 Go, extracting the signal from the noise, it's theCUBE. 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 are here live in San Francisco at Moscone North, the main lobby before the keynotes. This is SiliconANGLE Media's theCUBE where Wikibon and SiliconANGLE team up together to put on theCUBE where our flagship program. We go out to the events and extract the civil noise. There's 60 year here at VMworld. I'm John Furrier, the founder of SiliconANGLE. I'm John McCos, Dave Vellante, founder of Wikibon.com. Our next guest is D Raj Pandey, CEO of Newtonix. A CUBE alum has been here many times, growing startup. We interviewed D Raj when you were just a small startup kind of making its way through the ecosystem. Now you guys are blowing it out, great revenue. Congratulations. I'm sure IPO's on the horizon soon. Great to see you. Thank you, all is a pleasure. One of the things I love chatting with you about is the disruption. You guys have always been unconventional even when you started the company. And we talked about that on theCUBE. And I want to get your perspective now that you guys are doing very well in the marketplace with your product and your offering. Big name accounts, obviously funding has been phenomenal. Growth is there. What's the dynamic right now in the market? I'll see hybrid cloud is what people are talking about. Still elusive in terms of the definition. What is the transformational disruptor right now? What's happening from a customer standpoint? What are they looking at right now? What is the pattern? What is the real trend that you're seeing that's disrupting the market? You know, the biggest one that drives us and the reason why it drives us is because that's what's happening in the market is around products that just work. And when I say products that just work, it's about ease of use. It's bringing the consumer experience into the enterprise. And it's happening in a big way. In fact, the new metaphor for the enterprise is Uber and Amazon and Apple and so on. I think that is basically going to be the biggest bastion to be captured. And the big companies are actually sucking wind there because you need new design points. You need to be fresh. You need to be having an empty canvas where you start to design things. The innovative dilemma that actually comes to the big companies is what do you do with all that you have? And how do you leave that and really start on an empty canvas? We're seeing a lot of conversation around this innovation strategy. Certainly the big vendors, EMC, VMware, they're all talking about an HP, IBM, Uber, Netflix, kind of teasing out the cloud native perspective. Cloud, obviously the disruptor, DevOps, cloud native. What the hell does that even mean? One, and two, what is the innovation strategy that customers are taking? What are you seeing on that specific thing, this innovation strategy around cloud native and DevOps? I think the biggest strategy that customers have, at least in the last three, four years that we've observed is that they're starting small and they're willing to take risks as opposed to buying big machines. I think that's one big change, which means they're doing more projects and they're letting the people go and experiment more frequently than having to really do a waterfall-based project as opposed to agile methodologies, which, you know, go and experiment if you have to. And for that, everything must change, all the way from infrastructure to middleware to the way people build apps to collaboration, crowdsourcing, offshoring outsourcing, I mean, everything, including the idea of social collaboration with Slack and Yammer. I think that's what we see in the marketplace out there. Cloud native is a means to an end. I don't think it's an end in itself. In fact, I disagree with those who believe that the value will move from infrastructure software into the cloud native app itself, because now you're basically saying that 95% of the developers, who actually are Ruby developers and Python developers and, you know, .NET C-sharp developers, they should understand, you know, issues of consistency, availability, network partitioning. There's a lot of profound topics in distributed systems that a lot of these people don't appreciate. So it must be pushed down into a common layer. You know, to bring the elegant separation of concern that's required between software developers, those who understand a lot of these issues around reliability, availability, performance, distribution of data, replication, things like that, and those who understand business logic, you know, who are good at writing tons of business logic and mixing and matching services. So I don't know if cloud native really means infrastructure software goes away. If anything, it's more of infrastructure software to really go and solve for some of these issues around business continuity, data protection, for MongoDB, for Cassandra, for Apache Storm, and things like that, you know. So, I mean, I