 Live from Washington D.C., it's theCUBE. Covering AWS Public Sector Summit. Brought to you by Amazon Web Services. Welcome back everyone to AWS Public Sector here in Washington D.C., theCUBE's live coverage, two-day coverage. I'm your host Rebecca Knight, co-hosting alongside John Furrier, and we are welcoming back to theCUBE, 13-time CUBE alum, Sanjay Poon and the COO of VMware. Thank you so much for coming back on the show. It's VIP status, by the way. Yes, no, absolutely. Thank you, Rebecca. Thank you, John. Yes, we have a red carpet rolled out right here for you. Delighted to be here. I've locked track of the number of times, but when you're having fun, it's good. Exactly. So tell us a little bit about what is VMware's role here in the public sector? What are you doing here at this conference? Yeah, VMware and AWS announced a partnership in October 2016, and it really was the coming together of the best in the public cloud, with the best in the private cloud, for what we describe as the hybrid cloud opportunity. And the past two and a half years, coming up on three years pretty soon, has been incredibly exciting. We started off with some of the key industries that we felt, for us, public sector isn't among our top three industries. By financial services, telco, public sector, healthcare, manufacturing, all the key industries, technology, we're looking for ways by which they could take their applications into the cloud without having to refactor and replatform those applications. That's a big deal, because it's a waste of work. If you could lift and shift and then innovate, and that's the value we brought to the public sector. And some of our earliest customers were customers in the public sector, like MIT, schools, but also the regulated industries. In the on-premise world, we're very strong in almost every civilian, military, the legislative branch, the judicial branch, the federal agencies, all of them, use us. Millions and millions of workloads. The question really is how, as they think about modernization, can they get the best benefits of the public cloud while leveraging their VMware footprint? So some would say that modernization may not include the original VMware vision, because a lot of the governments are trying to replace antiquated old systems like cobalt mainframes or whatever. But you guys have been around and dominated the operating side of IT for a while. So you're kind of seeing the first wave of virtualization, the first wave of modernization. But to some cloud native people, they might see that as like, well, is that old school? So what is your particular perspective on that innovation dynamic? Because a lot of the public sector customers are awakening now going, oh my God, I can move fast with cloud. So cloud is bringing on a new set of disruptors in IT. You guys have already been there on the first wave of disruption. So how do you balance that kind of presence? But also there's also a disruption you might be viewed that way. Yeah, I would say actually the first wave of our foray in a modernization started with this device before cloud, okay? In 2007, when the iPhone came out, there was a significant move by big parts of the public sector to move away from BlackBerry, which was kind of what they used for the decade prior to that. And when we bought AirWatch, we began to see some of the earliest industries that were adopted in the public sector. Many of the agencies started to look at us now. So we actually began our journey into this modernization discussion in the workplace transformation part of the discussion before we got to cloud, VMware. So we were prepared for some of what that looked like. For example, Census 2020, that entire effort of all the work that's being done with mobile devices now as opposed to paper or surveys that were done maybe 10, 20, 50 years ago and all powered and secured by Workspace One. Now when it got to cloud, we were prepared for that because we knew a little bit of what that meant and mobile and cloud were some of the two top discussion items that people were talking about as modernization efforts under the banner of digital transformation. We had to begin to showcase to a customer that moving an application, we're talking client-server three-tier architectures as opposed to a cobalt mainframe. That's really where we'd have. But the bulk of the x86 architecture that's been virtualized in VMware, if you could take them now to the cloud and then use some of the services that these guys are building, whether it's database, whether it's artificial intelligence, machine learning. If you waste all your time in replatforming and re-architecting that application, it's that much less time that you have to do some of those innovative things. And the lift and shift process, once we had this sort of highway into the cloud, so to speak, which is what VMware Cloud and AWS does, became so apparently, so we're in that process, we had to then work, which we can talk about FedRAM certification, all of these things that are important. The AirWatch was really a critical acquisition. Turns out a boom for you guys with Public Sector. You guys had, the iPhone was a driver, not so much the blocking and tackling of virtualizing data centers and IT, which you had the presence in, but it was the mobility piece. Well, since 1998, 1999, since the company was founded, the Public Sector business of VMware has been very important. I mean, I would say, it's like I said, it's the top three. And so we had tremendous amount of relationships, some of our biggest deals, eight figure plus deals were done with some of the biggest, and many of our partners here. So it's a large business. Large business. Can you break that out in the numbers? We did, but we've always said it's sort of top three, and we've always talked about in our earnings call some big, large customer examples, like US Army. And then Sled, which is also sort of represented in this community here, state, local education, all the universities are using us. So the footprint of VMware on premise was well documented, well understood, lots