 Live from the Mendeley Bay Convention Center in Las Vegas. It's theCUBE, covering VMworld 2016. Brought to you by VMware and its ecosystem sponsors. Now, here are your hosts, John Furrier and Stu Miniman. Hello everyone, welcome to 2016 VMworld. This is SiliconANGLE Media's theCUBE. It's our flagship program. We go out to the events and extract the signal from the noise. I'm John Furrier, my co-host, Stu Miniman on the anchor set here, on a two-set VMworld second year in a row where theCUBE has gotten so large. We now have two large sets in the broadcast booth here live in Las Vegas for the VMworld 2016. Stu Miniman and I are going to be breaking down on the analysis, kicking off day one. We'll recap the news, the keynotes, and of course we have a little big lineup of guests. Starting with Michael Dell on 11. It's like standard time today here on theCUBE. Stu, this is our seventh year of VMworld when theCUBE started in 2010. VMworld was the second show we've done. We've been here ever since. We've seen VMware transform as a company owned by EMC, now owned by Dell Technologies. We're living in a post-EMC federation world. We're now living in a Dell Technologies world with respect to VMware. At the same time, VMware is navigating the legacy of the hypervisor, trying to find a position that takes advantage of their strengths and to compete in a going forward, all-cloud computing world, or hybrid cloud as VMware puts it. Let's do this. This is really going to be a seminal moment for VMware because this is where they have to make their move, okay? Post-Federation, long lived the federation. The federation is dead, long lived the federation with Michael Dell Technologies. But the world's changed. Microsoft Azure's got exploding onto the scene. Amazon at a huge run rate, exploding, taking over the world there. Obviously, public cloud's great. Still an on-premise. Pat Gelsinger said by 2021, only 50% of the workloads will be cloud. Still a lot more work to be done. VMware has to make a move. Their ecosystem, some have been said, it's been kind of dormant, if you will, or kind of quiet since for a while. But now we're hearing the word ecosystem. Stu, your thoughts. VMware at a crossroads. What's your position on this? Yes, first of all, John, I'm super excited to be here. This show always holds a special place in my heart. I've been watching VMware, I've been working with them since back in 2002 when they were a really small company. And look at this show. I mean, it's our seventh year here. The Cube has grown a lot. It's always lots of fun to do with you and Dave. Filming some big shoes here. Dave Vellante, back of the ranch, has another show this week. But VMware's gone through a lot of changes. The industry's gone through a lot of changes. And some things that I liked in the keynote this morning. Pack Alster laid out, five years from now, public cloud could be the majority of workloads. Remember back to when we were first coming in 2010, it was like, well really, the majority of workloads are now going on in a virtualized environment. So that was only seven years ago. When you look at, things don't change overnight, but in a couple of years, things change really fast. So VMware has to make the moves now. We've been critical of their cloud strategy that they've done before. There's certain parts of VMware's business that are doing really well in other areas that we think they need to have a lot of work. And we've got lots of interviews this week to dig into it, so super excited. In 2010, Dave Vellante and I were chatting when we saw Paul Moritz lay out his vision. At that time, that was the unveiling of the VMware's future roadmap. And Paul Moritz got it right, but not necessarily right for VMware. He got it right for the vision of the industry. But if you look at 2010, what Moritz laid out at that time, it's all pretty much played out. And Dave and I were talking at that time, we're calling it the software mainframe. You had three levels of the stack, you had all kinds of apps at the top, you had basically DevOps in the middle, and you had converged infrastructure and software-defined infrastructure at the bottom, although we didn't call it that then. But if you look at today, okay, that's evolved. Since then, Stu, the world really has moved in that direction. Mark Andrewsson wrote the seminal post on the Wall Street Journal, software eating the world. Now we see that happening, software power in the world, we got IoT right on the corner. In your opinion, what's VMware need to do now? Because at that time in 2010, the ecosystem was robust, exploding. You had a nice layer that VMware had with the hypervisor, but now since the spin out of Pivotal and all the assets at the top of the stack, you had Pat coming in trying to create this hard and top, the ecosystem kind of felt a bit, I don't know, lost, if you will? What's your thoughts? So John, if software is eating the world, where are the software assets? VMware is majority owned by EMC. EMC is being bought by Dell. Dell is primarily a PC and server manufacturer. So while there are efficiencies to be gained by pulling together the supply chain and having tight ties with the server piece, where is the software innovation coming? Cloud has been this big giant question for VMware. For a couple of years, it was the vCloud Air environment. No mention of vCloud Air. The vCloud Air network now is service providers and how they're moving their environment. It was funny, watching the Twitter stream on the keynote this morning, everybody's going all nuts because they can't get their premise differentiated from premises, which is your location. But those semantics