 Live from Las Vegas, it's theCUBE, covering Dell Technologies World 2018. Brought to you by Dell EMC and its ecosystem partners. Welcome to Las Vegas, everybody. You're watching theCUBE, the leader in live tech coverage. My name is Dave Vellante and I'm here with Stu Miniman and this is the inaugural Dell Technologies World and Pat Gelsinger is here. Hey, great to be with you. This is CEO of VMware, awesome to see you, our number one guest of all time. This is our ninth Dell slash EMC world and your 900th theCUBE interview, but it never gets old, Pat. It's really a pleasure to see you. It's always fun to be with you guys. Thank you for the chance to spend some time on theCUBE and you've come a long way. So thank you for noticing. So you were the first and people are recognizing this to really sort of call the boom in the data center. We certainly have seen it with cloud and we saw a little bit with data and big data and now digital transformation, but well over a year ago, you said we have tailwinds. It just feels right, so good call. Yeah, hey, thank you. And clearly like the IDCs, Gartners, as they began last year, 2% to 3% growth, I said no. I think it's at least two X that and we ended the year almost 6% growth in IT and everybody's raised their forecast and I think they're still a little bit conservative and I think in this period where technology is becoming more pervasive in everything. Every business is becoming a tech business. Every area of every business is becoming influenced by tech and as a result, hey, I think we're going to see a long run of tech strength and every company and tech is going to benefit and those that are well positioned are going to benefit in a big way. Yeah, you call the tech is breaking out of tech. Yeah, yep, absolutely. We're no longer that little IT thing stuck in the back corner making sure your mail runs. It's now everything. Back office has become front office. Every aspect of data becomes mission critical for the business as some have called it. Data is the new oil in the future and it really is thrilling to see some of our customers and Michael had a few on stage this morning doing really pretty cool things. Well, VMware is on fire. I mean, it's only 10% of Dell's revenue but it generates half of its operating cash flow. Obviously, we love the software business, of course. Talk about your business. The core is doing really well. You got NSX cranking, vSAN cranking, the cloud now, there's clarity in cloud. Give us the overview of your business and give us the update. Sure, and as I say, there's three reasons we're doing well. One is our strategy is resonating with customers and when you got strategic resonance with customers, you're not in the purchasing department, you're in the business units, the CIO's office. So strategy is resonating well across what we do for private cloud, what we're doing for public cloud, what we're doing for end user and workforce transformation or security strategy, every aspect is resonating. You know, second, we're executing well. And I'll say, you know, you're good strategy, you're executing it well and clearly the Dell momentum has helped us. We're ahead of schedules on the synergies that we've laid out and that's been a powerful accelerant. It was like, we're doing well. You know, and you put some turbochargers on, whoa, you know, this is gone. And then finally, as we said, it's a good market, right? And well-positioned tech companies are benefiting from that. So across our product families, you know, NSX, VSAN and HCI, you know, our cloud management is really performing, the end user computing, you know, all of these seeing, you know, 30, 50, 100% growth rates, you know, my overall cloud business, you know, VMware is growing in the teens, you know, my cloud business is growing in the 30s and way ahead of the growth rate of the business. So pretty much everything that we've laid out is firing on all cylinders. Pat, I think most people understand some of the products of VMware. You know, I think it's, you know, 20 years now since server virtualization laws, you know, great momentum with NSX, with VSAN. Wonder if you could talk a little bit about the digital platform though. You know, how does VMware look, you know, for the next five to 10 years, fit into the vision 2030 like Michael was talking about? Yeah, yeah. You know, very much, you know, as I say, we, you know, our objective is to be the essential, ubiquitous digital infrastructure, right? Where, you know, this idea, you know, essential. Boy, you know, we run this mission critical stuff and increasingly we're seeing businesses put their crown jewels running on VMware. You know, because we ran a lot of the stuff in the past, we'd run your SharePoints, your Outlooks, and so on. But now they're putting core banking on us, you know, core transactional platform. They just say you are essential, ubiquitous. You know, our strategy is to move all the way to the edge and the IoT use cases into the core networks of our service provider partners. You know, so as I say, you know, build these four clouds, the private cloud, the public cloud, the TOCO cloud, and the NF, or the IoT cloud, all of those on a common infrastructure that enables applications to build on and leverage all of the above. So, you know, we're increasingly ubiquitous, digital