 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 and welcome to theCUBE's coverage here in San Francisco, California for VMworld 2019. I'm John Furrier with my co-host Dave Vellante. Dave, 10 years covering VMworld since 2010. It's been quite a ride, a lot of changes. We're going to do a power panel, our format we normally do with remote guests in our Palo Alto and Boston studios in person because we're here, why not do it? Of course, Keith Townsend, CTO advisor, friend of the Cube, Cube host sometimes and Sarbeat, Joe Waltham, cloud architect, cloud expert, friends on Twitter. We're always jamming on Twitter. So we want to take it to the video. Guys, thanks for joining us on the power panel. Good to see you, Jess. Good seeing you. I hope we don't come to blow the subject. I mean, we had some passionate conversations over the past couple of months. Yes, on Twitter, yes. The activity has been at all time high. I mean, snark aside, there's real things to talk about. I mean, we're talking about VMware, a software company, staying with their roots. We know what happened in 2016. The Amazon relationship cleared the air, so to speak. Pun intended, the cloud air going goes this way and stock prices goes up to the right. Yeah, fluctuations happening but still. Financially doing well. Customers have clarity. They're an operate, they run, they target operators, not developers. We're living in a dev ops world. We talk about this all the time. Dev and ops. This is the cloud world that they want. Michael Dell was on theCUBE. Dell Technologies owns VMware. They put Pivotal on VMware. Moves are being made. Keith, how do you make sense of it? What's your take? You've been on the inside. Well, you know, VMware has a tough time. You know, Pat came in 2013. We remember it. He said, we are going to double down on virtualization. He is literally paying the cost for that hockey stick movement. VMware has had this reputation to be an operator-based company, infrastructure-based. You go into accounts. You're stuck in this IT infrastructure sales movement. VMware has done awesome over the past few years. I had to eat a little crawl and say that the move to eject Pivotal was the right thing for the stock. But for the reputation, VMware is stuck. So Pat, what, tallied up $5 billion in sales and purchases last week to get out of this motion of being stuck in the IT infrastructure realm. Will it pay off? You know, I think it's going to be a good conversation because they're going to need those Pivotal guys to push this PKS vision, this PKS and Kubernetes vision that they have. Well, they got to figure it out, but certainly it's a software world. And one of the things that's interesting we were talking about before we started is, you know, they are stuck in that operating world, but it's part of DevOps, Dev and Ops. This is the world that operates. Google's cloud shows how to do it. You got SREs, run things, and then developers just program infrastructure as code. This is the promise of this new generation. So we talk about all the time on Twitter. Developers coding away, not dealing with the infrastructure. That's the goal. Traditionally, developers never sort of mucked around with infrastructure. And gradually we are moving into, like where developers have to take care of the infrastructure themselves. The teams are like two pieces of teams. We hear that all the time, that they are responsible for running the show from beginning to the end. Operations are under them. Like it's Dev and Ops that are put together, right? But I'll speak from my own personal experience working at VM, where in the past, that from all the companies which are operations focused, that's HP, IBM, and Oracle, to certain extent, with Sun sort of portfolio and all that, in BMC and CA, those are pure companies in the operations space, right? I think VMware is one of those which values software a lot. So it's purely inside the VMware, it's purely software driven. But to the outside of what they produce, what they have produced in the past, that's for operations, right? So I think they can move that switch because of the culture. And then with pivotal acquisition, I think it will make it much easier because there's some following of the pivotal stack, if you will. The only caveat I think on that side is like, it is kind of a little bit vendor lock-in-ish, right? That is one of the fears I have. Who's not? Even Red Hat these days, you know? Yeah. Lock-in-yid. Yes. You know, post an interesting stat metadata from a blog post from Paul Fazzone announcing the pivotal acquisition. He mentioned Kubernetes 22 times. He mentioned Pivotal Kyle Foundry once. So VMware is all in on this OpenShift type movement. I think VMware is looking at the RedShift, I mean, Red OpenShift acquisition by IBM and thinking, man, I wish we didn't have this sister relationship with Pivotal so we could have went out and bought Red. Well, that's a good point about Kubernetes. I think you're right on that. And remember, we've been