of spend going on there. What we didn't have an access to was we had some virtual desktop spend, VDI. This mobile opportunity gave us a whole new banner of spending. But then the cloud opportunity is kind of taking this to a whole new level. And quite frankly, you know, if you look at the commercial sector, the overall IT spend in the world is about one trillion we track. And about 150 to 200 billion of that, 15 to 20% is being spent on the cloud. And the public sector, government sector starting to track that they're probably a little bit lagging in certain areas of the commercial. But that 15 to 20% is only going to get 30 or 40% in the next five years. VMware's been one of the top infrastructure companies. We're looking to now move a bigger part of the Wallachia that we gain as people move their investment into the cloud. When you are thinking about the different clients and customers that you're working with, the Sled groups, then the corporate customers, what, how different are they? And how, what's on the public sector's mind versus your corporate clients? And how do you manage the relationships differently? Yeah, we've sort of segmented them at VMware and many companies have done the same thing into three buckets. One is who we describe as the federal, public sector, customers that are civilian, military, and we mirror that in almost every country. So Teresa here, for example, runs AWS. And we have a similar type of org structure to here in each of the key regions. The second big segment is healthcare. Many of the healthcare organizations are regulated. They have similar characteristics. And the third is Sled, state local education. And those three buckets are very similar patterns to the way in which they buy. Their CIOs are similar in their, and they also have often very similar security requirements. So the highest may be something like a Fed and Fed ramp and may have some specialized needs that they have for certifications on the device or certifications of the cloud. We have to comply with all of those. But then as you get to the ones that are in the state local, maybe they don't have as many and higher certifications, but what it's helped us is to basically work with partners that are very similar across this and the proposition under digital transformation is really modernization of either the data center and their applications or modernization of the device. And VMware is very uniquely provisioned to help on both those fronts. And security is really top of mind. I mean, we heard this on the main stage and we know how big a threat these cyber threats face. These cyber threats pose. Absolutely, and if you think about aspects of security, security has multiple aspects of where you can think of them as control points. The network, the endpoint, cloud, identity, and lots of event management that's collected. These are the five big markets of security. In each of those areas, VMware started to play in more and more. For example, network, you know, five, six years ago, people didn't think of VMware in that area, but now with NSX our leading software to find networking area, we become the leader in that segment and about half of our use cases are security related for use case called micro segmentation. So the government can basically segment out a set of their apps and through software, think of these as just on or switches, almost like light switches, only allow certain apps to access certain parts of the data center. That's very easily done through NSX. Workspace one, the endpoint now can be extremely secure and provide all the level of security that Blackbird provided in their proprietary devices, but now at any device. So we've been systematically looking at each of these areas. I would estimate about 15 to 20% of VMware's revenue is security related use cases. And the public sector, this is a very, very key place where we get grilled on and we have to sort of satisfy their level of requirements for security. Sanjay, what are you doing here? I know you're speaking at a panel, fireside chat, what's your agenda of the week? What's the story? What are the key talking points for VMware? VMware is one of the top sponsors here. I don't know whatever it is, global or platinum one of the highest level is you'll see our names there. And largely what we did when we announced this partnership as you know, Andy and I were classmates at school, we wanted to build a very close partnership with all their big events. So you'll see us at all the major summits. VMware is a top sponsor. And you'll see them also at- Going out on the relationship. Yeah, we're doubling down. And they are doing the same at VMware. So we said, listen, and I think I talked about this in one of your previous shows. If you could mingle, VMware has, you know, collectively about 100,000 people that come to all the VMware events across the world. And maybe about a half a million to people who watch those events online. Amazon has probably twice that number. But if we could mingle each other's audiences because they're coming off into both shows and be the best showing up at AWS summits and we'll give them lots of access to VMware. Ops, there you go, development, operation. Hey, it's going to ring to it. I like it. That's exactly the vision. So we first saw VMware as a big presence and the acquisitions we've done also like cloud health also had big presence. So that's one. Number two, we try as often as possible to have either a keynote or some kind of problems. And I've had a good friendship with Teresa. She invited me to speak. I think there's an event with their top 500 customers, sort of a keynote inside that. And I do that a little later this afternoon. And it's also a tremendous opportunity. I think they have 13 or 15,000 attendees here to meet some of our top customers. So those are the three things I'm doing over the course of the next day and a half. The CIA deal 2013, what that has done, a little gestation period since then, a lot of other folks within the DC circuit here, public sector, government agencies are all going, hmm, Amazon's got the