 Live from San Francisco, celebrating 10 years of high-tech coverage, it's theCUBE. Covering VMworld 2019. Brought to you by VMware and its ecosystem partners. Welcome back everyone to theCUBE's live coverage here in San Francisco, California for VMworld 2019. We are here in the broadcast booth. We have two sets going on all day for three days of the last day and winding down VMworld of our coverage. I'm Jeff from my co-host, Dave Vellante. Stu Miniman's holding down on the other set. Here we are going to analyze what's happened at VMworld 2019. We've assembled the top industry analysts, my co-host Dave Vellante, Peter Burris, and David Floria with Wikibon who have been in the analyst sessions in the hallways doing briefings, digging, getting all the data. Let's analyze it. Guys, welcome to theCUBE. Welcome back to theCUBE. Good to see you. Thank you. All right, so what's the analysis? VMworld 2019. What's the core of it? I believe that the core of it is that they're taking their centralized and data center platform and extending it, extending it to the edge, extending it to every aspect, extending it to multiple clouds, not just AWS, but a whole number of clouds, extending it right the way down to the edge, even with ARM processor capabilities and extending the interoperability, the hybrid nature of those offerings and trying to establish themselves as one of the core platforms for distributed hybrid processing. Peter, what's your take? Obviously the business model with Pivotal, they got security in there. What's your analysis of VMworld 2019? What's happening? My analysis of the show is it's, I'd say it's interesting. It's not as strong as it could have been, but let's start here, that for what David said, look, these guys made a major bet three years ago that a lot of, it was like on a knife's edge, which way is it going to go? And it went the right way. And we observed last year that it went the right way not just because it was a good idea, but because Galsinger's built a team that can execute. And what I would say out of David's stuff, cause I think you're a little bit, you're a little getting ahead a little bit on some of the edge stuff and there's still a lot of work that's got to get done. But I think what users should walk away from the show with is they made a bet, it turned out to be the right bet and this is a team that can execute. And the promises that they have been making, they have been realizing. And that's where I say that it's kind of, it's almost a weird thing because in many respects, VMware could be screaming from the rooftops at this point in time that they are Switzerland with teeth. They are, they can work with everybody, but do so in a way that actually does have manifest impacts on how digital businesses work. And so I think in almost a weird way, VMworld 2019 was more subdued than it could have been. The industry is still looking for that thought leader, that company that's going to provide that kind of central, that kind of the centerpiece of what's going to happen. And a lot of folks don't want it to be AWS. And it's almost like VMware could have been a little bit more forceful, a little bit stronger in how they talked about the success that they're having. So you're saying they're a little bit humble. They could have been louder and prouder about their accomplishments. Or sometimes I almost wondered, do they really know the tiger that they're riding right now? Because there are a lot of enterprises out there that are truly starting to bank on these guys. And their success is being increasingly tied to VMware's success. Hey, Peter brings up a great point. I want to get your thoughts on this because you've been digging the numbers. I think they actually have a great team. They got all these business units. They seem to be kind of getting them into formation. It's almost as if like, they don't want to brag too much because like they got more work to do. Have you mentioned the edge? And I think you laid it out perfectly in terms of what they're trying to do. I think, Peter, you bring the reality to it, but they're still got to beaver away on some things. They got to work to do. What's your take on this? So I want to pick up on something that Peter said. So Pat said strengths lie in the differences, not the similarities. There's a lot of differences between the bets that VMware is making and the bets that Amazon is making. Now, can they both pay off? Yeah, they probably can, but we've noted the differences. Amazon doesn't talk about multi-cloud. Amazon says cloud security is great, you know? Don't say it's broken. That's a bad narrative. Amazon says that they want to be, or they are the platform for developers and the future of the best infrastructure and developers company. That's what VMware wants to be. So I see those two at odds. Aren't they different animals though? I mean, Amazon's in the cloud business. They are different animals, except when it comes to the large enterprises that this year have actually put stakes in the ground about how they're going to move forward with cloud. And that's where- What are those stakes? Well, first off, they're saying where the data goes, that's where the service needs to go. They're starting to acknowledge that the relationship between data and IP is very real. They have fully