 Live from Las Vegas, it's theCUBE. Covering VMworld 2017, brought to you by VMware and it's ecosystem partner. I'm Stu Miniman, here with my co-host Keith Townsend and you're watching wall-to-wall coverage of VMworld 2017 on theCUBE here in Las Vegas. Third day of programming, we've done so many interviews. A lot of people went to parties last night, up early for lots of executive meetings, but we go strong through the whole show because we've got great guests. So happy to welcome to the program, first-time guest, Peter Fitzgibbon, vice president and general manager with Rackspace and welcome back to the program. Ady Patel with VMware. Great to be here. All right, so Peter, Rackspace, interesting transformation over the last few years. We've had theCUBE at OpenStack for a bunch of years. I've heard almost no discussion of OpenStack this week at the show. I'm not complaining. Yeah, I've talked to Rackers though at Reinvent. You have kind of reinvented the business there, but the VMware partnership is one that's been going on for many years. Some people I talked to don't understand, I mean, this is a sizable business that you've been doing. I said, let's measure the Rackspace managed VMware business against the entire revenue stream of OpenStack outside of what Rackspace does, and it's an interesting comparison. Rackspace continues to be the multi-cloud company offering our customers the choice and flexibility they want, so our OpenStack practice continues to grow strong and we continue to invest there, and as we do in our VMware practice, which we have a great partnership with Ady and his team over the last 10 plus years. All right, so for us, the partnership's only going stronger, and if you walk around the VMware with all the banners, you walk into the airports, the investment Rackspace is making around VMware technology, I couldn't be much more happier, so thank you for that. So Peter, to Stu's point, Rackspace has been part of the VMware community for a long time. I've run into a couple of rackers on the show floor, talked through kind of what they're doing with their feet on the ground, great work. Can you talk through the relationship with the customer to this point? I mean, Rackspace known for fanatical support, how has that conversation changed over the past three years of Seoul as we've gone through this changing VMware strategy to where we're at today? Yeah, we'll continue to try to support the customer on whichever technology they really want to land on, so it starts with the planning and analysis phase that we sit with customers and analyzing their workloads and trying to figure out what's the best fit for them outside of determining is it OpenStack, is it VMware, is it, or fanatical support on top of AWS. From a VMware perspective, we're really helping people determine how to move out of the data center or at least not extend the data centers as they have them right now. We recently launched our Rackspace Private Cloud powered by VMware Cloud Foundations, went into general availability last week, so that's a global effort that we're discussing with the clients and it's proving a very attractive option for those looking for an alternative to their own Private Cloud and moving to a hosted Private Cloud model. Yeah, Peter, that operating experience is one of the things that customers have been challenged with. And Rackspace, known for, they know how to do this. Talk to us about some of this journey as to how your customers are seeing things. Rackspace has had a few different Private Cloud options. Talked about you give your customers choice, but what's different now in 2017 and what's the mindset of your customers? We continue to offer 24 by 7, 365 fanatical support. It's what we really see as our true differentiator in the market or we have 150 certified VMware Rackers on the team that really go above and beyond every single day for these customers and looking not just at how to migrate them to our Private Cloud, but how to optimize them when we're there. When they've landed on a VMware Private hosted Cloud solution, how do we really optimize them and really get the full value of the technology and these are expensive and difficult technologies to use. We want to make sure people are really in the true value of NSX and VSAN and now with VCF, which we're really excited about. Yeah, for us it's, as we were speaking, I mean the biggest challenge is the constraints are skilled resources. Having 150 specialists out there with fanatical support with the great VMware technology and the standardization. And in some ways, the VMware Cloud announcement is kind of making the awareness that you have a Cloud stack that you can now get through even a Rackspace Private Cloud. So for us, it's really all boats are rising as a result and now having the skilled capability to then accelerate the deployment and delivery and operations is pretty exciting. So Ajay, can you talk a little bit about working with Rackspace specifically? Because Rackspace has a tradition of having a very pronounced way of supporting customers. Whether you're a Fortune 500 or you're a small mom pop shop, Rackspace is going to come with full engineering might and help build the most reliable solution. And that comes with kind of, I would imagine, a predisposed position on something like VCF VMware Cloud Foundation. What has it been like, the engineers? I'll speak the best thing from one of the joint customers that we had the opportunity to be on a panel with Chotel. And it was interesting to say how Chotel said, Rackspace is part of their operating team. So they were in all are up front in terms of having a partner who can help them with a choice. They made the selection based on the SLAs to support. But more importantly, they're just an extension of the operating team. And being able to have a single team manage both the on-prem and the Cloud without having to build a separate kind of Cloud team. That was a critical piece of this