right format. So Teresa put the formula together. People are adopting it. You guys did a strategic deal with AWS, which you're doubly down on. As a student of the game, if you will in tech, Sanjay, who you are, knowing what you know now at VMware, what's your perspective on this? Because you got a big tailwind with cloud. You got clarity in what you guys do, what AWS does. You also have multi-cloud with other clouds. I mean, you got NSX with a nice product. You got multi-cloud built-in hybrid. I mean, pretty good spot for VMware, for public sector. Yeah, I have two parts to your question. First off, tremendous respect for Andy. I was describing before I got on the show with both of you, when we were in school, I wouldn't have put him in 1987. We graduated as the person who would have been the pipe-piper of this public cloud IaaS revolution. But kudos to him, Teresa is a fantastic executive. And I think that, you know, 2013, CI Adele put them in an incredible pace to be a front-runner in this, and many other deals they've done similarly. VMware, as we saw over the last, you know, sort of three, four, five years, a significant rise of Amazon in our counts, the customers were asking us, why can't we get the best of both worlds? Why does it have to be on-premise runs in VMware and public cloud? And then I've got a port and refactor and replatform my applications. So our customers drove us together, and what we've sought to do in our relationship with Amazon is we meet on a quarterly basis, we review feature and function, product roadmap, we're aggressive, with our sales teams are trying to pursue opportunities together. And that's really helped us, you know, and that's part of the reason I'm here. So the more that we can do together to satisfy customers, customers like seeing big partners come together. Even it feels a little bit like a Berlin Wall moment, right? You remember 1987, you had the U.S. and Soviet Union and people were surprised by that. I think that the general consensus was complete surprise in 2016 when we announced the partner with Amazon. But with every move we've made, like for instance, recently we announced the FedRAMP status, one of our biggest eight figure deals we had announced in our Q4 was with a major customer that's in this segment actually, our public sector sled. And the more that we can do this, I think there's a lot of future ahead of us. Berlin Wall is interesting, you know, tear down that wall, that was a moment, it came down. In the government, the theme that we're hearing over and over again is red tape. Lag with data, it hurts application workload, so fast data, make it available, cut the red tape out of procurement. I mean, basically 1980s, 1990 procurement rules don't apply to how people consume and deploy technology today. So, you know, tear down that red tape. I think you got that right. I think the government's mandate to go cloud first in the last several administrations was absolutely key. And certain elementary workloads like websites, I mean, if it's a public website that's holding public information, I mean, of course you've got to worry about security, but the data's public anyway, okay? So, what's going to get hacked? I mean, why don't you move all websites that are web content there? So, some of those early workloads that moved there were very easy. I would call it sort of the 101 of hosting. Why would you want to have a server just to host a website? But once that's done, the more mission-critical applications, Windows workloads, Oracle SQL Server databases, virtual desktops, now you're starting to see, and I think eventually some of the more mission-critical apps like SAP or Oracle apps, I think you're seeing them also now with a lot of customers in both public sector and commercial interest movement. The military DOD, tactical edges, military, lives are on the line, it's not a video game. Lag actually will kill people. So, you want to have that application peaked. Exactly. It's the right architecture. One of the things that's so inspiring about being here at the Public Sector Summit is that we're seeing all these use cases of using the cloud for good to solve pressing environmental challenges, health challenges, social challenges. What are you seeing? What is VMware working on that is particularly inspiring to you? I'm glad you asked that, Rebecca. I would say that's one of the things and Amazon shares the similar value. Where we think that technology companies have to think beyond themselves and be a force for good. I think one of the first times at any major conference last year we had the Nobel Peace Prize winner who's changed the world, Malala come and speak. And I think everyone who comes to major tech conference and we have one of the biggest conferences was, I mean, we had grown big men six foot tall crying at the end of that. And we had a number of customers that we love to be able to talk about their stories. Make-A-Wish is an example of an organization that if someone's with a terminal disease and they want to have some wish that they could wish for, all of the infrastructure runs in VMware and if we can help them serve that audience better. We have a number of charitable organizations. Red Cross was at our VMware. So we, a big part of Pat and mine and the entire company's kind of charter in our epic values is being people of integrity, people of work with the customers and the community. Our values, epic stands for execution, passion, integrity, customer and community. And that last year is I think very important because we live in a world and the more important thing is not necessarily how much money you make but what a force you can be for changing people's life. That lasts forever. You can't take your money into the grave but the more that you can have an impact on people's lives. I mean, John, I'm delighted to see your daughter here. I mean, that generation continues. And you're passing on those values onto the next generation or helping people. That's the bigger story of life and that gets us equally excited as also innovation. Communities now can be instrumented