 Live from San Francisco, California, it's the Cube at VMworld 2014 brought to you by VMware, Cisco, EMC, HP, and Nutanix. Now here are your hosts, John Furrier and Dave Vellante. Welcome back everyone, we're here live in San Francisco, California for VMworld 2014. This is the wrap up of day three, wall-to-wall coverage, I'm John Furrier with Silicon Angle and Dave Vellante, my co-host and co-anchor here, Stu Miniman, been filling in, getting the data, doing some interviews, I'm Martín Casayaga, I just posted yourself by the way up on Twitter with Martín. Guys, wrap up, really great event Dave, I've got to say our fifth year at VMworld. Operations have been smooth, it's really been a great workflow, great design all around us. More importantly, the guests were phenomenal this year, people brought their A-game, delivered great value, great data to the audience, great perspectives, great commentary, little controversy. All the senior executives, CEOs, we had the VC's on, startups, it was awesome. My take quickly, VMware's in transition on an offensive move, they have a great management team with the Rior, Sanjay Poonan was just on, talking about a Pat Gelsinger's highlighting it. Management team, great messaging, they're staying the course, still some work to do, but definitely an offensive transition. What's your take Dave? Well I agree, I think VMware is in transition and I think there's a conventional wisdom out there that says that this company is under fire, the hypervisor is going to commoditize, they've got to move up the stack, they're expensive, etc., but VMware's response is to go on the offensive. This company is an execution machine, not unlike its majority owner. They execute, they're delivering to plan, they set out a vision, they bring in great talent. We're seeing the three legs of their stool, software defined data center, end user computing and the cloud come together now. Of those three, the big work still is in the cloud. I think they did a great job of doing a group hug with Docker, sort of co-opting the whole open stack criticism, which I think is tactically fine, it puts a little water on that flame, but the big gap still is Amazon web services, but we just heard from Sanjay Poonan about the impact of AirWatch. I'm not sure it's the LeBron James, but maybe it's the Ray Allen when the Celtics got the big three, that's the piece that was missing, it could be Bosch, it's part of that big three. It's not a franchise player, but it's a very strong piece of the puzzle, so you're starting to see 30 to 50% growth there, that fly will affect, as I say, the big news here was hyper-convergence. We called it, when Pat Gelsinger took over, he said hardware and software are coming together. To me, Stu, VMware is engineering an Oracle-like hardware software together with an ecosystem. The difference is, Oracle's all red stack, basically kick out the ecosystem all our own, VMware's doing that in an ecosystem style, nibbling into the ecosystem, but still with a lot of leverage. Oh, before, I want to just jump in there, do you notice that EMC were old, Bill McDermott was on the big screen with Joe Tucci, Sanjay Poonan, SAP deal, Oracle? Very clearly, the EMC is cozying up and has been cozying up to SAP, a lot of its internal systems, it's spending more internal money on SAP, why would it line Larry's pockets any more than they ever are? It's open though, the open choice is, I mean, VMware is playing the open card. Open is in the eye of the beholder, I would say. On the spectrum of open, you wouldn't say that VMware is far to the left, as say Hortonworks is. You would have them more to the right. You got Hortonworks and you got Oracle, I wouldn't even put VMware down the center, I would put them right of center in terms of openness. I don't know, Stu, if you agree with that. So Dave, first of all, to your comment, convergence has been huge of the show. When Wikibon put out the first industry forecast on converged infrastructure two years ago, and we predicted that by 2017, about two-thirds of infrastructure in the data center will be bought in some kind of converge, people thought we were way too aggressive. If you look at this show, we're probably a little bit low. It's happening fast. Everybody involved. Secondly, everybody seems to think, well, VMware's just going to co-op the entire stack, but they're doing a relatively good job of maintaining their partnership with their ecosystem and it's co-opetition. I talked to Nutanix and VDI with VMware. VMware still needs Nutanix in certain pieces. They're making partnerships with Nixenta, they're still reaching out to lots of pieces because at the end of the day, VMware's not going to be a hardware company. They're a software company. They need the hardware. Sure, they're trying