think we believe it's a big opportunity. CNA is a big opportunity. You're saying underlying infrastructure still matters. It just becomes simpler to those who use it. Consume, actually, yeah, to consume, yeah. And it's programmatic. Absolutely, it's API-driven. No, we've had you, D. Raj, we've had you on now for several years. When you're just getting started, you obviously focused on the VMware partner, plugging into the ecosystem. That's evolving. Last year we saw Evil Rail announced, and we said, what do you think? And you said, well, confirmation of what we're doing. So, that's great. Seem very calm. At .next, your conference in June, down in Florida. Great conference. Congratulations, huge. You know, we were there. Thank you. And covered it. It was very exciting. So, it's amazing to see how things have evolved. Give us the update on your strategy and talk a little bit about the reception to Acropolis, which is essentially this heterogeneous management platform more beyond hyper-converged infrastructure. Yeah. So, let's start with the second question first. You know, four years ago, people said you can't consume storage like this. Because, you know, storage is a separate box. It will always stay the separate box. This is a science project. You guys, just because Hadoop could do it, and just because Amazon and Facebook and Google do it, doesn't mean the enterprise will. Think four years fast forward, you now realize HCI is actually a term that VMware and every large company is actually talking about. Acropolis is now the next step in that same direction. We said we have very successfully made storage invisible. And now it's time to make virtualization invisible. So, we're not really trying to come up with a new hypervisor that competes with ESX or Hyper-V. We're saying how would we embrace it, subsume it, made it transparent, made it somewhat to the point where application folks can manage all of infrastructure. Like if you go to a Splunk guy, or if you go to an Epic guy, they don't know what VMware means. Right, I mean, people talk about all these NFV transformations that are going to happen in the telcos and so on. A lot of these App guys, they don't understand infrastructure. So, you've got to make the hypervisor really, really simple. You know, similar to what people said about lunch with storage, you know, back in the day and how we got rid of lunch, I think we have to get rid of a lot of abstractions that are very prevalent in the virtualization world. I mean, Amazon doesn't talk about hypervisor that much. You know, it's basically AMIs and you don't pay for it separately. I mean, you just pay for your VMs and elastic load balancer and EBS and S3 services. Hypervisor is basically a means to an end as opposed to an end in itself. So, Acropolis, the focus is to really, you know, take it away from underlying infrastructure and take it back to the app itself so that the app owners can really deal with something that's invisible. And two things matter there. Obviously, the hypervisor is an important technology but it should just work out of the box. You shouldn't have to pay for it separately. And lastly, I think we need to work on the V motion of the next decade, you know. This is basically the metaphor that I use that what VMware did 10 years ago, 15 years ago, was to really move applications or operating systems across hardware, two different motherboards. But they didn't have to deal with storage in the backend because it was still in the same private data center. Now, if you do this at a higher level, if you up level the notion of the motion across VMware, to Hyper-V, to Amazon, to Azure, back into Acropolis and so on, you need the drag and drop as the new design point. And that's what we're working on in this thing. So, I want to, I mean, fundamentally, that's your strategy. Pat Gelsinger recently said we've committed ourselves to a heterogeneous management strategy which allows us to be managing in multi-cloud environments both on and off-premises, including AWS and Microsoft Azure. At the top of the segment, we talked about the fragmentation that's occurring. So fundamentally, you've recognized that. That's a part of your strategy. Do you feel like VMware is delivering on that or can deliver on that? Look, it's all software and companies do go and reinvent as well. So, the proof will be in the pudding in the next three years. What's important to realize is, again, can VMware really abandon vCenter? And can they abandon the scaled-up SQL-based application that they've actually built as of 15 years ago, where the design point was actually Microsoft admins. 