 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. Hello everyone, welcome back. This is theCUBE's live coverage in San Francisco, California for VMworld 2019. I'm John Furrier, host of theCUBE with Dave Vellante, my co-host Dave, 10 years covering the VMworld. Paul Moritz laid out the stack early on. We saw that and watched it go through its motions. And now 10 years. Software mainframe, then the marketing people got ahold of that. Software mainframe turned into the cloud. Now, hybrid cloud, seven years after we first started talking about 2012, it's been great. Our next guest, Paul Fazone, SVP and general manager of the cloud-native apps. This is a business unit within VMware that is going to the next level. This is the Act 3, as Jerry Chen said in an interview I talked earlier for VMware as a company. I won't say moving up the stack because there is no stack, it's cloud, right? So it's applications on top of operating infrastructure. DevOps, going enterprise scale is about developers building apps, operating them at scale. This is a big focus of what you're doing. It is. At the end of the day, one of my close friend of mine who's in front of customers all the time reminds our team constantly that our customers' applications matter the most because that's what they used to get in front of their customers with. The development teams and the tools they're building to use the apps comes second because that's what supports the apps and then the infrastructure comes third. So in a way, there is that stack. But never forget, we're at the bottom of the pecking order, if you will, when it comes to ultimately bringing full customer value to our customers' businesses. And it's one of the themes we've been looking back as our 10 years covering VMware, I think your 14, 15th VM world is that virtualization evolved very quickly around really optimizing server virtualization, really kind of changed the game. Everyone kind of knows that or knows the history there. But it did it without any code changes to apps. And I think that was a very innovative thing. Now when you look at containers and what Kubernetes is bringing to the table, you're starting to get some clear visibility into what's happening and what's possible. Could you share your vision on what that visibility is that you guys are eyeing for the marketplace and for VMware? Sure, well, the app development methodologies are changing more today than they have in the last 20 years, right? We're seeing a lot of new concepts and approaches that right now are really only accessible to a small percentage of application developers worldwide. We want to try to bring those application development methodologies, practices, tools to the mainstream so we can touch the 13 or $14 million enterprise developers around the world and help the CIOs and their line of business counterparts that our customers get as much productivity out of their development teams as possible. At the end of the day, those apps are going to power the next decade of those organizations' success or failures with their customers. And so that's becoming a real competitive asset. I've had a number of customer discussions here this week where the primary theme is help me, help my developers move faster at enterprise scale, but in a regulated environment, in an environment where compliance is front and center. Two big things going on in your world that we covered extensively, obviously pretty impactful to the VMware portfolio. One is open source and Heptio acquisition, half a billion dollars almost a year ago, about a year, less than a year probably. We closed in December last year. So yeah, so very just recently, we know those guys, all people alumni have been covering that for a while. And then obviously the Pivotal acquisition just announced last week. Drink from the fire hose there. You must be doing tons of press briefings. Those two impact points are kind of leaving a mark. So we've been building up to this. I joined VMware in 2012 through the Nasir acquisition, but I moved into this role just about three years ago. And one of the things that we identified early on was a close partnership with Pivotal was going to be essential inside of the Dell Technologies umbrella for us to exist and thrive together. And so that's where the idea for PKS was born. So the combination of VMware R&D with Pivotal R&D focused on delivering our first Kubernetes service to our enterprise customers. We brought Heptio in last year. Once they saw what we were doing and thought about the possibility of what would happen if we actually took some of the concepts of Kubernetes and PKS and embed them into vSphere. That was I think the real aha moment for us and the Heptio team coming together and the power of what that could enable. But all along the way, we always believed that that was just covering the infrastructure side of the equation. You still needed to get to making the app developers productive and efficient in this new infrastructure world. And so, and to be able to do so on any cloud. And that's where the Pivotal piece finally came together. Last, just last month, July Pivotal put out a lot of information in the market around how they're evolving their portfolio to be very Kubernetes centric moving forward. And that was a big