 Live 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, Amazon Web Services, AWS re-invent 2018, 52,000 people here. Two days, second day of three days of wall-to-wall coverage here at theCUBE. I'm John Verde, Dave Vellante, Dave, six years we've been doing theCUBE. We've been to all re-invents that for the first year. We've been a customer. We've been following these guys. Plus the summits. Plus the summits, great ecosystem, and VMware and VMworld, similar dynamic. We're going to talk about that now. I'll see the new announcement on-premise, it's huge. Want to dig into our guest, Sanjay Poonin, who's the Chief Operating Officer of VMware. Sanjay, great to see you, CUBE alumni. Many times, thanks for coming back again. John and Dave, pleasure to be here. Thanks for coming on. Great to see you. Congratulations on all the success. Wonderful booth and presence here, and I think this is becoming the mecca of all IT events. We have our new video cloud source on L and AWS where we're ingesting over 110 videos. We'll have 500 short video clips behind it, tons of blog posts, tons of coverage. There's an insatiable appetite for Amazon and web services content, as Andy pointed out in my interview with them, and it's just the beginning. You guys at VMware, really, I mean, talk about a similar moment in the history of the computer industry, and VMware was, when you guys recognized the sea change of operators on IT and cloud developers coming together, you guys were very proactive two years ago. Ragu, yourself, and the team, Pat, we're going, hey, you know what? Let's just align. Cultures are fit with Amazon. Let's co-develop, let's ride the wave together, and let's see where the chips fall. Which is basically, oh, simplified, but that's kind of what happened. So much has happened. I saw Ragu last night at the Greylock partner event. This is a historic moment. Good outcome so far. Deep partnership, meaningful partnership. A lot of resonance in the marketplace. You guys are iterating and raising the bar. That's Amazon talk for success. How do you feel? Yeah, no, I think it's absolutely right, John. We, if you think about how this has evolved, you know, five years ago when I joined VMware, I felt like cloud and containers, the two C's were our big headwinds. We've turned those headwinds now into tailwinds, but it took some catharsis from us. We had VCloud Air, our own public cloud. We had to divest that. And I think the Amazon VMware coming together when we announced it two and a half years ago was like a Berlin Wall moment, where you had the US and Soviet Union getting together. That was good for world peace. People were surprised because these are two purported enemies now, and it really built trust and step by step launching VMware on AWS, announcing RDS on VMware, the beginning of on-premise. And then today, announcing Outposts, it's just an example of not just, you know, the validity of VMware as a hybrid cloud leader, but the strength of this partnership. We have a very special relationship with Andy, Pat, myself, our group, spent a lot of time with that team. And often you can't tell when our engineering teams meet when an Amazon engineer and a VMware engineer are apart from each other. They're like finishing each other's sentences. That, we don't do like Mickey Mouse, Barney, you know, press releases. It's real stuff. And the culture of the engineering culture of VMware, which has been a core, you know, cultural thing, the DNA of VMware is technical. Very community-oriented, Amazon, technical, very operationally efficient, good community. This is a good fit there. I got to get your perspective though on how that is going to evolve, specifically around on-premise. Certainly Andy Jassy validates on-premises with the announcement at VMworld, which you guys covered. Pat Gelsing uses words like dial tone, Kubernetes, mentioned containers. Andy, when I asked Andy, you know, you told me in theCUBE five years ago that everything's going to the public cloud. Change of tune, you might have, I pin you down. No, John, you can pin me down all you want. He says good leaders are self-aware. He said, our customers wanted this and he's cool to it. And the partnership with VMware highlights that this is not going to happen overnight. He recognizes the duration, the role of on-premise. And then he also says that the data center is like a big edge. So if everything's cloud, what you guys basically announced with Outpost is cloud, public cloud everywhere. So just, there's no public, private, it's just cloud. This is a game changer because- Absolutely. Just, why wouldn't I want to buy this product? I mean, first off, congratulations on scoring that interview. Not many people have access to Andy that way and you guys have built a very good relation. I thought that interview you did with him was phenomenal. There was a special point in that, John, where you tried to get him to talk about Outpost, it's before you announced it, which is will Amazon go on-premise? So a couple of months ago when Andy called us and Matt Garmin to talk about this project under NDA, it was a continuation of those RDS type discussions where we've basically said, if you want to do anything on-premise, you should do it with VMware because you're going to have to go through this door called VMware. We are the de facto king of the on-premise private cloud world. Many of these customers are used to our tooling, vSphere, vMotion. They want anything to run on VMware. So from that became a sequence of discussions that really, really evolved very quickly and well so that we can announce this together. I mean, Andy had three guests on stage and only one partner and that was VMware and that's an indication of the strength of this partnership. Vice versa of the 50,000 people here, probably all of them have VMware on-premise. So if Amazon's going to do more