aside, when I talk to customers and when I talk to channel partners, VMware does great in the data center, but if I'm going to public cloud, if I'm going to hosted providers, VMware's not as sticky there. So how are they going to live in this multi-cloud world? They've got some software solutions that have come out. They have a renewed push, but every year, it's a rename of the suite from VMware. They're re-tinkering. Some of the management chains has shifted up there. So it is not a winning strategy yet, but I was talking to Chad Sackage this morning from EMC and he said, if EMC and some of the other companies, well, you'll fail, you'll fail, you'll fail, and eventually you'll win. So VMware's coming at it again with another swing as to how they're going to successful with the cloud. And for me, it's that transition of the channel partners that they've been using traditionally with some of the new ones that get it, whether that be service providers, people that are working with multi-cloud environments like Azure and AWS, because the other thing, we're going to talk to Michael Dell at Dell World. Who was Michael Dell sitting on stage with? It was Satya Nadella, the CEO of Microsoft, his biggest partner. So how does VMware and Microsoft, who have been enemies since day one, how does that fit in this ecosystem? I think the new reality is to his good point is that VMware has realized through the failure of their cloud strategy, at that time, groping, if you will, to figure out if they could be a major player in the cloud. At that time, Azure was struggling before Satya Nadella became CEO. So it looked like a good shot off the tee, middle of the fairway, VMware will have a cloud paddle, create a conversion structure. But here's what happened. They just didn't have the product leadership at the time. And at the same time, the market was shifting, shifting big time. So now I think they see a clear line of sight on what their plan is. And that to me seems to operationally the cloud. And Pat kind of talked about this for multiple years now to give Pat a lot of credit. He's been always saying hybrid cloud, it's not a halfway house or a way station. It is the destination for management. So to me, the big takeaway as I walk around the hallways here is that it's buzzing around operation, operationalizing the cloud. So hybrid cloud, cloud foundation, cross cloud, inter-clouding, whatever they call it. VMware is going after that operational aspect. And one notable point during the keynote, people were huddled all on the stations around the cameras. And they're showing essentially machine code. Basically their geeks, this is a geek shows too. They are targeting their sweet spot of their core business, going back to the geeks in the data center who want to go operationally to the cloud and manage clouds. So to me, I think VMware right now seems to see the line of sight, your thoughts. Yeah, so John, really interesting points there. If you look at kind of the ecosystem, one of the things Michael Dell said is it's critical for VMware to be open, to be successful, and we'll continue that going forward. That doesn't necessarily mean open source. And the question we've had since Pat came in as CEO four years ago is can they follow the Intel model? Pat of course came from Intel to can they expand what functionality they have without kind of ticking off the ecosystem and trying to take too much of the ecosystem dollars there. So when they get into backup, when they get into some of these software solutions, there are certain ecosystem partners that get less money and are going to look at other solutions. Big examples are when Veeam pivoted away from just doing VMware and Embrace Microsoft, that was a big ripple, VMware kind of pushed back. Nutanix, it's a real struggle between Nutanix and VMware. Nutanix now has a KVM based hypervisor in their Acropolis platform, but most of their customers are still using VMware. We'll be talking to some of the Nutanix people, but it's that give and take between VMware, wants to own a lot of pieces and control it, yet we're going to be open and give you a choice as long as VMware is at the center of it. Didn't hear a lot about Docker containers in this show yet. I'm not sure if we're going to hear any, but it brings back to the point of this ecosystem. I'm calling it the ecosystem 2.0 for VMware. Big announcement here with IBM Cloud. So VMware is certainly going into bed with IBM. I think that's a really huge move. So this kind of brings up the conversation of what is the VMware ecosystem 2.0 look like? Traditionally it was a lot of storage and server vendors taking advantage of that shim layer in the stack where they could enable virtualization amongst the partners. But as we go to the cloud, does the IBM cloud announcements do, tease out this notion of ecosystem 2.0? And what does it mean? I mean, as you're going to be right around the corner, you mentioned Satya Nutella. This is the roots of VMware. This is good for them. Yeah, absolutely, John. Right, IBM up on stage. I'm sure the EMC people sitting there aren't thrilled to see IBM there. Of course, VirtuaStream is going to be supported. There's lots of other solutions that are supported, but who's going to be making money? Who are the key partners going to be? And it's actually, John, our last guest of the week, I think, is Ajay Patel, who's the head of the cloud group. I know he's working closely with a lot of the service providers. I hear good things, but it's a little bit of a fight inside. As always, there's that transition from who brought us money and how we went to market to the new ways and the emerging ways going