covering OpenStack up until a lot of year ago and they changed the name, it's not something else. But I remember when OpenShift wasn't doing well. I mean, and what really was a tipping point for them was, they had all the elements, but it was Kubernetes that really put them in a position to take advantage of what they were trying to do. And I think you're right. I think VMware sees that. Now that IBM owns Red Hat and OpenShift, you know, that's clear. But I think the vSphere deal with Project Pacific points out that they want to use Kubernetes as an abstraction layer for developers and have a developer interface to vSphere. So they get the operators with vSphere, they put Kubernetes in there and they say, hey developers, use us. Now I think that's a hedge also against Pivotal. Is it that horse doesn't come across the track on the finish line? It's definitely a hedge on containers. Just a finer point of what you were saying, there was a slight difference in the cash outlay for Red Hat, 34 billion versus the cash outlay for Pivotal was 800 million. So they picked up an $800 million asset or a $4 billion asset for 2.7 billion. 2.7 billion was the number report, we reported. You're saying that VMware put out only 800 million in cash, which, what does that mean? So they put out 800 million in cash to the existing shareholders of Pivotal, which is the minority of the shareholders. Michael Dell owns 70% of it. VMware owns 15% of it. So they take the public shareholders, get the 800 million. They get taken out. Michael Dell gets more VMware stocks and now he owns more of VMware. VMware already owns 15% of Pivotal, so for 800 million they get Pivotal. So did the VMware independent shareholders get, they get deluded, that they lose out in the deal is the question. And I think the thing that most people are missing in this conversation is that Pivotal has a army of developers. Regardless of whether they're developers focused on PCF or Kubernetes is irrelevant. VMware has a service army now that they can point towards the industry and say we have the chops to have the conversation around why you should come to us for development. So I want to come back to that, but just a good question is do the VMware shareholders get screwed? Near term the stock drops, right? Which is what happens, right? Pivotal was up 77% on the day the Dow dropped 800 points. Here's where I think it makes sense and there are some external risks. Pivotal plus Carbon Black, the combination, they shelled out 2.7 billion in cash. They're going to add a billion dollars to VMware's subscription business next year. VMware trades at 5x revenue multiple. So the shareholders in theory get back 5 billion. In year two it's going to be 3 billion that they're going to add to the subscription revenue. So in theory that's 15 billion of value add. I think that goes into the thinking. So now are people going to flock to VMware? You know, Kubernetes developers going to flock to VMware. I mean, to your point, that to me that's the value of Pivotal is they can get VMware into the developer community because where is VMware with developers? Nobody, no developers in this audience. What are your guys' thoughts on that? Yeah, I think we have to dissect the workload of applications at the enterprise level, right? There are vendor provided applications, right? From SAP, Oracles of the world, right? Those are two heavy weights in the application space and then there's a long tail of ISVs, right? And then there's homegrown applications. I think where Pivotal plays a big role is the homegrown applications. When you're shipping a lot as an ISV or within your enterprise, you're writing software, but you're shipping applications to the user base. It can be internal for partners, for customers, right? I think that's where Pivotal plays, Pivotal is Pivotal, if you ask me. That's a good bet too. One of the things we've been pulling the CISOs day for when we had reinforced, we started pulling CISOs in our network and it's interesting that they're under the gun to produce security solutions and manage the vendors and all that stuff. They are all telling us, the majority of them are telling us that they're building their own stacks internally to handle the crisis and the challenge of security, which I think is a leading indicator versus the kind of slower CIO, which loves multi-anything, multi-vendor control, like a deal with contracts. CISOs, they don't have the dogma because they can't have the dogma. They got to deliver and they're saying we're going to build a stack on one cloud and have a backup cloud. I want all my developer resources on this cloud, not fork my team and I'm going to build a stack and then I'm going to ship APIs to say to my suppliers in the RFP process, say, if you support these APIs, you can do business with us. So that's kind of a cutting edge. You can't. If you don't, you can't, you can't. And that's the new normal. We're seeing it with the jet idea with Oracle not getting playing because they're not certified