via digital technology. So you're faster time to find truth. People in communities were very active. The data's there. It's all in the data. And so you can see the impact. No, I think that's absolutely key. So Rebecca and John, I would agree with you. And I think you, as you talk to companies that's an important question to ask them because we're all in this together. There is no whether it's competitors of ours or not that we can all serve the greater community here for good and make this world a better place. You know, there's a lot of what we do that helps the world run better. That's good. Infrastructure helps to run better. But helping the world be a better place, it takes both individual and collective will. Well, one of the talent gaps is not just computer programming and tech people. It's architects for the new society that needs help on these key policy questions like governance and responsibility. You're seeing YouTube and Facebook and our neck of the woods responsible for all this impact. And they don't really kind of, there's no oversight. Listen, I'm not going to get into the public debate about privacy and governance and so on. I will say there's one thing that, we're also really, really excited to kind of give back to the community in terms of education. One of the things that's very powerful to VMware is our user groups. We call them VMUGs, VMware user groups. And there's collectively about 150 or 200,000 of them. And it's amazing when you spend time with them. They are really, really, they're members of the community because they're customers and partners. And they dedicate their time to educating others. And the more that we could use online forums. I love the way in which you're using your online platform with AI and other techniques. I think artificial intelligence becomes the grand equalizer. By which we give access to everybody. Access to the voices, access to the data. But right now, as you pointed out, we need a society that's going to have a shared values. And I think that's where the good is coming from. It's easy to get on the bad tech bandwagon, whichever one's on right now. But there are examples of tech for good. You mentioned that. When you say shared values, is that possible? Well, I think there's an awakening going on now from Silicon Valley where I live. And here in DC, which it's in my face here because people aren't as tech savvy here as they are and say in Silicon Valley, no offense, but most people aren't as tech savvy here as they are in Silicon Valley. They don't go deep on the impact of tech, but they see the results of bad tech. So I don't see a lot of evangelizing going on outside of certain areas around tech for good. So I think there's a lot of great examples. Human trafficking, you're seeing tech for hiring, new generation, onboarding, training, skills gaps, so efficiencies in healthcare. There's so many areas that tech could be used for good. And if people are educated on focusing on that, not the bad, I mean, bad's got to be eradicated certainly and not the poor bad things, but I think there's a lot more good, there's a good pile as much bigger than the bad pile in tech. So when I say shared values, the recognition of that, which is let's get on the same page. There's bad and there's good. Have that debate, then apply the tech. Interesting, galvanizing, it's a galvanizing force. It's just like any invention, whether it's the printing press or even the use of fire. I mean, there's good use of it, there's bad uses of it. And we've got to find ways by which technology, even while there's debates going on as to some of these social media platforms, my fundamental belief is technology is going to transform society. The reason I came to the United States as an immigrant was to study computer science. And I felt like the United States had, and I came to this college I'd never heard of called Dartmouth College in Hanover, New Hampshire, was very fortunate to have a scholarship to go there. But it's because I wanted to study computer science. And I felt like computer science could change a lot of the way in which, at that time I was just trying to program and learn how to create algorithms. But if you look at what's transformed every aspect whether it's the mobile device, which is really a computer in your pocket, or cloud computing, which is kind of bringing the super computer into the cloud. I think it was tremendous. Yeah, I think it's tremendous what we can do. And we have to constantly find ways by which artificial intelligence and these forces of, you know, the next parts of general mobile cloud computing can be used for greater good. Didn't you go to scholarship on full boat with basketball? Man, we got the Warriors with two more games. So you're a big Warriors fan. If you folks that don't know Sanjay, we always talk about every time Warriors looking good to stay alive, but not looking good. So sad to see. I mean, it's sort of the last game I was watching it last night. It was, it was sad. It was, of course, it was a win, but also a loss. To see KD go down that way was just absolutely tearful. But you know, win one more game. Too hard. It's going to be hard to, you know, kind of beat the crowd. And the crowd's really loud and oracle, get one more game. And yeah, I think if they get to game seven, we'll see what happens. But it's just great to see that hard. I'm from Boston. So I, I'm kind of overgolden state, but I'm sure everyone's over Boston and there are Red Sox and our ruins and our. Duck tour has only been 13 months. I know, exactly. Exactly. We're still. There wouldn't be a Celtics Warriors game. So, I mean, it could have been, that would have been, that would have been so good. Like the Lakers in Celtics, they had a parade. It was more recent than that. It was the Pats victory. Okay, Patrick. Yeah. Anyway, just saying. Sanjay, thank you so much for coming back on the queue. We look forward to your 14th visit on the show. Thank you, Rebecca. Thank you, John. I'm Rebecca Knight for John Fourier. Stay tuned for more of AWS Public Sector Summit here in Washington, DC.