decision. So kind of this common operating model with the seamlessly augment with skill set, that was really what resonated for Chotel and was the reason they chose this one. The operating model is something I was just going to go to in terms of really helping people figure out how they're going to live in this multi-Cloud world across multiple different technology stacks. And that's what our fanatical support is intended to be to really be an extension of a homegrown IT team so we can really get the full benefit out of these complicated technologies. All right, Peter, you talked multi-Cloud. And one of the things we talked to customers is a lot of times they say they have a Cloud strategy, but how they got there wasn't necessarily as planful as they might have liked. I had somebody writing for Wikibon a couple years ago said we have Composite Cloud because you kind of look at it and you always said, you know, do I have Amazon? Yeah, everybody does, you know. Oh, I've got some app that somebody needed on GCP. Rackspace is a managed service provider for a lot of different pieces. How do you help customers get their arms around it? You know, and maybe talk with the VMware and Amazon, the VMC stuff. How do you look at that in the future? How does that tie into kind of the skill set that your team has? So we often see customers coming in with that Composite Cloud situation where they're like, we think we're multi-Cloud but not truly. Because they don't have a defined strategy about why they put certain workloads in certain places. It just grew up organically often through lines of business. VMC on AWS is a really exciting offer for us and that we're going to be launching into in early 2018 and really gives more choice to our customers in terms of where they're going to run their workloads, be it running them in different availability zones that Rackspace doesn't cover or potentially uses a Dior solution. So let's dive into that Composite Cloud statement. I really love that comment. What multi-Cloud is one of those things. You don't know you don't have a multi-Cloud until you don't know you don't have multi-Cloud. What are some of the surefire indicators that customers are in a more composite cloud experience or environment versus a true multi-Cloud? Like what is that conversation like? What's a good best practice, yeah. I think there isn't a lot of good best practices from a customer's point of view. I think they often come in and we lay out there, look at their architectures, look at their different applications. They're often just that the central IT doesn't know where most of it is running half the time. So it's really like, okay, let's look at each part of this and decide for you, what's the best fit? Where should it go? Should we be putting something on Azure or Azure Stack? Should it be better suited to OpenStack? Or is it they're very familiar with VMware and they want to continue to leverage VMware either on a hosting model or internally in their own data center? Okay, what we're learning is they just don't have visibility. So the biggest interest in the demand when we launch our cross-cloud or cloud services, the notion of having visibility of what's running where? And the second question is how much is it costing me? And what can I move and what are the data security leakages that I put in place because these things weren't controlled? So those are kind of just knowing, right? Know where your data is, know where your workloads are and how much they're costing you. That's the first baseline they're looking for help on. Once they've got that then they're like, okay, how do I still provide some level of self-service and control to the end user while putting some structure by which I can go to a multi-cloud strategy? So that's the journey we're just about to see with IT coming into the world, right? Peter, I have to imagine you have an interest viewpoint on the ecosystem. Since you know, Rackspace, I think I understand better now than a few years ago what services you did. VMware just launched a bunch of SaaS offerings. There was some launch last year. I can't count how many companies are helping people with cloud cost management, licensing, you name it, 12 different aspects to take bites out of this giant elephant of multi-cloud and do that. What are the biggest pain points you're hearing from customers? Do you help advise some of them is to bring some of the pieces together? And it's not even what we see from a customer standpoint is if you think of Rackspace, we have to integrate all these clouds into our own internal systems. So we get to experience it first hand as the customer, how we create unified billing systems, how we have unified monitoring, how we integrate all our own legacy systems to deal with these clouds. So we effectively learn from integrating into our own systems, then can advise our customers on the pain points we've seen and bring them on that journey to help them through their true multi-cloud approach. So if we blow it out and customer comes to you and they want a multi-cloud strategy and you kind of show them the ugly, you show them the truth of where they're at, what's the next step? Like from a practical tactical perspective, what's like step one to helping assess applications and et cetera for viability for each one of the Rackspace offerings? Yeah, so we have a framework which we call Padmo. It's plan, analyze, design, migrate, optimize. Optimize, it took me a second to get the last part out. And trying to, the planning stage is really it where we sit with the customer and decide, okay, what does your environment look like and why is it that way? Were things made in a conscious decision or did it just happen organically? So try to figure out what did they do intentionally and what just grew up organically? Then move from there into designing or analyzing what's best fit for the different cloud strategies. Then start designing it, migrating it and then effectively optimizing