acknowledged it's going to be hybrid cloud or it's going to be multi-cloud and that SaaS applications that are going to be still, as we bet with our analysis, is going to be the dominant feature of that. I don't mean to cut you off, Dave. Oh, it's okay. But that's where the enterprise is going. The enterprise doesn't want to spend a lot of time talking about S3 and Object Store. They want to talk about how the services are going to get to the data where they want the services to be. Good point. I think there's one other point that we should add to that. What VM's capability is, is that you don't have to migrate the applications. VMware owns those applications and the cost of migration is huge. If the applications in VMware. If the applications in VMware. So they're offering... Which many are. Many are. Many are, yes. So they're offering a lower cost way of getting to the cloud if they can execute on the capabilities of putting containers into their platform and to make it a microservices platform. So if they deliver that and maintain that continuity with their existing base, that is a powerful place to come from. Although, David, I think you'd agree with us that even in the cloud today, things like microservices are not really the as is position. It's definitely, it's going ahead and it's moving forward. Yes. So VMware can show, we can get you to the cloud experience. We may lag a little bit when it comes to containers, but it's going to be a few years before containers. Guys, Pat Gelsing, I want to get your reaction to this because this is, you might, you guys have to add some color to this because he left it just hanging out there. His last comment was, looking forward 10 years and look back for 10 years of the CUBE coverage. He said, networking security and Kubernetes are the three waves that you need to be on. Networking, security and Kubernetes, not networking security. No, networking is a category. Networking needs to be solved. Security and Kubernetes, three waves, you've got to be on those waves. What does he mean by that? What do you think he means by that? Networking in terms of on-premise networking. Well, I think that, I'll start, David, but I think the first thing to note is that, and David and I have talked about this a lot in some of the segments we've done. The cloud was miscast as a centralization trend. What the cloud really is, is a framework for how you think about distributing data and distributing the work that's going to be performed against that data closer to where it's actually required and where it's actually created and consumed. And that's really how we should be thinking about the cloud is a way of distributing work and distributing data to where it needs to be. That means networking is essential because in many ways, and we're starting to hear this from large users, in many respects, they're wondering how their networking strategy and their cloud strategy are going to fold in and be the same strategy. On the security front, yeah, you got to have end to end, but how do you put a perimeter around a cloud? That's not clear. And we're thinking about going towards data security or data security and zero trust security, but perimeter stuff is still very important. There's some very new technologies and interesting technologies that are trying to bring some of that perimeter stuff to that notion. Networking, security, and the last one was Kubernetes. The thing that's interesting, and I can see why Pat would say that because it's very true for VMware. They're betting on Kubernetes. Is that another knife edge bet? Well, no, it really isn't. See, maybe you could say this, but look, a virtual machine virtualizes hardware, a container platform virtualizes the operating system. And so is it possible the containers are going to end up virtualizing VMware? And what does that mean for VMware? And so VMware has to reach up and be a phenomenal place for containers. Otherwise, the value proposition is going to move up and be on them. Yeah, Kubernetes has been picked because that is an open source. It means it has the potential of being a standard across multiple clouds and offers that ability to automate and orchestrate across in a way that no other platform, no other set of software can do. It's a long way to go. I mean, he's putting a bet on it and I think it's the correct bet to do that. But it's a long way to go before you will see if that's the right bet. What about networking and security? Obviously, IOT's in there, Peter mentions these use cases that requires data. I mean, the original cloud one dot oh definition was, I'm building an app, I'm a startup. I'm going to just build my app in the cloud and I'm not delivering the data in the cloud. And all my users are going to connect to the cloud. Now cloud 2.0 has really gone down what you're saying. So networking becomes fundamental. Networking becomes fundamental, not just to move data around, but to move code to data as well. Well, to your point, it's a massively scalable distributed system. That's right. It is the massively distributed, scalable distributed system. And the other thing that I'd say about, Kubernetes, networking and security is Kubernetes is a way of describing, we're thinking about application from a clustering standpoint, which is inherently networking. And