part about getting all the pieces lined up so that VMware could deliver what we announced this week in the Tanzu portfolio with the, with the component for building, running and managing modern applications on any cloud. We've kind of come full circle here. I mean, it's predates NYSERA, but you guys talking about the stack. So Paul Moritz used to have the whole stack. You had actually applications up here with Zimra. Yeah. Spring sources around them too. Exactly. And then you had these, what I used to call the misfit toys. Have you had some assets in EMC, had some in VMware? Paul Moritz and Joe Tucci decided to create Pivotal as the platform developed next generation applications. Now it's all come back kind of full circle there. So my question is related to that stack and particularly the dev part of that stack. This audience is not devs. Is not correct. But increasingly you've got to attract that audience. So what are your thoughts there? And so I think Pivotal's done a very nice job over the years through the Cloud Foundry Foundation, the work they've done there, through the Spring community. Spring is at this stage is arguably the most popular modern Java development environment on the planet. So we're seeing a tremendous amount of leverage of that framework. And so between the events of Pivotal is actively involved in and leads and their ability to help customers teach their enterprise developers how to get the most out of this modern toolkit. We think that there is some wonderful ingredients to a recipe to really scale this thing up in a big way. I also believe that VMware still has a lot to learn about what it means to best support enterprise developers and their organizations. And so we are quite a bit in learning mode right now. We're going to take a lot of lessons from the Pivotal team as we move forward towards the close and learn a lot more about the team and the culture and their customer engagements. But one of the things I think is front and center to what Pivotal has for customers today is their app transformation services. You've got different groups inside of customers. Some are looking to build the newest applications. Some of them are just trying to get more operational efficiency out of what they have today. Some of these customers have 3,000, 4,000, 5,000 applications in their environments. Pivotal has a set of services that come in and they help them take their existing monolithic applications and just modernize key components of them so they can operate them more efficiently and reclaim a lot of resources to go do other things. That I think is probably the lowest hanging fruit for enterprise organizations today and I'm very excited about the services that Pivotal has to make available to customers on that front. I saw it in Jerry Chen earlier in the other set I was mentioning earlier. He's a VC now at Greylock, big time tier one, VC, former VMware guy from 2003. He also worked on Cloud Foundry, so he'd allow some insight. We asked him about the white spaces where startups could thrive in. One of the trends he was kind of pointing to was how some companies are going public, some are being bought at sizable numbers, but we rift on the idea of monitoring was a boring category. Now, observability, which is basically monitoring 2.0, you got IPOs, you got acquisitions, I mean major action happening in this observability space. Now I bring this up because that's an area you think, oh, it's a white space, data, opportunities for companies to build services really points to this Cloud 2.0 application renaissance and I want to get your thoughts on that environment and what needs to be in place to make that happen. Obviously Pivotal's key for you guys, I get that on VMware side, but for the ecosystem and for the marketplace, people trying to make careers and or do things, what is that Cloud 2.0 complexity that needs to be abstracted away or? So the Heptio team had a great, Craig and Joe had this great one liner and Kubernetes is all about where the people structure meets the infrastructure. When you think about that, our enterprise organizations have thousands, if not tens of thousands of developers all trying to do similar, but a lot of cases different things at the same time across lots of different cloud infrastructures. On the infrastructure team side, you've got private cloud, you've got hybrid cloud, you've got public cloud environments that you have to get your arms around monitor, manage, secure and get visibility into. We believe that Kubernetes sits at that perfect layer between the two domains and this is a big part of why we developed Tanzu Mission Control. It sits at that perfect layer between the two domains to access the Kubernetes layer and give you full visibility into what all of your developers are doing on every piece of your infrastructure. And we also think that's going to be a very interesting place for third parties to plug into, to gain access to all of the Kubernetes clusters that we're helping our customers manage across their app landscape to do very interesting things. And so we're really excited about the ecosystem that that project will open up. You think there's opportunities for startups in there? I do, I do. I think there's a ton of opportunities. I mean think about it