forward. Speaking of new ways going forward, I thought it was interesting. Pat Gelsinger started off in kind of his professorial mode this morning talking about digital transformation. And of course, it's something that's more than just a buzzword. Our head of research, Peter Burris, who's here this week, been talking a lot about digital transformation for quite a number of years. So how is VMware helping customers move forward? And it's got to be much more than just that hypervisor layer because it's much more than that. And that's not the most important thing for customers going forward. You're watching VMworld 2016. If you want to tweet at us, at Furrier, F-U-R-R-I-E-R, Stu is at Stu, S-T-U, three-letter Twitter handle, which is a story in and of himself. Or also tweet at theCube or join crowdchat.net slash VMworld and join the conversation. Ask us questions. We've got Michael Dell on 11 o'clock. Dave Vellante is chiming in. Hey, Dave, good to see you out there on Twitter. He says, you know, Michael Dell says it's critical that VMware remains open. It doesn't mean open source, it means choice. Again, Dave brings up this open source conversation. Open source is a critical component of the innovation and if software is eating the world and now software powering the world with IoT, what does the future of the software-defined data center look like? What is a software-defined data center, Stu? This brings up a lot of good questions. Is it going to be proprietary software? Is it going to be open source? A blend, what does choice mean in an open source world? Yeah, in the role the data center becomes less important for most users. It's not, you know, we've got a lot of storage companies here. Storage just sitting there isn't where the value is. It's things like IoT and analytics and ways that I can leverage my data, get more value from my data. I expect to hear a lot of discussion about analytics at this show. You know, you mentioned kind of the containers and dockerization. It seems that VMware's kind of, you know, lowered some of their messaging on this. It's in there. They are doing a lot of work. I know Docker has a presence here at the show, but it's not nearly as much of a buzz as we had last year. But there is a good presence, Sean, of kind of the cloud-native activity. Developers, we've got a couple of segments we're going to be doing here at the show, digging into that, because many of the people that went from kind of an infrastructure admin to a virtualization admin, now they're trying to figure out how do they either go down that developer path, maybe down that cloud architect path. What is the future for all of those people that have for so long gotten their certifications and managed infrastructure? One of the things I'm going to ask Pat Gelsinger, certainly Dell might not have some visibility as the level of Gelsinger and the VMware people is, what does cloud ops mean to you? Because right now it seems that VMware's targeting the operational people within the enterprise for this hybrid cloud to the public cloud. So that's going to be one area I think that's going to be important. I think it's clear for VMware, the personas that they're targeting is due are operational people because the world is shifting fast. There is a mention, of course, in the hype cycle, IoT, Internet of Things is booming. The comment by Pat Gelsinger, he said, quote, but by 2019, more machines will be enabling devices than humans connected to the internet. So that means it's going to be a crossover, very similar to what happened with virtualization in the servers. I think it was 2012, VMworld, that they talked about server virtualization, surpassed actual physical machines. So interesting dynamic. With IoT right around the corner, with the mobile apps booming, this is a huge deal for VMware. So the ecosystem kind of ties into that. Your thoughts on IoT, how it fits in here. Is it hype? They got any reality? They got any products? Is it just kind of their positioning? So we have a number of trends here, John, that can potentially be very disruptive to VMware. We talked about public cloud. IoT is another one. It's where do those applications live? Do they live for a shorter time? It's about passing data much faster. And I haven't dug into VMware's play in IoT, but there's lots of other companies that are partnering with IBM. Of course, we hear companies like Microsoft and Amazon pushing hard on IoT, but there's many waves here, and server virtualization is not the critical component. It might be in there, it might be a piece of what's going on, but this is where there's the potential for some of those disruptions. Because VMware has been really dominant for a long time in this space, and it's not, we spent years talking about, oh, is it Hyper-V or KVM or VMware? And that's not the discussion anymore. It's those waves of IoT and just moving my application. SaaS, when we look at SaaS, it's two thirds of public cloud according to our data. And many of those customers aren't thinking as much about the underlying infrastructure underneath it. You talked about Pivotal and Cloud Foundry. What layer of the stack do I care about, and what's kind of beneath what I'm doing? And if VMware can't get their product set up market enough, they can become irrelevant kind of fast. Stu, I want to use the last couple of minutes we have here to talk about the role of VMware in the future. Obviously, we speculate on theCUBE all the time. Will Michael Dell spin out VMware? I'll see the Pat Gelsinger kind of virtuous stream dynamic around. We want to kind of take our own path. It's always been VMware's DNA is to buck the system and the