15 years ago, they were saying, how do we make it such that VMware ESX is seamless for the Microsoft guy or gal? And they copied pretty much every design point of Microsoft, SCVMM, and back then it was called Microsoft Management Console MMC. So what you see in vCenter today is basically a design point of the 15 years ago. The left pane, the right click, the tree structures, the accordions, the drill down, the middle pane, the bottom pane, and so on. And the application is SQL-based, so it's not a distributed app. It's not really based on NoSQL. It runs on a single large Oracle or single large SQL server with basically a Singleton middleware and so on. So I think all that has to be sort of disrupted. And I can go back to this empty canvas. The question is VMware has 600,000 customers, and they have to maintain those customers, and keep them happy. And at the same time, they have to think about this new decade. So being able to balance the two is where the real execution of goodness will actually go. So if I can interpret what you just said, you said maybe they can do it, but the economics are going to be difficult and the innovation, speed of innovation is going to be difficult. And my next question was, where do you come in? And that's where you come in, I'm presuming. Yeah. I mean, as you said, we're also becoming a large company, and we will probably suffer from the same kind of things over time. We can't keep saying we are small and small and small. When we go to the large guys, they are like, how big are you? Because they all expect to work with companies that are largest, so we're trying to always become a large company. Now if you look at Prism, which has been our design point from day one, we were the only company, and I'm going to reiterate this, we're the only company that said we'll never put our user experience inside the vSphere UI, only company. Everybody was bending our backwards, they will actually put it in vCenter at the tab, and the moment you are a tab inside vSphere GUI, you're basically adjunct to what the true nature of consumer-based design really is, you know. And we've never lost a deal. I think we always use the APIs, so we have back-end integration of vCenter database through APIs and services. So why is that? Because this speaks to the consumption. Making things invisible, first of all, it's a good strategy, right? Making storage invisible, making virtualization invisible, always a good strategy from a competitive standpoint, because it takes away complexity. That's the logic, I see that. But why the consumption? You took a risk there, it paid off. Talk about that consumption of how the enterprises are consuming infrastructure, and why did you guys hit that nerve there? I think the most important thing to us was that the consumer, the end user, is king. They're the ones who actually drive consumption. And if you were to really think about the end user, they're going through a big transformation in their personal lives. I mean, you know, John is wearing an Apple iWatch, and a lot of practitioners in the data center infrastructure space, they wear an iWatch, they have an iPhone, an Android phone, they have an iPad. I mean, they use Uber, they use Amazon for pay for one click and so on. That same experience had to come into the enterprise, you know. And that has been our biggest bet and our biggest push from day one, which required an empty canvas. We could not have gone inside this environment of vSphere UI and said, can we recreate that? So I got to ask you about the innovation strategy of VMware, Visa V, the marketplace. And I want you to bring in the entrepreneurial perspective because VMware's out there, the boat that's kind of out there and the winds are shifting and we don't know which way the sales are going to be put up for them. So we're going to watch that. Moreover, the startups are pretty much out there. Big ones are funded. You've been an entrepreneur out there when you started your company. What's going on in the startup ecosystem? What are you seeing? And what does it take these days to be successful in the enterprise as an entrepreneur? I think the biggest thing that Microsoft did when Satya came on board is to get rid of the strategy tax. He said, there is no platform. There's no such thing as a platform. And that is the biggest, I would say, weakness of large companies when success gets into your head. And you now say, we are a platform company and all we do is about our own stack. It's one stack and one stack for all. What Microsoft did was disruptive and very innovative. They said, we'll go and deliver apps for iOS first and then Windows, you know, a phone if you have to. I think that's probably the biggest thing that customers are actually demanding for. Don't come here and treat me like I'm locked in because there's a lot of disruption going on. The internet in the last 10 years, social media, I mean, basically, there's so much more awareness about new products that people are willing to give the new things a try. And you know, the logistics of shipping and getting things up and running and drag and drop of applications from the old stack to the new stack, all that's happening. So customers are saying, I want to innovate because I'm also going to be disrupted. I mean, if you think of JPMC as a bank, they