infrastructure, meaning that they can build their applications from the past as well as in the future on us. And as we're partnering with Pivotal, with our PKS strategy, reaching more to the developer, right, and delivering that infrastructure for the next generation apps. And of course, the dirty secret is, is that almost all of the cool new apps are some ugly combination of new and old. And if we can give a common operational security management and automation environment that transcends their cool new container and function as a service, but combine it in a consistent operational and security environment with today's infrastructure, oh, that's like the big easy button for IT. Got it, we can take you to the future without giving up the past. We hear from our, you know, CXOs and our community and our audience, they really, they want to get digital right. So my question to you is, what kind of conversations are you having with executives around getting digital right? Yeah, and lots of those things are, you know, like just with a big media company, it was with a huge bank on the phone with a big consumer goods product last week. You know, these interactions occurring, you know, like you say, they want to get it right. You know, and with it, we're seeing the conversation shift because a lot of it used to be, you know, best of breed. Oh, that, that looks good. And I'll stitch it together with this and maybe I'll put it that. And a lot of their bandwidth was being put to putting the pieces together. And we're saying no, right? What you want to do is have robust infrastructure, increasingly rely on fewer more strategic vendors. It's my job to put it together so you can take your investments and put them into the applications and services that really differentiate your business. And this is becoming a sea change in how we work with customers and say, okay, yeah, I can't stitch all these pieces together. I can't have 100 security vendors. I must rely on fewer vendors in much more strategic ways. And then that, obviously we're, you know, benefiting from that enormously and they're expecting us to step up like never before to be a partner with them. And it really is a thrilling time for us. So that simplifies all the complexity on there and at least in concept, who's leading this charge? Do you discern any patterns of the guys that are getting it right versus the guys that are maybe struggling or maybe complacent, just specifically in terms of leadership? Yeah, and it's super, super interesting because I find leaders in every industry, right? You know, you find leaders and laggards and those, you know, I had one customer a lot longer go say, hey, is that virtualization stuff? Can I really rely on it? It's really ding dong right now. You know, you're now the trailing edge of technology. But for every one of those trailers we're seeing those front end customers and you saw some of them on stage this morning where they're just really going and saying, boy, we are now ready to ante in in a big way. We're seeing that in car companies. We're seeing that in financial services companies. We're seeing that in supply chain companies. And some of those are now really seeing these startups now putting pressure on their business for the first time. And they say, no, we got to innovate in a very aggressive way. And for that, you know, the Dell Technologies family, you know, all of us coming together, you know, with our each skills and focus areas, but together being able to present that holistic solution that says, that's right, we can lead you on digital transformation. We can change your infrastructure. We can build in security. We can transform your workplace. We can take you to the multi-cloud future. We got it. Yeah, Pat, there was one of the things that caught my ear. Allison do when she was talking about the Dell Technology Institute said that together you're going to become a force for good. I know that's something that's near and dear to your heart. Yeah. Maybe you talk about the tech and the security and everything. You talk about the Dell families as a force for good out there. Yeah, and I've described this era and I've said there's four superpowers, you know, technology superpowers that are bigger than any of us, right? And the four I describe, you know, mobile, right? The ability to reach anyone over half the planet is now connected. Cloud, the ability to scale as never before. AI, the ability to bring intelligence to everything. And IoT, the ability to bridge to the physical world everywhere. And those four are really reinforcing each other, right? They're accelerating each other. As Michael said, you know, today, the fastest day of your life. Today, the slowest day of the rest of your life for tech evolution. And we see them just causing and accelerating each to go. As I, you know, mentioned in my talk this week at the Grow Awards in Silicon Valley, you know, in 1986, I was making the 486 a great AI champ, right? It's like, what, 31 years ago? And now it's a success because the superpowers are coming together. The compute is now big enough. The data is now volume is left that we can do things never possible before. But with that, technology is neutral. The Gutenberg printing press did the Bible, you know, Luther's Bible. It also prints Playboy. It sort of doesn't care. Technology