 This is theCUBE, live from the Musconi Center in San Francisco. This is SiliconANGLE's continuous coverage of VMworld 2010, now inside theCUBE. We're back at theCUBE, siliconangle.com's continuous coverage of VMworld live 2010 in San Francisco, California at the Musconi South VMworld 2010 is rocking. We're on the third day, really the second day of big announcements and I'm always excited because we've done three CUBE events, kind of a new product for us but we've had some consistent guests, Pat Gelsinger from EMC, Rich DePalatano who's joining us right now, president of Unified Storage at EMC. He's a regular now so we're expecting to have you back. Great to have you back, every time we do the CUBE. A lot of people watch, we have over 140,000 in the last two and a half days. Good audience, you're a good draw so we need you to come back in. You guys are super. So tell us, just give us a vibe from your perspective, EMC's been doing a lot of things. I was with customers here, you're showing us some technology, I was with the relationship with VM where everyone knows about. But just give some color to the show here in San Francisco and we're on the scene, cloud revolution's going mainstream, we're covering it wall to wall here at Siliconangle so give us your angle on that. No, great and great to be here with you guys today and first of all I'm looking out here at a beautiful 60 degree day in San Francisco and it's not a cloud in the sky. But here at VMworld, it's a really exciting time, technology, customers, 17,000 I think it was? Total? Huge numbers. Huge numbers, fantastic momentum on this transition to the virtualized world, to enabling the cloud, just use enthusiasm for this. And it's pretty clear that we're still in the very early days of this massive technology transition. And there's tons of technology on the floor, a lot of enthusiasm around it but at the end of the day what we see here is I think fundamental shift in our business models and our technology to enable this next wave of data center and it's really all about taking out cost and complexity and enabling flexibility in the IT infrastructure. Unified storage, give us a definition of that because Unified has been kicked around, it's kind of a punchline, Unified communications, Unified storage but it's, Convergence had that same effect now it's real but it kind of has that trajectory of hype build up. Talk about the reality of Unified storage in context of the cloud real quick. So one of the byproducts of cloud and virtualization is that you're bringing many, many different applications together on a common infrastructure. So really I think it's all about what the applications are doing. So as you bring these many different types of applications onto a common infrastructure, frankly either physical or virtual, but more and more 40, 50% of server deployments now, I think we saw some data yesterday that half of the server deployments, more than half of the server deployments now are virtualized which is a major tipping point. But as you consolidate these applications, what you find is that these applications are going to use storage in many different ways. Historically, a database would be a block oriented infrastructure. So you have the emergence of sands and other block oriented infrastructure. Then you had the growth of more and more unstructured file oriented data and you saw explosive, a continued explosive growth on the file side. And now you see the emergence of really more programmatic interface, restful and soap oriented application interfaces. And so these trends I think are really with the consolidation of the apps driving to a storage infrastructure that needs to be more diverse and flexible in how it provides service to these applications. So to me unified means unification, right? Look up in the dictionary, right? And so you're bringing unifying these different access methods together on a common infrastructure to really enable the applications. You know, I want to talk a little bit about the transformation of your organization, right? It's pretty diverse, probably the most diverse within EMC, I think that's fair to say, right? A lot of different technologies of file, blog, different software technologies. It's not something that you've undertaken overnight. Can you talk a little bit about your portfolio, how you're bringing that together and what some of the drivers are? So you have to have a vision and a strategy and a vision and a strategy starts from some insight on where things are going, right? And we talked about virtualization and these applications coming together. And so once you have a vision and a strategy, I think you really need to organize around it. And so what we've been doing the last couple of years is really bringing these groups that have historically been very product oriented more into a functional structure. So we announced the last couple of days and you can see it on the floor here. Unisphere, which is our common management, element manager, we call it, for the mid-range products. And so we had a strategy, we had a vision that we had too many different ways of managing our infrastructure and we needed to bring them together. So that was our strategy and now we've organized that way. So we've actually taken the management groups that were in these separate product lines and brought them together. When you think about our block, our Clarion product offering and our Solara, our file offering, we've actually brought those groups together as well. And so you see us bringing these disparate technologies together, both from a strategic, from a code base, and now from a people perspective. And that allows us to really drive a common vision and strategy forward and have the strategy aligned to the organization so that we can execute and even see it's all about execution and building great products. Yeah, what is the impetus behind that? Can you