it when they land on Rackspace and show the value of our 24-7-365 analytical support. Yeah, for us as a technology partner, we want to enable the core VMware Foundation but we also believe the network connectivity is the next big thing. So things like NSXT is something we're already having conversation with. Like how are we going to stitch these clouds together? How do we make it more software defined? So as we move towards this kind of policy driven, management abstraction, how do we then open up the different clouds and surface that capability? So that's really the next journey for both of us from VCF or VMware Cloud Foundation to the broader multi-cloud foundation. And Ajay, you're a cloud provider partners. What about services? Is there any joint engagement or things that VMware helps write that are deployed through cloud? So one of the big services we're all kind of coming together is on DR. You're consistently the easy step to get to a hybrid or starting to leverage cloud disaster recovery. What if we made that a native feature of the VMware stack? We can have our customer right click on a VM and protect it from all these service provider clouds. That's an example of something we're trying to kind of generalize. Now, on each of them, the complexity of operating at the scale, the visibility, the service levels, those are unique to each partner, but we're trying to make sure the platform gives you this basic capability to go capture workloads. I feel like DR is central to everyone's roadmap right. Most of our customers, nearly all our customers are recording DR when they land on Rackspace. And we're really looking into that in our 2018 roadmap to see how we make DR as a service consistently part of the offering. So, what works well and what doesn't work well? When you go through that initial set of complications, so DR is a great example of, oh, this is low hanging fruit. We either don't have a DR that's working or we don't have DR. Costing me too much. Yeah, at all. And there's kind of this, when you whiteboard it, it works extremely well. What are some of the practical business challenges that you see customers experience on that journey? There's definitely some easy options to move first for customers. DR is a common one that we see. Dev test as well in terms of, okay, how can you test out our environments and do it in a low risk way? They're always going to be those more core application, those mission critical applications that people will wait till the end before they migrate. So, let's migrate something to Rackspace's private cloud and see how it operates, that maybe as a DR environment or as a Dev environment, test environment. And then as they build confidence and see what fanatical support we offer, then they start moving more mission critical workloads. And I share the same, tier one, usually it's high availability, high design, high touch, tier two often ignored, too expensive, too hard. We're trying to go after the two or two tier three apps and just provide a convenient cloud economics for protecting those workloads. Yeah. Peter, I'm curious, how often are customers trying one thing and then moving it to another? You know, I get calls all the time, you know, data gravity of course is a big issue, but you know, if I'm building an application, sometimes it's like, oh wait, you know, maybe this isn't the best place to live. Lots of customers, you know, will build one place and run production another place. We've seen that, you know, how much is mobility concern? Is lock-in still a challenge? You know, how much, you know, what's real and what's not? I think lock-in is still a challenge, but we're certainly looking into how we're helping our customers move from one cloud to the other. We continually work in our different business units across Rackspace, be it VMware, AWS, Azure, OpenStack and see how we can offer flexibility for customers. When they realize they've gone too far on one or another, we're not seeing specific use cases of everybody moving from one to another. It's more of a pick and choose and so we're helping customers migrate from one to another as needed. So I'd be interested to know how, what, not percentage, what type of customer kind of has this hybrid IT or hybrid cloud approach in Rackspace where they build cloud native applications and then connect them to a VCF or a VMware private cloud. And I think more specifically, I think the question that I would like to get at is, is that a real thing that, not necessarily a real thing, is that impacting friction between the public cloud with cloud native applications and your ability to manage that and add that fanatical support and the developer looking to consume that and integrate it to VMware? No, I'm not seeing that friction between the different technologies. I think we're at Rackspace to try work across all of them to offer the choice to our clients and our customers as much as possible. Make sure we really offer them the best choice and put the workloads on where they really are best suited to run. You know, our position is, you know, container and microservice architecture are going to provide an extra frameworks and tools, the maturity is still in the works. And our goal is to say, can we make, you know, either VM or physical be a best place for deploying? What are the tools and capability they need to provide? So for us, networking, security, those are kind of fundamental problems regardless you're building a cloud native app or a traditional app. And how do we insert our value into the equation where it's just trying to own the whole solution, right? Peter Fitzgimmons, thank you so much for getting the update on Rackspace. And Ajay, always a pleasure. I'm trying to remember what the five-time award is. We'll talk to John Furrier, make sure we have it ready for the next time we have you on. For Keith Townsend, I'm Stu Miniman. This is VMworld 2017 and you are watching theCUBE. Thank you guys. Thanks, Chance.