so Kubernetes in many respects is describing how application networking is going to look in a few years. But the other thing that's interesting about it is because it's virtualizing that operating system, challenges associated with distribution of code, of versions of all that other stuff about how you handle software like cycle with Kubernetes, it's going to be that much more cloud-like in the future. And I think as we go forward, it would be interesting to imagine a security model that is built on top of Kubernetes that allows you to literally take elements of containers and vary those containers in, just like every 36 hours. So no part of your code base is older than 36 hours. Think about how much more secure that would be than what we have today. I have a big fan of Kubernetes. I think it's a great bet. I don't think it's a knife edge. I think it's pretty obvious and it's either going to go one way or the other. The cloud guys are either going to fork it and slow it down and hold it. But the fork can slow it down. But it's still going to go. And look, and look. Job number one. Job's not done so Kubernetes doesn't run. Let's put it this way, John. That in 10 years, in 10 years 80% of software is not going to be based in Kubernetes. Guys, switch topics here. I guess it's safe, Bet. Yeah. Let's switch topics. I want to get analysis on VMware as a software company. Pat mentioned Nestera, which was SDN, which became Self-Defined Data Center. Obviously big moves with 5G, which I think is more of a telegraph of the future. Service provider narrative. Kind of sounds like going at the Cisco to me. So Cisco's value proposition. Again, to your point about directionally correct. VMware makes these statements. They're most product directions with a demo. They show little directions and some clarity then they got to fill in the blanks. That's been their move. Cisco's up and running. They have a network devices. They have UCS, ACI. Is there a collision course with VMware and Cisco? Pat said on theCUBE, we've got a multi-billion dollar networking business. He said in the past that Cisco's a great hardware company. We want to do to networking and storage what we did to compute. I think there's no question. And then the data from ETR, the enterprise technology research guys, the guys that do the panel showed that very clearly, NSX is slowly negatively impacting Cisco hardware sales. So yes. I mean, there's absolutely no question in my mind. Having said that, when you talk to customers and I've talked to several this week and I've asked them that question, how is NSX affecting your Cisco spend? These are Cisco customers. And they say, well, we're sticking with Cisco. We're going with ACI because I mean, that's the majority of Cisco customers. To your point, David, it aren't going to just migrate off and throw away their Cisco gear. Not going to happen. It's the same thing. They've invested a huge amount of money in doing that. It works. And as long as Cisco- Who's today, Cisco? No, the customers have invested that huge amount of money in all of that infrastructure, all of that way it works. As long as Cisco continues to invest and continues to invest in software as well, for that platform. If you were advising the CEO at Cisco, what would you advice B to him? Peter, you're thinking cap on. You're coming next. Hold on, hold on. I want David to go, oh, he's dying to jump in. The core that Cisco has to manage is finding solutions to multi-cloud and hybrid cloud issues. There has to be an end to end. They have to provide more of the data planes, more of the control planes, and more software to enable this connectivity across these different clouds. Can Cisco move up the stack as fast as VMware because one's a software company, one is a hardware company bit, but it's software now. That is the challenge that Cisco has is putting in place the people, the resources, and the techniques to actually drive that fast. So either of your thoughts. You're advising the CEO. So before I advise the CEO, I'm going to make one quick observation about the collision course. And I was trying to think about this, Dave. I can't think of, just off the top of my head, I can't think of a single hardware company that was driven out of business by VMware when they virtualized systems. Maybe there were some, maybe there were some that would say, oh, I'm gone because of VMware. I think it made it more productive. It probably took some of the capacity out, but at the end of the day, the stuff doesn't run on hamsters, right? It's an interesting question. Son? I don't think it was VMware. Not directly, but it certainly gave a lot of tailwind to x86. Linux and Intel killed Son. Gave a big tailwind to x86, but that was a different set of trends, right? It was related, you're right. Definitely related. But the point is I'm not sure that NSX is going to drive networking companies or network companies. No, I didn't say they're driving out of business, but would you not agree that VMware made the server business a lot less interesting? It changed the value, it changed the degree to which the hardware itself was regarded as the asset around which the IT organization had a great itch value proposition, it's organization, it's work-close itself. VMware became much more strategic than- No question about