the level of that Amazon is and you're going to start to see these new requirements emerging. This is a huge point. I think that's where Pivotal could really shine, not being the quote developer channel for VMware. I think it's more of really writing apps. And John, I think people are even going to question that model. Capital One is probably the poster child for that model. They actually went out and acquired a startup, a container security startup, integrated them in to their operations and they still failed. Security in the cloud is hard. I think we'll get into a multi-cloud discussion. This is one of the reasons why I'm not a big fan of multi-cloud from an architecture perspective, but from a practical challenge, security is one of the number one challenges. That's a great point on Capital One. In fact, that's a great example. In fact, I'd love to argue this point. I was on Twitter, I was heavily arguing on this point, which is, yeah, they had a breach, but that was a very low level. It's like the equivalent of an S3 bucket not being configured, right? I mean, it was so trivial of a problem, but still it takes one whole, one entry point for malware to get in, one entry point to get into any network where as IoT, this is the huge challenge. So the question there is automation. So again, that's a solvable problem with Capital One. What we don't know is what has Capital One done that we don't know that they've solved? So again, I look at that breach as pretty major, but it was a fricking misconfigured firewall. So come back to your comments on multi-cloud. I'm inferring from what you said and I'd love to get your opinion, SerbG, that multi-cloud is not an architectural strategy. I've said this, it's kind of a symptom of you got multiple vendors playing, but so can multi-cloud become, because certainly VMware, IBM Red Hat, Google with Anthos, maybe a little bit less Microsoft, but those three, Cisco, Cisco and certainly Dell, all talking about multi-cloud is the clear strategy. That's where CIOs are going. You're not buying it. Will it ever become a clear strategy from an architectural standpoint? Multi-cloud is the NSX, and I don't mean NSX and VMware NSX, it's the Acra NSX of Enterprise IT. The idea of owning the NSX is great. It brings me into the showroom, but I am going to buy, I'm going to go over to the Honda side or I'm going to go buy the MDX or something more reasonable. Multi-cloud, the idea sure is possible. It's possible for me to own a NSX sports car, but it's more practical for me to be able to shop around. I can go to Google via Cloud Simple, I can go to Cloud via Cloud Simple to Azure, GCP or I can go VMC. I have options to where I land, but to say that I'm going to operate across all three, that's the NSX. Yeah, if you have an NSX sports car, by the way, to use the analogy in my mind is great one. The roads aren't open yet. Yeah. So, okay, great. Well, already go to Germany and you're in California. So, you know, the transport, again, the applications, you could build tech for good applications all you want, and they're talking about tech for good here, but if it's unsecure, those apps are going to create more entry points. Again, for cyber threats, for malware, so again, the security equation, you're right, it's super important, and they don't have it. What are your thoughts on that? I think on multi-cloud, when you are going to use multi-cloud, you're going to expand the threat surface if you want, right, because you're putting stuff at different places. But I don't think, as you said, Dave, the multi-cloud is not more architectural choice, it's more like a risk mitigation strategy from the vendor point of view. Like Amazon, who they don't compete with, or who they won't compete with in the future, we don't know, right? You mean with an industry? Yeah, with an industry, right? Autos or healthcare. Yeah, they will. They are talking about that, right? So if you put all your bets on that, or Azure, let's say even Azure, right, they are not in that kind of category, but still, if you go with one vendor and ask Mission Critical, and something happens, like government breaks them up, or they go under sideways, whatever, right? And then your business is stuck with them. And another thing is that the whole US business, if you think about a global scale, like where US stands and all that stuff, and even global companies are using these our cloud providers based in the US, these companies are becoming, like they're becoming too big to fail, right? If you put everything on one company, right, and then something happens, like, will we bail them out, right? Will the government bail them out? Like stuff like banks became too big to fail, I think, I think from that point of view, bigger companies will shift to multi-cloud to hedge, right? Mitigation, yeah, that's fair. I believe in multi-cloud in one definition only, I think for now, the nirvana of having dynamic workload management across utility bases, that's fantasy, I think you could