 Covering VMworld 2015, brought to you by VMware and its ecosystem sponsors. Now your hosts, John Furrier and Dave Vellante. Okay, welcome back everyone. We're here live in San Francisco for VMworld 2015. This is Silicon Angles theCUBE. This is our flagship program. We go out to the events and extract the signal from the noise. I'm John Furrier, the founder of Silicon Angles. Show my co-host Dave Vellante, founder of Wikibon.com, Wikibon Research, Silicon Angle blog, SiliconAngle.com, SiliconAngle.tv, which is theCUBE, which we're doing here, and Wikibon.com, which is the research team for Silicon Angle Media. Thanks for watching. We are live in San Francisco, getting ready to go live with the keynotes here at VMworld 2015 to hear the smashing news, what's happening, what's going on with EMC, the Federation, what's going on with VMware and the ecosystem. Dave here with the analyst perspective. Dave, I got to ask you as an analyst, covering the cloud, big data, and also infrastructure, what's going on with VMware? I mean, I'll see VMware as a leader, like Oracle. They have a huge install base in the enterprise. They have a lot of happy customers, but over the years, the business has shifted. Certainly, VMware is under the EMC Federation, owned 80% by EMC. So you have kind of an interesting situation where the tail is wagging the dog, if you will. Seems like VMware wants to break out. Seems like VMware needs to be free. It seems like EMC in storage just isn't what people want, even though there's a lot of storage here. What's your take on all these conversations? Well, I mean, EMC's acquisition of VMware, for 635 million, was unnatural in many respects. I mean, had Cisco purchased VMware, it would have been a much more natural fit. EMC, storage company, storage being such a problem, it was just a very strange relationship. And I think Joe Tucci and EMC's board has played it perfectly. I mean, they spun out 20% of VMware. They got value out of that. They created this independent organization that was able to flourish as an ecosystem. And then what do they do? So that sort of appeased the sort of, the Diane Green era, that we have to have, you know, maintain our independence. Then they bring in this visionary Maritz, who puts forth this vision of a software mainframe that essentially they executed on. I mean, VMware had and still has a huge lead over OpenStack and even Microsoft Hyper-Veo, but Microsoft has closed the gap considerably. But the big thing that Microsoft has done is it commoditized the hypervisor. And then you combine that with the other front that VMware is fighting, which is Amazon, and you've got a challenge. How do you expand your TAM beyond the hypervisor? And that's why we saw the NYSERA acquisition going into NSX. That's why we see the efforts around VSAN and EVO. That's why we see VCloud Air. We see the acquisition of AirWatch. This is all about expanding the TAM to justify a 30, 40, 50 billion dollar ultimately a hundred billion dollar valuation. Okay, the top hallway conversation so far here at VMworld on the streets of San Francisco is EMC under siege by Gordon Gekko, Elliott Capital, the Gordon Gekko of today's marketplace. Really putting a gun to Joe Tucci's head saying, move faster, increase the stock price, break up. I mean, really destructive, evil kind of behavior these hedge funds take. I mean, ultimately, are they right for the takedown? Is it justified? Is Elliott Capital just a corporate raider? Is VMware looking at it, wants to make its move? What's your take on all this? Because there's a lot of different perspectives. I mean, I look at Elliott Capital, I just see just a disruptive evil genius in just maximizing share price. But if EMC loses VMware, you could have a lot of thousands and thousands of people unemployed in your neck of the woods in New England. Or VMware could be the lead dog. Again, all this going on, where's the value? What's going on? Why is this corporate raider pushing the envelope on VMware and EMC? Well, what's going on is the stock has gone sideways for years. I mean, even you look at VMware up and through July, S&P was up a few points, VMware was down. And so there's been huge pressure from investors. The other piece of this is 55, 60% of EMC's valuation is accounted for by the 80% of VMware that it owns. So investors are saying, well, wait a minute, I look at NetApp as a much smaller company but it has on a revenue base, revenue multiple, much higher valuation. What if we spun out EMC as a standalone company, spun out VMware? We'd make a lot more money as investors. Let's do it. They could care less about the 10 year roadmap. They want their cash now. So what EMC has done in VMware. But this is the short term perspective. That's probably that. They're investors, right? Gordon Gekko, as you say, I think you're right on there. So what has EMC and VMware done? They've done what any company would do in this day and age. Stock buybacks and dividends, all right? Instead of spending money, I mean, they spent a lot on acquisitions but they have to balance it out. Stock buybacks, dividends, acquisitions, R&D, it's the balancing act. So this is where you get what D. Raj was talking about is that steady incrementalism, keeping the investors at bay, throwing off cash, being able to attract new talent, having enough money to be able to acquire new companies, it's the cartel model. I mean, we asked Cho Chishita Federation but this comes back down to what will EMC do now? I mean, obviously, Joe Tucci's tenure as CEO, his contract is up next year early in the year and then the truce that happened, they gave him LA Capital Two board seats, that expires tomorrow. So are we gonna hear something on stage on these keynotes that's gonna address that? Are they gonna let that sleeping dog lie there? What do you expect to see? What does your gut tell you? They're not gonna touch it in the keynotes, in my opinion. In the keynotes, we're gonna talk about the software to find everything and it's gonna be, what do big companies do it? They bring out the marketing and the messaging and they lay out a vision of the future so that they appear and are relevant to the customers because they know if they're not relevant, they're toast. And so they're gonna lay out a vision of the software to find data center, virtualizing networking, virtualizing storage, making things simpler, connecting to the cloud. That's what we're gonna hear. It's gonna be a heavy, heavy, heavy dose of messaging. I don't think they're gonna touch the acquisition or the other rumors. The two scenarios, by the way, just to lay them out is that EMC will reacquire the 20% that it owns in VMware. That's one scenario. The other scenario is a flip side of that is VMware takes on a ton of debt and acquires EMC. Which should be, talk about on natural acts. That would be like a snake swallower. Or EMC creates some sort of holding company to put everything in there. So we're gonna wrap here. Well that's what they have now. We're gonna wrap, we're gonna go to the keynotes right now. Again, the public cloud market is driving this. Wikibon just put out the first research, wikibon.com for the new public cloud. Market share numbers are out. First research firm to do that. Again, the public cloud is driving all this Amazon, all this disruption. We're gonna go to the keynotes now to hear from VMware live here in San Francisco. We'll be right back.