is neutral. And it's our job as a tech industry to shape technology for good. You know, that's our obligation. And increasingly, we need to be involved in and shaping legislations, policies, laws to enable tech to be that force for good. Pat, you mentioned kind of the speed of change in the industry. You're a public company with, you know, a lot of employees. How does internally, how do you keep up with the pace of change, keep inspiring people, get them working on the next thing? You know, Michael talked about going private was one of the things that would help him restructure and get ready for that. So maybe discuss that dynamic. You know, and for us, you know, as a software company living in Silicon Valley, we feel it every day, right? I'll tell you, you know, we see these startups, you know, that are hovering around our people and our buildings and they got ideas, you know, so we're synthesizing those ideas. We have our own research effort, our advanced product efforts. We're engaging, you know, in thousands of customer interactions per day. And ultimately, it's my job to create a culture that enables my 8,000 software engineers to go for it every single day, right? You know, they are just, you know, they love what we do as a company. They love who we are as a company, our values. And then find ways that we enable our teams to what I say, innovate to everything, not just an R or D, but how we sell our products, how we support our customers, you know, how we enable these new use cases. We have to innovate to everything if we're going to keep pace with this industry. And to some degree, you know, I think it's almost in the water in Silicon Valley, right? You know, you got some, you know, crazy master student coming out of Stanford and he thinks he's going to start up a company to displace me. It's like, what are you talking about? All right, you know, but we feel that every day. And as we bring those people into our environment, creating that culture that allows everybody to innovate to everything. So it's hard to argue that things aren't getting faster, that speed. But speed is an interesting question. When you think about blockchains and AI and natural language processing, just digital in general, there's a lot of complexity in terms of adopting those things. So speed versus adoption. What do you, what do you see in terms of adoption? Yeah, you know, in a lot of these things, like, you know, you look at a technology like NSX, cool breakthrough. You know, we're five years old now, almost on NSX, since we did the NICERA acquisition as a starting point, four and a half years on NSX. And some of these things need to be sedimented as I describe it into the infrastructure, hardened, you know, when you've really proven all of the edge cases, you know, those things don't move every day. Right, right, fossilized, furrier word. Yeah, and you know, there is, you know, similarly with vSAN, boy, these edge use cases, data recovery, pounding on the, right, you know, the periphery, failure cases, disk drives, you know, failure modes and flash drives. Some of those things need to be sedimented, but as you think about those layers, always it's, you know, how do you sediment? How do you standardize? And then expose them as APIs and services to the next layer. And every layer as you go up the stack gets faster and faster, right? So as somebody would consume the software defined data center, they need to be able to do that pretty fast. You know, how can I make, you know, VM, we just released 6.7, you know, which reduced by an order of magnitude the time to launch a VM, you know, increase the, by 20 acts, the amount of vCenter bandwidth, just so I can go faster. Not that I needed to go faster for VMs. I needed to go faster that I could put containers in VMs and they need much higher speed of operation. So to me, it's this constant standardization, sedimenting, integrating, and then building more and more agile surfaces as you go higher in the stack that allows people to build applications where literally they're pushing updates, right? And seeing their CI-CD pipeline allow new code releases every day. I'm not changing NSX every day, but I am changing my container environment for that new app literally every day and the whole stack needs to support that. Cloud partnerships. We talked last year at VMworld about the clarity that the AWS deal brought. Of course you have an arrangement with IBM, you're doing stuff with Kubernetes. So just talk about your posture with the big cloud players. How that has affected your business and where you see it going. Yeah, clearly the cloud strategy, the AWS partnership, as I said, more than anything else. When we announced that, people moved their views of VMware. Oh, I get it. VMware isn't part of my private cloud or part of my past. They're the bridge to the future. And that has been sort of a game-changing perspective where we can truly enable this hybrid cloud experience where I can take you and take your existing data centers. I can move them into a range of public cloud partners, AWS, IBM, and be able to operate seamlessly in a truly hybrid way. Oh, your data center's getting a little hot. Let's move a few workloads out. Oh, it's getting a little bit cool. Let's move some workloads back. We can truly do that now in a seamless, hybrid, multi-cloud