probably engineer it, but there might not be a workload for that, or maybe data analytics I can see moving around as a use case, certainly, but I think the reality is that all companies will probably have multiple clouds clearly, like if you're going to run Office 365, that's going to be on Azure, and you're an Azure customer, okay? You have Azure Cloud. If you're building your security stack on Amazon and got a development team, you're on Amazon. You got two clouds, they had Google in there, big tables, great for certain things, you know, BigQuery, you got Google. You might even have Alibaba if you're operating in China, so again, you're going to have multiple clouds. The question is, the workloads define the cloud selection, so I've been on this thing, like if you got a workload, an app, that app should choose its best infrastructure possible, that maximizes what the outcome is. And John, I think what people fail will realize that users, when you give them a set of tools, they're going to do what users do, which is be productive. Just like users went out and took credit cards, swiped it and got Amazon, if in your environment you have Amazon, you have GCP, you have Azure, you have Salesforce, old 365, and a user has access to all five platforms, whether or not you built a multi-cloud application, a user's going to find a way to get their work done with all five and you're going to have multi-cloud fallout, because users will build data sets and workloads across that, even if IT isn't the one that designed it. All right guys, final question on the power panel, Dave, I want to include this for you two and I'll weigh in as well. Take a minute to share what your thinking right now is on the industry, what's taking up your attention, what's dominating your Twitter sphere right now, what's the B in your bonnet, what's a hot button issue that you're kicking the tires on learning about or promoting, so everybody will start with you, what's on top of mind for you these days? I think we talk about multi-cloud all the time, that's the in discussions all the time and then blockchain is another slow-moving train, if you all, I think it's arriving now and we will see some solutions coming down the pike from different platformization of the blockchain, if you all, that's happening. I think those are the two actually things I keep my eyes on and how developers kind of move which side they take and how AWS dominance is challenged by Microsoft and Google. There's one thing I usually talk about in Twitter sphere is that there's a data gravity and there's a skills gravity, right? So people who are getting trained on Amazon, they will tend to stay with that because that's, at the end of the day, it's people using technology, right? So moving from one to another is a challenge. Who are our throws in a lot of education at the developers and operators, they will win. Keith, what are you getting excited about? So CTO Advisor has this theory about the data framework or data infrastructure. Multi-cloud is the conversation about workloads going here, they're irrelevant, it's all about the data. How do I have a consistent data policy, data protection policy, data management policy across SaaS, O365, Salesforce Workday, my IaaS providers, my past providers and on-prem. How do I move that data and make sure another data management backup company won best of VMworld this year. This is like the third or fourth year in a reason. It's not because of backup, it's because CIOs, CDOs are concerned about this data challenge and as much as we want to talk about multi-cloud, I think the industry will discover the problem isn't in Kubernetes or solution isn't in Kubernetes. It's going to be one of these cool startups or one of these legacy vendors such as NetApp Dell EMC that solves that data management layer. All right, great stuff. My hot button's Cloud 2.0 as everyone knows. I think there's new requirements that are coming out and what got my attention is this enterprise action in VMware, the CIA deal on Amazon, the JET ideal, show that there are new requirements that our customers are driving that the vendors don't have and that's a function that cloud providers are going to provide and I think that's the canary in the coal mine. I got to chime in. I got to chime in. Sorry, Leonard, but it's the combination and what excites me is the combination of data plus machine intelligence and cloud scale. A new scenario of disruption moving beyond a remote set of cloud services to a ubiquitous set of digital services powered by data that are going to disrupt every industry. That's what I get excited about. Guys, great power panel. We'll pick this up online. We'll actually get the power panels working out of our Palo Alto studio. If you haven't seen the power panels, check them out, search power panel, the cube on Google. You'll see the videos. We talk about an issue. We get experts. It's an editorial product. We'll see more of that online. More coverage here at VMworld 2019 after this short break.