just really basic math. A VM based application when it gets containerized, it has just on the compute side alone, nevermind the networking and the storage side, there are 10 times as many moving parts. A typical containerized app has 10 times as many moving parts as a VM based app. If you think about that applied to the networking layer, you think about that applied to the storage layer, the security layer, you've got 10 times as many points to secure now. How do you get your head around that level of complexity as an operations person? You can't do it, humans can't do it anymore. You can't write down your access control just on a pad of paper and know what's accessing what anymore. Dave, one more question if I may. On the VM container thing, there's a debate or architectural kind of conversation that customers are having around when to do containers and Kubernetes on bare metal or with VMs? How do you guys talk to that? I'll see you. Let me ask you a couple of that because that was my question. So there was a snarky tweet yesterday. I wanted to get your reaction to it. Please. And the tweet was during yesterday's keynote. I thought we launched Pivotal so that we didn't have to run containers on VMs. Now the reality to your point is that people are running containers on bare metal. They're running them on VMs. I don't have any data, but I wonder if you could comment on that. So we probably have a couple of snarky comments of our own on this topic. Please share. One of the things that I put up on stage yesterday, I'll start at kind of a little little and I'll work my way up. At the base layer, the testing we're doing with Project Pacific which is something we announced this week which is effectively bringing Kubernetes into the heart of vSphere. We're actually using Kubernetes to make vSphere better. We're also going to expose Kubernetes to our customers through vSphere just like we expose VMs today. This is a pretty exciting project for the company. In our early testing of this project based on the advanced scheduling capabilities of the ESX hypervisor to take advantage of modern hardware, we're seeing an 8% better performance in a certain test suite versus what you'd see on bare metal. So already at the early stages, we're seeing some benefits. Now take that a step further. The big public cloud providers out there, if you look at services like GKE on Google, if you look at AKS or EKS on Amazon, AKS on Azure, every single one of their Kubernetes services is run against a virtualized environment, not on a bare metal environment. Why is that? Well, because their customers are using containers and VMs side by side. The flexibility you get out of that virtualization layer, whether you're a big public cloud provider or you're a smaller enterprise shop running your own data centers, the benefits are proportionate or they're equal. And so- So the narrative's off a little bit of what you're saying. What I hear you saying is people use virtualization for a lot of efficiency and scale reasons. That's independent of what happens with Kubernetes decisions. So if you decide you want to run Kubernetes on bare metal, go to town. We think- If you want to do that. If you want to do that, but we don't, we actually see a lot of customers who have started down that path. When they go to get to that operational stage, they're realizing they're now dealing with firmware again, they're dealing with Nick drivers again, they're dealing with low level stuff. And they can't easily take that and turn it over to their ops team that's already managing a huge virtualized estate and operate it with the same tool. So it's a really a layer thing around scale. You do the virtualization for a variety of reasons and then Kubernetes sits on top of it for a whole other reason. And the, I'd say it's operation scale. These operations teams need to, just look at the number of announcements we made this week. For an ops team to get their head around all of these new technologies simultaneously is impossible. To bring them in one new capability of time into the thing that they're already operating for that organization is very powerful. And if I understood yesterday, you're claiming 8% better performance relative to bare metal. I don't know if that's apples to apples or what kind of juicing you're doing on the benchmarks. Look at the ESX schedule that juices it right there. I want to ask you about integration. And if you look at, it's sort of as a quasi historian of the industry, you go back to CA with all the acquisitions, right? You saw Oracle force it with Fusion, a different layer of the stack, I know. Certainly Dell did a lot of acquisitions. Some of them worked, some of them didn't. EMC, same thing. Pretty successful, actually. VMware, great engineering, very strong go-to-market, obviously, and really good at acquisitions. My question is on integration and with the NYSERA background, I wonder. I mean, NYSERA seems to be very well-integrated into the VMware platform. How is integration, the state of integration today within VMware, is it a lot easier today because we're living in this API economy? What about VMware's sort of integration ethos? What are the challenges? I wonder if you could comment on that long. So I've been through two significant integrations