to pull value out of it. As my premise has always been, they need to be the next Intel, Intel's sucked functionality for the last 10, 15 years into the stack and Dave, I'd agree on openness. The Federation talks about choice and of course you can have any choice you want as long as it's in their portfolio. Let's do the other validation point is Nutanix raised $140 million and just go looking at the numbers here. It's a five-year-old company. We've been doing the cube for five years. We've raised $13 million, $25 million, $33 million, $101 million, so $13 million in 2010, $25 million in 2011, $33 million in 2012, $101 million just this past December and now another $140 million. That's a hyper-converged solution, total validation. Yeah, John, huge dollars going in converge. Let's not forget VCE, the company that really drove a lot of this. This run right I heard was $1.8 billion, NetApp, Flexpods, Dillon and Well. Cisco still owns a large piece of the converge market. I think in some way VMware is trying to pull some of that away from Cisco. There definitely is that give and take between Cisco and VMware. One of the standout quotes for me is I interviewed a service provider this week and he said I'm a VMware shop and I'm Cisco shop and I'm not going to really consider SDN until they stop throwing stones at each other. Now I got to ask you, Stu, what do you make of Pat's comment on the keynote of, quote, we love Cisco gear. I saw that as a clear attempt to deposition through faint praise a major potential competitor, slash partner, but if you're Cisco, how do you feel about that? Yeah, well Dave, of course, by all VMware software and you can absolutely run any hardware and there's lots of Cisco hardware out there. So what's Cisco's response to that? They're not going to sit still, right? So what's VMware said, bring it on, what's the landscape look like? Where's that all going? Is that, this is no mean settled, right? No, absolutely, no mean settled. ACI is the attack from Cisco, but ACI is still early. Is it shipping? There's kind of pieces of it that are shipping and it's not completely done. What about NSX? As opposed to NSX, you know, Martin really brought some proof points. Customers are adopting it. I think it was 150 customers that currently have NSX is what Martin said. Yeah, it was a million dollar run rate, the dam broke six months, not eight months ago. You know, Martin's on a P&L though, he's going to be pimping up his business, but you know. You know, those run rate numbers are funky, right? Yeah. Because sometimes they're really lumpy. Well, remember Extreme I.O., right? You know what I'm saying? They have a one big deal and all of a sudden it's... Or backlawed from preferred customers on the data. Yeah, and who knows how they're counting it, you know, it's easy to play those types of games. We don't know yet. No, no, I asked him that question, I said Extreme I.O. had the same thing and directed availability, they were basically more revenue than pure. I'm just on direct availability. So he said no, there is a product market that is not just one-off customers. Right. Okay. All right, guys. Well, any other commentary, Dave, you want to share? Dave, three, wrapping things up. Well, I think that it's interesting to note the conversation with practitioners. Let's talk about that for a second. Five years ago, it was all about how virtualized are you? Where are you? What's your journey look like? What percent of virtualized are you? Now you're hearing a lot more discussion about orchestration, about automation, connecting into a multi-hyperenvironment. The whole docker thing, the container thing is really interesting, you know, a lot more around mobile. I think the transition that these guys are making in terms of end-user computing within the customer base is a lot more substantive than it was five years ago. So that to me is really the, watching the progress has been pretty astounding. I think the developer angle is interesting, Dave, this in-house developer movement. And Sanjay said, you know, we're looking back and forth, the IT of consumerization is happening. And I think the developer angle is very much in play. The in-house developers are taking place. You're seeing that absentric view dictating to the infrastructure. And that's the big idea. So I'm excited. That's a great wrap, guys. Great cube. This trip. Congratulations to all the guys here. Thanks to the ranch, Jeff, and the guys, Greg, good job. Thanks for watching. This is a wrap of the cube here in San Francisco right after this short break. We'll be back. Keep watching. Tableau conference, a lot of action. Look for the cube in Silicon Valley, guys. Thanks so much for hosting. Thank you, John. Appreciate it. That's a wrap from VMworld 2014. Thanks for watching.