it. No question about it. No question about it. No question about it. In Dell servers. We should talk about this more. Let me know if you have any advice to the CEO. So here's my advice to the CEO of Cisco. Go. Your networking guys are killing innovation in your company. Right now the networking guys have an absolute stranglehold on how Cisco behaves, where Cisco does. You see, we've all encountered these really great ideas bubbling up out of Cisco and they emerge and they're there for about six weeks or eight weeks or six months. And then they suddenly disappear and you go and you do the forensics on the crime that was committed and it turns out that the networking hardware guys ended up rising up and effectively launching the antibodies on every new innovation virus. You mean internally to Cisco? Well that's a really interesting point. They have a Clayton, Christensen, innovators dilemma problem that they got to fix. And Chuck Robbins I think understands this and this is why he's putting so much emphasis on DevNet because he sees that the DevNet opportunity to create infrastructure that's programmable is a way potentially out of that innovation lock. If I was advising the CEO of Cisco I would kind of take the same cultural thing right. I think you're right on the money on the culture. P.L. Singer has a team, you point that out. It's really good insight. My advice is simple, double down on DevNet. Turn the networking guys by the way who have the keys to the kingdom in every single enterprise. Talk about running and operating enterprise networks and data centers. The network guys are the most powerful people in the companies in IT. After developers. Turn them into active coders. That's what DevNet is doing. That is totally the right move. Change the culture within your customer base. If that's not going to work internally then you know. But the whole of the cloud thing has brought together storage, networking, and compute as a single object, a single distributed object. And one of the things that VMware has done with NSX is reflect what AWS and Azure were doing beforehand, which is lowering the cost of storage very, very significantly and putting the functionality into software as opposed to hard. If I was Cisco, I would be looking hard at doing something big with Google because Amazon is VMware's preferred partner. I would figure out a way to get belly up to Google and figure out something bigger. It's not going to happen with Microsoft. They don't really need Cisco. Google needs someone like Cisco. So remember back in the days. I'm sorry, from a customer engagement standpoint. From a customer engagement standpoint. And to help Cisco's cloud relevance. Because right now, even in the multi-cloud world, not even knows what you just said, David, that's exactly what Cisco's doing and nobody even knows about it. That's right. Well, they could be the backbone of the cloud 2.0. I mean, go back in history, coaxial cables had many computers attached to them. Then you had, you know, cat five, cat three, wiring, you had hubs and you had sub networks. You had internet working, campus buildings. That became the network. Cisco is the same kind of opportunity for cloud to be the on ramp. That's what VMware wants to do. And they want to tell wants to be the on ramp. VMware wants to be on ramp. Cisco's running the network. They're moving the back. Another piece for Cisco, and you've said this before, Peter, is security. I mean, you talk about VMware being the cloud security company. If I were Cisco, those would be fighting words. I mean, Cisco is in a strong position from its networking base to be a leader in security. Yeah, and so, and I think you got a good point. I think you got a good point, David. The thing I'd say, John, is that, and you guys have all heard me say this, but I'll say it again, what killed many computers was not just the microprocessor. It was that DEC had DECnet and DG had digital, DG network was. Internet. And a long came, and a long came Ethernet, and a long came IP, and a long came Cisco, and it flattened all those networks. Networks want to be flat. And AWS, and you start talking about Kubernetes, all these little proprietary tweaks to Kubernetes, which fundamentally is how you think about doing a programmable network. The world, physics, and everything else, technology is going to want to flatten that stuff as much as possible. And Cisco should be participating in that. And they're not, because the networking guys are saying, no, no, no, nobody gets into our sales organization, except us networking hardware guys. And that's a problem. They got to go back, VMware went back to their roots, that made them stronger. Cisco's got to go back to their networks, thinking it differently, I agree with you. They could be the backbone for multi-cloud. That's their opportunity. But it's got to be a flat network to do that. They should be a flat internet working. They've got this entrenched north-south mentality, even though they see the trends. Okay, final summary guys, let's wrap this up. Let's go around the horn and start with Peter. Takeaways from 2019, VMworld, our 10th year. Cube Coverage, what's your thoughts? Final thoughts? The machinations, two, I'd say. The organizational machinations inside Dell Technologies have got a long ways to go. There's