give us some insight there? Is it customer demand? Is it response to the success, for instance, of NetApp? Is it the technology is now coming together, talk a little bit about that. It's probably all those things, David. I mean, I think one of our biggest challenges, I think, is technology people is that we're so focused on the technology and the features that we need to kind of bridge that gap. We need to be sure that our R&D investments are creating business value. You hear that a lot. We have, I have thousands and thousands of engineers in my organization. We can build a lot of technology. We can probably build more technology than people could possibly consume. And so our challenge is, how do we build the right technology that creates business value and deliver it to them in a way that can actually consume it? And so we really need to think more strategically about the business problems and to really align our strategy and organizations that go do that. So let's talk a little bit about virtualization. ESG just released a study. I don't know if you saw it. They shared some of the data with us around shares in virtualization. I was surprised. I had figured, okay, you're number one in the mid-range, however you define that, whatever IDC price bands you use. I had assumed, okay, virtualization opens it up. It opens the playing field up. I was surprised to see that you guys were number one in virtualization. Now, I don't know if the shares were the same or large or small, but they were comparable. Talk about that a little bit. I mean, why are you number one in virtualization from a market share standpoint? So it's multiple things. Joe Tutuchi, the CEO of the company, is very, very focused. Obviously, he's chairman of both companies, and enabling this next generation data center, cloud infrastructure, is fundamental to the corporate strategy. And so we drive very, very aggressively to support and actually accelerate the adoption of those technologies. So we announced here in the last couple of days and demonstrated on the floor some 67, 68 integration points with VMware. It's ridiculous. It's great. And we really want it to be seamless. So we want that experience to be seamless. The other thing is that that's very, very important from a technology perspective is to understand that historically, storage substances in people have been very focused on SANS or SIFs or NFS, but in the virtualized world, the control functions that we call the data path versus the control functions are more and more important. And so we have significant investments and significant focus in really enabling the services that VMware provides with and using our products. Yeah, I'd like to give you my opinion on this if I may. So when we started this business, IBM was number one, right? They dominate everything. They were the low-risk bet. I think EMC today in storage is the low-risk bet, but there's more than that. You guys do a great job of these, what you call proven solutions. And that takes a lot of risk away from the customers. The other difference, I think, is that unlike the industry when IBM was there, it's way more competitive today and you guys are insanely competitive. So do you buy that premise? No, I think you're onto something really big there. I mean, the idea that people want to buy integrated solutions is why we partnered with VMware and Cisco around the VCE Alliance. It's why we've created this joint venture to really enable a single face to the customer, the Acadia investment with Cisco and EMC to really create an integrated solution that people want to buy. I was just at lunch, sat down at a random table with some customers and the amount of interest in VCE and our VBlock technology is... And so people want to buy that way. You know, there's just, again, so much complexity that by integrating our technology and solutions, which is why it's so important for us to have this control path, this native integrations into VMware to make ourselves more and more application-oriented in how we build and deliver products to the market. Rich, a lot of the conversation we've had with other experts has been about cloud forward, right? So everyone's buying clouds here. It's about going forward. What's going to innovate going forward? You mentioned you can look at a lot of different technologies but you have to figure out what to build. It's got an integrated, makes total sense I buy that. Question for you is, obviously M&A's been a huge activity with seeing all that stuff going on, new approaches, startups are coming out. So R&D has been a big point. So you run that organization. You get the captain at the wheel. What are you, how do you looking at that R&D? Because you have to be selective in how you're doing your R&D. You've got acquisition strategies. What's your angle on that in your opinion and just kind of, just a vision there, opinion. Yeah, I mean, there's multiple things there. I mean, any big engineering organization actually can never do all the things they want to do. I mean, it's kind of a dichotomy, right? So you have to have a set of priorities, right? And so what are our priorities? I mean, first and foremost, first, second, third priority is quality. I mean, just how the world we live in. Our stuff is expected to work at scale. You know, if you're going to work in the cloud, it has to work at scale. It has to have five nines of more availability, serviceables to be supportable, et cetera. That's the first, second and third priority and we're known for that and that's a key part of our proposition. But in parallel to that, you need to simplify, you need to get more application oriented. And so those priorities trickle down into the organization and so you have kind of the core priorities. And then outside of the core priorities, you want to really bet in a few strategic areas, both organically and inorganically. And so you want to have your core