at VMware. The first was with NYSERA. And I was on the incoming side, not the receiving side. The next was with Heptio. I was on the receiving side, not the incoming side. And so as coming into NYSERA back in 2012, Pat was extremely supportive and asked his entire team to be very supportive of getting us integrated quickly and productive as fast as possible. We were on campus, on the VMware campus, from the NYSERA office, within days of the deal closing. That's how efficient VMware, that's the mindset VMware had coming into this. We were in a building, we were co-located with the other networking engineers and product managers within the first week and we were off to the races. That was about 120 person company. Heptio was about 100 person company. About the same efficiency. We were consolidating offices, we were bringing them over, again, mostly distributed team, but they had a center of gravity in Seattle. We had a center of gravity in Bellevue. We brought the teams over within a couple of months. And about three months in, three and a half months in, we had the team fully integrated, the organizational design done, all the tools integrated. They're all in the same systems. So it happens very quickly. Now, in an organization that's much bigger, like Pivotal, 3,000 employees, public company, takes a little bit longer to get from deal announced to deal closed because it's two public entities. And it'll take a little bit longer to do all the integration. But we're already thinking about, we know them so well and they know us so well. We already know where the potential landmines are, where the potential rough spots are. Pat prides himself and this pushes down to the rest of VMware on welcoming new team members and new groups into the company. And so we try to do that very well. We're very culturally sensitive. We optimize for the right toolkit so that we take some learnings like Cloud Health. When they came in, they had a lot of expertise around SaaS tooling and support of customers. We're adopting all of that. We're jettisoning some of our older tools in favor of some of the things that Cloud has. So you're going to implement modernization. So I want to get your thoughts on the last question for this segment. First of all, congratulations on your area. We love what you're doing. We think it's super important. We'll be covering it like a blanket this year and going forward. But Pat Gelsinger came on, was talking about 10 years and doing the riffing on theCUBE, our 10 years, covering it. We have some 10 years forward. Which waves to be on? And he highlighted on the past 10 years in the CERA acquisition as a critical moment to bring VMware into the SDDC kind of concept. Sorry about networking, obviously we know the history of their SDN. And then going forward, he says, if you're not in networking insecurity on the next wave and Kubernetes is number one, you're really going to be missing out. So we highlighted networking security and Kubernetes, but networking, it's nice here, on both sides of that 10 year spectrum, you're part of that. Why should people know that networking is the most important piece of the wave here? What's the relevance of what he's saying? Share your thoughts on that. You think about the increasing complexity of what app modernization drives into the infrastructure. You're getting smaller and smaller moving parts that need to operate together at scale in a comprehensive logical way. But at any point in time, if you're an enterprise organization, if you've got compliance requirements, auditability requirements, if you want to protect, I mean, you hear about the number of small towns that get blackmailed on a daily basis because someone's secured and encrypted their town taxpayer data. And they're victims, right? Some say cyber warfare. It is. And so when you think about, in order to help our customers get the most out of their developers, these tools that open up, I think a potential of a lot more avenues of attack, get a lot more complex. And so we think that these two have to progress hand in hand. One, we do want to help developers go as fast as possible. We want to help enterprises get the most out of those developers. And that's a big part of why we brought VMware into the VMware fair. We're bringing Pivotal into the VMware family. But at the same time, we recognize that the infrastructure has to progress. Every bit is fast. And the network is the thing that ties all these parts together. Whether it's at layer three or layer four networking today or layer seven networking, layer seven API based networking in the future. Paul, I mean, I'm not even going to bring up IOT or industrial IOT to takeovers of physical devices, whether it's a self-driving bus off a cliff or taking over towns and cities warfare. I mean, the surface area is enormous. Networks, internet connectivity, applications, all going to be cloud native anyway. We know that, right? So a lot to talk about. Thanks for coming on theCUBE, sharing your insight. Paul, I'm your senior vice president, general manager of the cloud native apps group. This is really the key instrument within VMware to take Kubernetes and the advancement of cloud 2.0 to the next level. I'm John Furrier with Dave Vellante. We'll be back after the short break.