on-premise, why not do it with the leader in that area of VMware? And we want to be in the software industry, be de facto standard for software defined infrastructure. And that's a special space that we can fill. Well, the amazing thing to me is here's VMware, no public cloud, Amazon wouldn't even say the word hybrid or private cloud, doesn't use private cloud, but it wouldn't say hybrid before. You've now emerged as the tandem de facto leader in hybrid cloud overnight with an ecosystem that all wants to connect and partner with VMware and all wants to partner with AWS overnight. I mean, it feels that way anyway, 24 months. I mean. I think that's absolutely right. I mean, we were the first to start using the term hybrid three, four years ago as we did it. It took a while because I think a lot of customers and some of the public cloud vendors felt it was going to be binary, all public cloud and no private cloud, but they began to realize you need both. But your point on the ecosystem also surrounded, I just came back from meeting one of the top SIs in the world. They're betting big with us because they see this as the place for both of them and they're also betting big with AWS. The system integrators are all over this. The security vendors all over this Palo Alto Network Splunk want to see. Often many of these companies come to us and say, you have cracked something special in your relationship with Amazon. How did you do that? And how can we follow that model? We're happy to share a playbook of how we think about ecosystem. So we want to create a platform just like Amazon's a platform where everybody, SIs, tech vendors, software vendors can all plug into. And the other observation I make is, you know, previously the distance between infrastructure players and the guys who really are driving application value, the application developers was quite a distant. Now it's closing with infrastructure as code and it's just so transformative for organizations. I think, and one of the things that's making that is microservices and containers. And as you know, since we last talked, we acquired Heptio. Think about Heptio, they're the founders of Kubernetes. And they left Google, started their own company, Craig and Joe, and we're excited about that. That platform will augment PKS, which was our big best in containers, and become something that could run on premise or in a public cloud environment like this. We acquired Cloud Health. Cloud Health is a multi-cloud management tool for costing resource management. That becomes something that could sit, a lot of Amazon reps actually refer Cloud Health as the preferred way to get your insights into, so we're beginning to see this now a lot more clearly than we did two years ago, thanks to this partner. So Sanjay, I know the outposts, super excited to be covered on SiliconANGLE, zillion stories on our site on this whole event, but it's not going to be shipping for about a year. But you guys already have some working products now. What's the current track to that shipping? Because when that comes out, that'll be a game changer. Why would anyone want to buy hardware again? Michael Dell wins either way, because he's got VMware. But others will sell hardware. This is real, it could be a killer blow, but I don't want to, you can comment on that if you want, but what's in between that one year? You've got product now. Out of customers move along. Yeah, I think there's some very tangible things that, first off, VMware Cloud on AWS is, as you've described, the best hybrid cloud option. You get the best of the on-premise world in public cloud, we announced hundreds of customers. We have a goal to get to thousands of customers and then tens of thousands of customers. We're going to continue down that march. I want to have a significant number of our 500,000 customers. If Amazon has 40, 50% market share based on some of the numbers that Andy shared today, a significant number of our customers have Amazon, we should get them onto VMC, VMware Cloud and AWS. Secondly, we do have, we announced project dimension, some edge computing capabilities running on existing hardware players. So we are beginning this journey ourselves in terms of cloud managed on-premise environment, right? Project dimension was announced before this and that will run on Dell and Lenovo hardware and that's well and good to go that will have edge IoT use cases. And then when Amazon comes and get this ready, we would have learned a lot about this market, which is really kind of this edge computing market cloud managed. So we're not going to be, we're going to plan and do the other pieces. Much of the software components that VMware is building is not completely from scratch code. We're taking NSX, one of the most important components that VMware's adding to Outpost is NSX, okay? We're not rewriting NSX, we're taking the NSX and applying this now to a use case that's very much like that because we've adapted NSX now to be container friendly, cloud friendly. We've added NSX into the branch, fellow cloud. So those are the things that were, there's no rest for the weary at VMware. And that gives you a consistent networking model which is not trivial as we talked about. One of the things that I'm excited by and intrigued by is, I know it's nuanced but I see it as a key point, containers sometimes don't meet the security boundary issue. So you guys can run a VM around a container and run it under the covers with Lambda at super lightning speeds. It's not like a 10 seconds instance to stand up. So that means there's more opportunities to create more abstractions around Kubernetes and maintain security. There's so many benefits from this integrated kind of concept of consistency of operations for the software developer. John, you're absolutely right. Part of what we're trying to do is that word you talked about, consistent