could be disrupted by payment companies because more than half of what they do is actually payments. In the old days, it used to be, okay, enterprises wouldn't buy from startups. Now they are buying from startups, as you're saying. Why is that? Is it more because it's a little more lightweight? Is it less risk? Or is it more risky or not to buy from startups? Or is it because people need banking and not banks and there's a realization of that? All of them actually, but it's all of them. But the most important one is there's more awareness. The world is shrunk. I mean, about 35% of our business is international. And this was unthinkable in the day and age, like 10 years ago when there was hardly any Twitter or social media or internet being used around the world. People said that the biggest bastion for large companies is awareness and marketing and brand and so on. You can build brands faster now than you could do. Okay, so what's your advice to startups out there that want to get into business or have cash from, say, venture caps or angel investment? What's your advice now in today's market vis-a-vis when you started Newtonics? When you weren't getting a lot of love at the time because you were looking like you didn't fit the pattern. But now I see you guys proving them wrong, which is great, which is why we love your story. But today, what's the challenges, what's the opportunities for startups? I think the biggest opportunity is, and I'll go back to two of my favorite terms, distributed systems, build software that actually runs on multiple machines, provide the facade of a single system, reduce friction. I think the one, the word that I really like is, figure out how your product will reduce friction. Now, it sounds very cliched, but the ones that do the best job of reducing friction, not just in terms of using the product, but in the channel. Download, you know, how easy it is to download it, how easy it is to transact with it, how easy it is to buy it, all those things are sometimes considered to be, you know, things that people will take care of later on. You do it right then. And founders have to be product managers, and I can't emphasize that enough that you can delegate product management to folks out there. So be a product CEO. Product CEO, I think you know that, because then you're paranoid, you're constantly thinking about the winds of change that are ahead of you. And I mean, look at Nutanix, every two to three years we've disrupted ourselves. Like when we signed the Dell agreement, we said we'll disrupt ourselves. When we came out to the new hyperbiter, we said we'll disrupt ourselves. So I think that paranoia is more healthy and more natural. So the new coin term we'll have on theCUBE here is be an agile venture. Be iterative, iterate always. It's a DevOps mindset. Okay, I got to ask you a question I'm asking everybody this week. What is hybrid cloud? Does it exist? Is it an outcome? Is it a product, is it a category? I mean, it's obviously public, private, we see that. On-premise has been around for IT and computing started. But now private cloud and public cloud. What is hybrid? Does it exist? Is it elusive? What's your take on this? Well, I mean, if you take a step back and look at automobiles, I'm sure you rent cars all the time. You take Uber all the time. You own a car as well, right? I'm lucky, yeah. And sometimes you lease one if you have to kind of just recycle them every two years or something, right? So there's a whole continuum of consumption. Starts with a one hour Uber to probably a one day Hertz to probably a two year lease to finally owning cars as well. And it all depends on your footprint. If you have a large family, you would not lease an SUV because it's too expensive. Rather buy one and keep it for a few years and so on. Same thing is true for housing. I mean, if you're a bachelor and you really want to move things every year, you would just lease an apartment in San Francisco. As your footprint grows, you need school districts and soccer playgrounds and so on. You'd actually move to Suburbia with a bigger house and you own one, right? And before that, you're going to Hawaii for three days, you will actually go to a hotel. But if you go to Hawaii for six months, you will lease an apartment. So there's a whole continuum of housing as well. Starts with a one hour. So yes or no? Yeah, so computing is going to go through its own continuum as well. And I think today people are actually looking at, wow, you can rent computing. Amazon is showing the way. But for things that actually are predictable and stable and somewhat plateaued, people are not rented. So if I hear you correctly, you're saying essentially there's a continuum of different definitions of what cloud is and computing. So hybrid cloud would be a mindset or a philosophy. It's like distributed computing. You don't buy that. You deploy it. Exactly. Now the biggest thing there is how quickly can you move things