strategy and you want to have some adjacencies because you never predict a future precisely and you want to push the envelope on innovation and keep a kind of healthy balance of kind of routine development, keep your quality up, build the next product, but create some groundbreaking capabilities. We just announced FastCache, which is a phenomenal capability. The only mid-range system, frankly the only system in the world to have this capability is Clarion. And I got some email just the other day, yesterday from a rep, one of our big telco customers, came back and said they're seeing 4x the transactions per second in their billing system from a software upgrade to their existing Clarion. That's groundbreaking revolutionary stuff. And then you got to think about inorganic stuff as well. So the world spins in any different direction. You don't know what's going to happen. Exactly, so have a core strategy, look for adjacencies, break some glass, do some things differently organically as well as inorganically. Dave, what are you seeing in the Wikibon community from customers? You got 10,000 practitioners in your organization on the Wiki. 15,000. 15,000 in your organization, I mean customers are chiming in, kind of a back channel. We're growing, we're growing. So what are they saying? I mean they agreeing with the unified message. There's a huge simplicity theme, there's no doubt about it. Simplicity and efficiency are big, big overriding themes. But I have to say the other thing we're seeing is there are a certain set of customers and there are a lot of them that don't want to sacrifice their mission critical operations for the potential of unification. So they, a lot of customers, I don't know if you see this Rich, are fencing off their block from their file and they're happy with that, at least for now. They create a nest here and they're saying, hey you know what, it works fine. We're creating business value in other ways. There's another segment of customers that's really just driven by cost cutting and efficiency and those are the guys that are really clamoring for unification. How do you see it? I think you see both camps. I think you see, when you look at virtualization, the idea that, if you think about VMDKs and virtualization, those are all file oriented semantics. So you see performance oriented, low latency things around the block and then you see more and more unstructured data whether it be VMDKs or user data around the file and so we see these infrastructures coming together really in both ways. And there's no question that the file is, whose ever numbers you look at, dramatically outgrowing the block and so you've got to address that, right? So Guy just kind of changed gears a little bit because we got rich on, had some fun. So at EMC World, he gave some advice for people. So there was a nice clip and actually got a lot of traffic so the entrepreneurs out there. So today, what, putting on the hat of experience, been there, done that, you run a big organization, huge entrepreneurial activity going on and this is more of a VMware kind of story. I mean, they're saying one dollar of license is $15 of ecosystem revenue, especially the Microsoft model. I mean, it's going to be a gravy train of innovation and money making, you know, it's getting public. A lot of entrepreneurs out there, spinning up apps, Apple's got the big announcement. What advice do you say now to add to that? How to approach their business, how to get funding? You just, just advice, tell them. That's an hour, at least a conversation. So I would say that it's a Chinese curse, but you know, we live in interesting times, right? And, but I think in these interesting times, there's so much change in consumption models of technology around, you know, enablements of things, you know, whether it be solid state, flash, or, or Intel's processors, or the speed of networks and, you know, so many new entrants in the marketplace. It's a very, very rich time. So I'd say my first point of advice is be bold, right, be bold because it's really not clear what the outcome's going to be. I would also say that, you know, if you're a growing entrepreneur, you know, know what you're good at, right? I see a lot of my friends who want to start companies, they have kind of lots of ideas, but there's no unique insight because they're actually not expert enough to really have a unique insight. So I would say play to your strengths, not your weaknesses, right? If you're an expert in a particular technology, whether it be, you know, internet, or service providers, or chips, or operating system software, or applications, play to your strength and look for a unique, a unique idea where you have a unique insight that's really kind of beyond the horizon and don't be afraid to go after it because what do you have to lose? Awesome. I saw I had one last question for you. You run a big organization that's growing at the epicenter of technology. If three par is worth two billion, what's your organization worth? Well, multiple revenue, a very, very big number. A very, very big number. No comment there? I can't comment. You don't unbundle the earnings of revenues that way. We use startups out there, Rich DePolitanos, great advice there, EMC. He's going to be buying companies and doing that. I didn't say that. I didn't say that. That's our prediction. Our prediction. Be bold and create new opportunities so that EMC's and the big guys can buy you, I guess is my advice. Do something interesting. They're always looking. Little white space. EMC, the leader, number one in storage virtualization, and just kick and butt, pulling the unified story together, VMware enabling all that through their relationship. So we're excited to have you. We're here at SiliconANGLE theCUBE, coverage exclusively live from San Francisco, California at VMworld 2010. We'll be right back. Thanks for joining us. Great, thank you. Take care.