way. And customers, as they see that, it's not only the most cost efficient, right? It also allows them to deal with unique business requirements, geo requirements that they might have. Oh, in Europe, I have to be on a GDPR cloud in Germany. Okay, we support them right here. Here's our portfolio. Other cases, it's like, oh, I really want to do take advantage of those proprietary services that some of the cloud vendors are doing. Maybe in fact, that new AI services, something that I could differentiate my business on. But the bulk of my workload, I want to have it on this hybrid platform that truly does give them more freedom and choice over time while still meeting unique compliance, legal security issues as they've come to know and love from VMware over time. So to clarify, are you seeing it as use case specific or is it people wanting to bring that cloud experience on-prem or is it both? It is truly both. Because what you've seen is many people, and if we were talking four years ago, you would have been asking me questions. Oh, I just talked to Fred and he says everything's going to the cloud. And people tried that student body right to the cloud of their existing apps and it was like, oh, crap, right? You know, it's hard to replatform, to refactor those applications. And when I got there, I got the same app, right? You know, it's like, wow, that was a lot of investment to not get much return. Now they look at it and say, oh, boy, you know, I can build some new apps in cool new ways, right? With these cloud native services, I can now have this agile, private, hybrid cloud environment and I truly can operationalize across that in a flexible way. And sometimes we have customers that are bringing workloads out of native cloud and saying, oh, that's become too big in my operation role. You know, I have different governance requirements. I'm going to bring that one back. Other cases are saying, oh, I didn't want to move it to the VMware cloud on Amazon or, you know, IBM, the migration service is really powerful. I want to get out of the data center. Other cases, they look at their cost of capital and the size and scale they're operating and says, hey, I'm going to keep 80% on-premise forever but I never want to be locked in that I can't take advantage of that. Should there be a new service? It really is all of the above. And VMware and our Dell relationship and our key cloud partners, now 4,100 cloud partners strong is really stepping into that in a pretty unique and powerful way. And the key is that operational impact, is what I was saying. So Pat, just one of the challenges we've heard from users we talked to is this was supposed to get simpler. Virtualizing it, you know, I kept all my old applications. Going to the cloud, there's more skews of compute in the public cloud than there are if I was to buy from Dell.com. In management, we're making steps but it's heterogeneous, it's always add, nothing ever dies. How do we help customers through this? Yeah, and I do think they're, we're definitely hearing that from customers. And they're looking to us to make these things simpler. And I think we've now laid the templates for a truly simpler world, right? In the security domain, intrinsic security, build many of the base security capabilities into the platform. Automation, automate across these multiple cloud environments so you don't care about it. We're taking care of it against your policies. Being able to do that and have an increasingly autonomous infrastructure that truly is responding and operationalizing those environments without you having to put personnel and specific investments right at that fundamental operations level. Because it's too big, it's too fast. You can't respond at the pace the business requires. So I feel really good, we have some key innovations. You'll see us announcing. We're going to talk at VMworld, right? Oh, absolutely. Okay, I will 100% be there. We have some cool announcements in this area by VMworld as well, specifically in some of these management automation. We see some of that applying some new AI, ML techniques to be able to help with some of those workload management and policy management areas. So some really cool things going on to help these problems specifically. And we've seen, we saw a blog recently about you guys working on some blockchain stuff. I know it's only days there, but it's exciting new technology. Yeah, and the blockchain stuff is what I'm really, really pretty excited about. We have some algorithmic breakthroughs that right now, blockchain on a log scale, basically scales at log or super log, right? Which meaning it's problematic, right? As you get lots of nodes, right? The time the resolve nodes gets to be exponentially expensive to be able to resolve. We've come up with some algorithmic breakthroughs that drop that to near linear. And when people look at that, they sort of say, wow, I can make my blockchain environments much larger, much more distributed as a result. So as a result of some of that work, we'll be increasingly making blockchain as a primitive. You know, we're not trying to deal with the application level, you know, for insurance, for financial, but we can increasingly deliver a primitive infrastructure along with vSphere and the VMware environment that says, yeah, we've taken care of that