around? And that's where app mobility comes in. If you think of what DevOps is talking about containers these days, containers is solving 10% of the problem because the software that goes with an app is probably 10% of the state of the app. There's data, which is storage. There is networking, there's security. There's a ton of things that need to move around. Once we get true app mobility is when hybrid will be real. Until then, it's actually a pipe dream. Okay, so pretend you're not the CEO of Nutanis. Put your industry expertise hat on. If you were the CEO of VMware, what would you be doing right now? I think I'd be figuring out who my top 10 innovators are who are not following, whether it's Amazon or HCI or whatever else, who are leading in terms of thought leadership and are willing to actually start on an empty canvas. It's gonna go back to what's the design point of computing of the next 10 years and the design point of computing of the next 10 years probably has some to do with the last 10 years but it should really be an empty canvas and I think knowing those top 10 innovators not mouthpieces. I think one thing that's very important for large companies realize is that mouthpieces don't build anything. Evangelism, PR, that kind of thing. Talk about substantive development. Exactly. Product leadership, technology leadership. And finding the CTO who engineers, respect and so on. I think those are the kind of things and I've heard about for new development so hopefully it's all in good direction but knowing that there is somebody that engineers will look up to is probably the biggest. I mean it's great news you see Steve Herrod giving a keynote this year last year. He didn't because he moved to the dark side as a VC so you're seeing some light there. Hopefully we'll see more this week. So I've got to ask you a final question. What's your take of VMworld this year? Obviously we're just kicking off here inside the cube in Moscone North. What do you expect to see? What is this show about this year? From your perspective as the CEO of Nutanus and as an entrepreneur, what's going on around the VMworld ecosystem this week? What's the main theme? What do you expect to see? You know I was expecting more DevOps and containers and you know things like that but I still see a lot of storage, a lot of storage. Just like last year, two years ago, three years ago. I mean storage is a killer app. I mean I go back to the last three years of VMware actually coining the term SDDC and that has been hijacked by HCI. The biggest reason is because storage actually is the killer app for a lot of these things. So although I was expecting more in terms of containers and cloud, I'm seeing a lot of storage out there. Okay so are we, final, final question. I guess I go with my final, final question. Are we in a bubble? And if so, is it a big bubble? Is the enterprise softening the blow? It was obviously the consumer side, 50 billion dollars for Uber. I mean I'm a big fan of Uber, throwing up a lot of cash, Airbnb. Obviously on the consumer side we're seeing some, might see some dead unicorns as it's been kicked around in the market. No, we're seeing a unicorn bubble. Is it a bubble? What is the state of today's market? Obviously the private equity markets are hot right now, not a lot of trading. Public markets seem to be good valuations. What's your take on this whole bubble? Yeah so if you look at 99, 2000 and give it a score of let's say a thousand, let's say give it a score of 1,000. At the size of the bubble, today we are at 50 or 75 or something like that. You know I think there is a bubble but it's much smaller than what it was back in 2000 so on the relative scale. Now what is different? I think the internet is pervasive, mobile is pervasive, the cloud is pervasive so definitely people are being able to innovate much faster than back in 15 years ago in the year 2000 itself. But if you look at the enterprise, I don't see a huge bubble. I mean anybody who's a unicorn today is probably getting multiples of six to 10x of next year which is not very different than what the public market actually values company that. In the consumer space there is a bigger bubble but I think it's still not as big as what it was 15 years ago. And it's path to profitability. Yeah absolutely. And I think a lot of companies are acquisitive. I mean you could see Facebook doing 20 billion dollars worth of acquisitions. I think you'll see many more coming from Google and Apple and others as well. All right D.Roch, thanks for spending some time on theCUBE. This is Silicon Angles theCUBE. We go out to the events, extract the Silicon Noise, our show here. We got our new director set here in Moscone North, live in San Francisco. I'm John Furrier with Dave Vellante. It's theCUBE. We'll be right back with more after this short break. Thank you. Pleasure. Cool. Nice job. Thank you. Kicking off the show. Big audience. Nice. That's gonna be the house CEO. I love it.