there's this one platform that I can leverage across data center, you know, cloud and edge. And so we're really looking forward over the next year to executing and delivering this with AWS. Every customer I talked to yesterday and the day before at the analyst event basically said, look, I've got, I don't know, whatever, 30, 40, 50% of my workloads are technical debt, I'm not moving them. When we asked, are you interested in this? Every one of them, yeah, of course we're interested in this. It's exactly what we wanted. Well, so here's another interesting thing I heard from someone which I, to me, captured the essence of it, which is they said, hey, you know, 70% of my workloads are in my data center, 30% are in the cloud, but the cloud has this as-a-service model, this flexible consumption model, all these things that are so compelling. What you're doing with this is you're bringing all the things I love about the public cloud consumption model too, the heart of where all my workloads are actually running today, right? And so that, to me, was an interesting way I thought to capture a little bit of the value we're being able to deliver to customers. And when we cover this, it's going to be big news, it's going to continue to go. Hybrid cloud is now validated. You guys have done a great job helping AWS become more enterprise-capable and scaling. They're helping you with developers. It's great partnership. I think it points to co-creation, co-opetition, anytime you have co-creation and co-opetition, it's a rising tide. So it's a great market. It's a good time to be in the business. Congratulations. Yes, thank you. Great news coming out of AWS re-invent, obviously hybrid cloud on-premise stuff that we thought would never happen years ago. Your quote, Dave, today's article on SiliconANGLE.com. Stay with us for more breaking coverage. Jerry Chen coming up next from Greylock is going to break it down for us in a special analyst segment with Jerry Chen next. Stay with us.