base issue. We've guaranteed it from a vendor you trusted. And you might remember there was a couple of breaches of some of the blockchain implementation. So, yeah, we hope to take care of some of those hard problems for customers and bring some good breakthrough engineering from VMware to that problem. Well, it's great to see companies like VMware and Enterprise plays IBM obviously involved into bringing some credibility to that space, which everybody sees crypto, oh, they don't walk, they run, but there's real potential in the technology. I want to ask you about a Silicon Valley question. Okay. So, if I broadly define Silicon Valley, let's include, you know, Seattle. And we generally don't do that, but that's okay. Because it's technology industry, but the technology industry seems to have this dual disruption agenda. We've always sort of seen tech companies own this horizontal stack, you know, and go attack and cloud and big data and disruption. But it seems like with digital, you're seeing them attack new industries, whether it's healthcare or groceries or media. What do you make of that? Can Silicon Valley broadly define, pull off this dual disruption agenda? You know, I really believe it can, right? And that I'm, you know, being part of it, I'm a huge optimist on it. I don't think it will be exclusive to Silicon Valley, right? You know, there's a tech community in Boston that's a bit more focused on healthcare, right? Obviously the cloud guys coming out of Seattle, you know, Austin and, you know, Texas has increasing, research triangle, when you go around the world, you see more places because, you know, in that sense, one of my favorite cartoons is a picture of a dog at a terminal. I'm sure it was a Dell terminal, but, you know, and the caption reads, right? On the internet, they don't know you're a dog, right? You know, the point being, you know, hey, when you're on the net, it doesn't matter where you are, right? And then enables innovation, whether that's Afghanistan, whether that's Bangladesh, whether that's Myanmar, you know, any of those places become equal on the net. And it does open up that domain of innovation. So I view it much more as tech is disrupting everything. And that's my theme of tech is breaking out of tech. Clearly the hub of that is Silicon Valley, right? You know, that's a center where, you know, you know, every third door is a new startup as you walk down the street. It really is an incredible experience, but increasingly, you know, that innovative disruptive spirit is breaking out of Silicon Valley to, you know, literally across the world, you know, you know, the Chinese think they might be the number one. You know, Europeans, oh, sort of a renaissance in France, you know, that we haven't seen for many years and so on. And I do believe that it will continue to be technology in this horizontal way, you know, but increasingly, and I think, you know, Amazon has led the way on this, which is that we're seeing, boy, we can disrupt the entire industries, you know, leveraging that, you know, Tesla and automotive and Airbnb's, all of these are changing industries in fundamental ways. And I do not see that slowing down at all. You know, I'm thrilled to see, like, you know, healthcare, right? Boy, I have not seen, you know, this amount of disruptive technology startups in healthcare, healthcare, one of the lowest percentage of spend on IT. Can you imagine that? Right? You know, at that level, and boy, we're starting to see that pick up. So industry by industry, I think we're just getting started. And that's an industry that is really ripe for disruption. Oh my gosh. So Pat, we're going to hear about some of this this afternoon at your keynote, I presume. Maybe show us a little leg there and we'll wrap. Yeah, yeah. Hey, you know, we're, today's keynote, obviously going to talk about, you know, the better together aspects. We'll update on VSAN and HCI and our strategy there. Some of the cool things we're doing with Dell and AirWatch workspace one and the client space. You know, we're going to talk about networking. You know, I'm going to lay out our networking strategy and we're going to give a teaser this afternoon of a broad set of networking announcements that we're doing this week and hope to really lay out what we think of as the virtual cloud network of the future and how the network is essential to that future. So we're going to have a little bit of fun there and you'll see me don the VR headset. And hey, we're going to go into the virtual, virtual data center today and it'll be fun. Virtualization inception. There we go. Well Pat, on a personal note, you've been a great friend of theCUBE and we really appreciate that. And you've been an awesome guest. We saw you come from Intel with an amazing career and we just see it coming from there. So congratulations on all your personal success, your team success and continued good speed. Hey, love you guys. It's always great to be on theCUBE. You guys do a fabulous job. Yeah, for a live tech coverage and it really has been a lot of fun. And next year we're going to go party for your 10 year anniversary of theCUBE. Love it. Okay, cool, very good. Thank you. Thanks so much. All right, keep it right there. We'll be back with our wall to wall coverage of Dell Technologies World. You're watching theCUBE.