Federation. The Federation is no longer part of the system. Now it's Dell Technologies. But also the global realities of today's marketplace with China, for instance, not yet, that deal is not yet approved. Although news reports had at Rob Hope at SiliconANGLE teased out the fact that that is not approved, and yet that there's a global reality because there's Chinese competitors out there who might want to see this combination slow down because Dell Technologies might be too powerful. So, and of course you got HP Enterprises around the corners too. Global realities, competition. What is the future role of VMware? Yeah, we boiled that all down into a couple of minutes. No problem, John. So great, you know, I'll default back. We've taken a lot of this context on Wikibon. You know, how are the public cloud trends changing? Global economics, I mean, from what we hear, there's a lot of uncertainty there. We saw what happened in VMware stock with the whole Dell Technologies thing. It plummeted. Boy, did that cause some concern. Some people left, senior people left in VMware. Some of them, we hear Martín Casado, and gosh, the new number two. But some of these guys are still involved on a pretty regular basis. So, you know. They need the product chops, dude. They got to compete at the product level. If they want to win the developers in the operations side of the business, they got to have the product chops, do they? So on some of the day-to-day stuff that's got, you know, Michael Dell sees kind of conversion, hyperconverge is one of the big areas here. According to our research, Dell's actually in a really good position and VMware is, you know, closely in the packets. Nutanix, VMware, EMC, Scale.io, you know, all, you know, at the top of the leaderboard. There, but it's still very early in those days. And just like kind of public cloud, it's going to be over the next five years that some of these things really shake out. So, you know, where does Dell and VMware put their technology to be able to help customers through that digital transformation and move forward? There's, you know, lots of challenges here and it's not something we can boil down on. So I got a comment on Twitter. I said, VMware is becoming an arms dealer to the cloud providers. Good strategy about time. Comment back was three years too late. I'm not sure I believe in that. I think that right now it's still early on. I think hybrid cloud is just basically a gateway drug to a fully integrated end-to-end cloud and on-prem. Other companies like Oracle, for instance, look at it and see us saying, hey, we'll do Oracle on Oracle and to end, you look at IBM a little more open. But this is VMware's position that they want to be open. So John, just to interject there, the problem I have is VMware is they, their hybrid solution is mostly in people's data centers or maybe in some hosting providers. Their public cloud offering isn't really there. They're propping up IBM and trying to push hard there. As you know, IBM is a player in the space and if IBM can work there, that that's in their best interest. But IBM has a number of partnerships. Can VMware become relevant with Amazon, Microsoft, Google of the world? Dell Technologies thinks that they can push into some of these spaces, either be a supplier or how they work in some of these environments. But I still want to see how VMware and Dell together, how they partner with some of those public cloud environments or five years from now, are we going to find that VMware's just shut out of a majority of the market? You know, Dave and I, Dave Vellante, and I always talk about this industry as being like NASCAR, everyone's in the pack, someone slingshots at the curb, they go, you know, they fly over the wall. But the reality is, is that you're looking at the vendors right now, saying to themselves, okay, where do I position myself vis-a-vis the competition? If you look at what VMware's doing, they have a good shot at winning the operational aspect of it. And with their ecosystem now going to go to the next level of the cloud, they can manage these clouds. And I made a comment two years ago at an open stack with Lou Tucker, legend in the industry now at Cisco, talking about inter-clouding and making the premise that inter-networking, which became out of the networking business from the TCP IP days, became a real growth area. So if Gelsinger and team have it right, inter-clouding, if you will, they call cross-cloud, can be a huge opportunity for enterprises, your thoughts. Yeah, so John, lots of areas, it's one of the key areas I want to dig into this week. We've got lots of good guests. We're bringing some guest hosts this week, too. Quick shout-out for those people that watched our program. We brought in some of the key people that really understand this community, understand a lot of this technology. John Troyer, Mark Farley, and Keith Townsend. So we've got two sets, three days, so many pieces here. So I want to say some of this for the raps, John. And I know we've got Michael Dell coming on shortly. And when we scouring the landscape at night, after the big parties going on, we'll hear the hallway conversations. Of course, again, like Stu mentioned, we've got new cube hosts reaching into the community and getting some of the best commentators out there. And like Stu mentioned, it can be great. Of course, two sets. Michael Dell, Pat Gelsinger, all the VMware top dogs are coming on. And of course, customers. And we're going to have a great time here at VMworld. Three days of live wall-to-wall coverage. This is SiliconANGLE, Meetings to Cube. We'll be right back with more live coverage. You're watching theCUBE.