infrastructure and operations. Consistent infrastructure and operations. And the container, if you've been seeing some of the ads in San Francisco Airport, we have some in London and a few other airports in New York, you'll see an ad that says containerware. It's playing on the word where, VMware. We want to be everywhere, W-A-R-E. And if you think about the container being as pervasive as the VM in the future, I'm not going to say we're going to change the name of the company to be containerware, but we want it to be as pervasive as VM has been in VMware. So we have tens of millions of VMs in the 20 years we've had. Maybe there'll be 10 times as many containers. We want to become that de facto platform and containerware starts to take over, right? What is that Kubernetes based? And we'll partner with the best. We partnered with Google there, we partnered with Pivotal, some of it with LAN on AWS, some of it with LAN on Azure. And you get a lot of the flexibility you have with that microservices platform. So since you guys are on more of the software side, obviously Amazon's got software, but you guys actually are going to be much more broader, multiple clouds. As Amazon moves up the stack, I would imagine that as customers, I'm not going to buy into only one cloud. There's other clouds out there. You guys can become a real strategic reversal between clouds. So we were debating will customers have certain instances and say different clouds for especially unique things, but yet run still horizontally scalable on premises with VMware across multiple clouds. I think, John, it's going to be a lot like the hardware market was 20 years ago. It started to evolve into two or three major players. What's today Dell, HPE, Lenovo, at the time it was IBM, they had divested into Lenovo, Cisco. In the storage place, two or three. I think the public cloud is not going to be three, five, 10, it's going to be two or three, maybe four. And then maybe in China or Alibaba. So already we have certain tools that cloud health proposition is to manage cost resources across multiple clouds. So we began to be already thinking about what does a multi-cloud world do? That said, in areas like this, which is a data center offer, we felt it was good for us to focus and get VMware cloud and AWS to be the best hybrid cloud option. Give that a couple years rather than trying to do everything and do it poorly. When you peanut butter your approach and try to do a lot of things with various different, so this is why we put a lot of special attention on VMware cloud and AWS. We have an offering with IBM. We announced something with Alibaba. And due course, VMware will need to have multiple cloud offerings. But I feel like this partnership and the specialty and the specialness of this has really benefited both sides. Well, it's going to be very interesting because IBM just made a 34 billion dollar validation of multi-cloud. So, and we talk about competition all the time and it's evolving. We have a very good relationship with IBM. And listen, you have to be reasonably nuanced in your partnerships, okay? So we're going to partner very heavily with IBM Global Services. We're going to partner very well with IBM Cloud. We're going to compete really hard with Red Hat. That's okay. Well, we'll compliment Linux, the bulk of their revenues, Linux. But make no mistake, we're going to compete hard with OpenShift. That's okay. That doesn't mean our IBM relationship is competitive. There's one piece of that, a very small part of the Red Hat revenue OpenShift that we overlap. The rest of it is complimentary. We can be nuanced. It's sort of like walking into a gum. We can do both. And that's how we play. Before you wrap. Now, you know what we think of you. We think very highly of you. You're a superstar in our minds. However, you got to interview Sushmita in India, a true Bollywood superstar. Yes, amazing actress, beautiful, talented. That must have been quite an experience. Well, I got to tell you, I was very intimidated. I opened, because somehow I get assigned all these interviews to do. Malala, I'm usually on the opposite end. Your end, Malala and Condoleezza Rice. And I told her I was really intimidated by it. She said, why? I said, it's the first time that I'm usually not tongue tied. But I did not know how to explain to my wife that I was going to be interviewing Miss Universe. Okay, and she's like, what do you guys do at VMware? I mean, what the heck does Sushmita Sena have to do? But it was a good interview. I mean, listen, for the India audience, we were celebrating our 20 year anniversary. She is an amazing woman who has achieved something that very few Indians have. And we wanted our Indian audience there to see that women can be successful. She's a big supporter of more women in business, fairness, equality, no prejudice, equal pay, all those things that we stand for, which is part of our values. And if it worked for the India audience, she probably, I don't know if she would have worked at a VM world. We had Malala there. Oh, Malala, that's fantastic. We had Condoleezza Rice, last hell's kick off. We do these because we want to both teach our employees something, but also inspire them. And sometimes these speakers help with that cause. Sanjay, great to see you. Thanks for coming on. I know you got to catch a flight. Big day today for you guys at VMware. Congratulations. Thank you very much for having me. Great to see you. Great commentary, great insight. Sanjay Poonan, COO at VMware, breaking down the announcement of AlPost's relevance and impact of the market. And more importantly, the VMware, AWS relationship secure, bringing you all the action, day two of three days of wall-to-wall coverage, two sets, hundreds of video assets coming, tons of posts on SiliconANGLE.com where all the coverage is. We'll be right back with more after this short break.