a lot more coming, as Michael figures out how he wants to institutionalize all this thing. But he's got two great executives. Pat Gelsinger has turned into a pretty darn good CEO. So I'd say that VMware is seeing the market good. They've got a great team. They're executing really well. They're at least putting bets where they need to. But here's, I think, the biggest weakness. And this came up in one of the sessions in the analyst side. We all know how VMware expects things to come to VMware. And how VMware is going to be effectively the manager of record, the cloud of record for all clouds. Okay, good. But it's not going to be. The reality is VMware is going to emerge. This is an extremely important on-premise and cloud technology, if that's what you want to do, that allows companies to have those options about where they put stuff. But how is VMware going to express itself to other clouds? From a management standpoint, from a control plane standpoint, from a data standpoint, that's not clear. And big enterprises are going to start pushing them pretty soon to say, okay, great, but we're not just going to do you. How are you going to be managed by the stuff that we want? How are you going to be a resource where we want our management points to be? That's going to dictate terms. Right. Customers are going to dictate terms. Absolutely. That's a great point. David Flurry, you're up. All right, so the biggest challenge for VMware is making themselves successful in the public cloud. AWS owns that business. They are very, very cost effective. They are driving very, very hard. And the clash is going to be when AWS goes into the distributed side and comes into full contact with Dell and VMware in that space. So the race is on between the efficiency that they can create for this network and the efficiency that AWS can create by getting better and better at distributed computing. They will go into multi-cloud. They will go into it. All right, so too. Dave, your thoughts? You know, I've talked a lot this week about multi-cloud and what I think is real and what's BS. You know, talked about VMware's acquisitions. I want to change it up a little bit. When you come to these events, the big picture of how we're changing the world and we're changing society, tech for good, all that stuff. I just want to make a point for historical context. I think it's indisputable that the first 50 years of last century, from the early 1900s to 1950s, were far more remarkable than the last 50 years of IT. And I think sometimes we sit out here in Silicon Valley and smoke our own, you know, whatever. And think about- It's legal here actually. How we're changing the world. And I'm not saying we're not changing the world, but Pat Skelsinger said there's never been a more important time to be a technologist. Well, maybe right. And I'm not saying this to disparage the statement, but I'm just, again, trying to provide some historical context. You're up against telephones, planes, automobiles, the electrical grid itself. So I leave you with this question. What's more impactful from a society standpoint and from an economic standpoint? The move from automobiles to autonomous vehicles or the move from horses to cars. And I think that as an industry, we have a long way to go in terms of being the most important time to be a technologist. I mean, I think I agree with Skelsinger that it's the most important time to be a technologist now because more than change is required. I think if you look at the data, I think this shows all about Cloud 2.0. I think some of the things that Peter and David, you pointed out is points right to it. Customers are dictating terms and the infrastructure is evolving and the enablement of what that system looks like is going to spin in favor of the customer. And they're going to start making those changes because to change society, it's not going to come from the vendors. That's just philanthropy. It's going to come from people building applications. I think the Cloud 2.0 equation has to fill out. Well, I think you're right. If in fact, this is going to be the most important time for technologists, it absolutely has to come from the buyers of technology and the people applying technology, not the vendor, no doubt. It's a great question though, Dave. It's a great question. We're going to take that question to our power panels in the studio, Palo Alto in Boston, of course the Cube Studios, check it out. We are here wrapping up VMworld 2019. Want to do a shout out to VMware for allowing us to be part of their ecosystem for 10 years. It's been a great run from 2010 when we had cameras that we turned on. We thought they'd work, they did. The system got better every year and that's thanks to the generous support of our ecosystem partners who sponsored the Cube so we can create content editorially and co-create with the sponsors for the betterment of the audiences. And thanks to that, we get better equipment every year and shout out to the great team we have here. Amazing execution, two full sets. And thanks to my co-hosts and the team, Stu's not here, he's on the other set. Jeff Frick who's running it all, what a great team. I want to thank VMware and the entire community for 10 years. That's a sign off for the Cube. 10 years at VMworld 2019, thanks for watching.