 I'm John Furrier here with Silicon Angle. We're in the Wikibon headquarters office in Malboro, Massachusetts. And this is the CUBE team doing a preview on VMworld, Dave Vellante, Stu Minin, Brian Graceley here to break down VMworld 2015. Of course, the CUBE will be there for the sixth year in Moscone North for more details later. But guys, welcome to the CUBE conversation. Scythe, my first CUBE conversation in the Malboro studio here in Massachusetts. Dave, it's your home turf. John, welcome, yeah. You feel a little bit off base, you know? Well, I'm glad you're comfortable with the mic. He's a close guy, right? Back at home. All right, so a lot of big stuff to talk about VMworld. The news, honestly, Recode broke the story. We had a follow-up with the Wikibon analysts around the EMC dynamic. VMworld's right around the corner. We have a huge CUBE production. What do you guys expect to see at VMworld? Dave, start with you. Well, you know, I go back, John, to our first VMworld with the CUBE, which was 2010, because I was attending VMworld a couple years before that. I think we're seeing a VMware in the midst of a massive transition. If you go roll it back to the beginning of the decade, Todd Nielsen was the president. Paul Moritz was the CEO. Nielsen used to talk about the ecosystem and the leverage of the ecosystem for every dollar spent on a VMware license. 15 was spent in the ecosystem. You don't hear VMware talking about that anymore, and they're grabbing different pieces of the stack. I remember in a side conversation with Moritz at a financial analyst meeting one time, he talked about building the software mainframe. And I said, wow, that's a really ambitious plan. That's going to put you at odds with this company. That company goes, yeah, we're at war with everybody. And I think what we've seen is sort of a navigation through that ecosystem play where we had all that leverage and now VMware grabbing networking, grabbing storage. You know, at the time it was moving up the stack. As you remember with Zimra trying to, you know, get into the application space. They spun that off to Pivotal. Now with all this Federation talk coming back together, maybe EMC's thinking about taking a more Oracle-like approach, but so it's going to be an interesting sort of undercurrent, I think, to the whole VM world. Yeah, Dave, you brought up some great points. Back in 2010 we used to say, is VMware going to be the next Microsoft to really move up the stack and build that whole application portfolio? Of course they've divested themselves of most of it, Pivotal took a bunch of it. Now when they put Pat Gelsinger in charge, I said, well, could VMware really be the next Intel? Because what has Intel done over the last decade? It's pulled a lot of functionality into the chipset, but it hasn't pushed away their partners. And as you said, VMware's really built on both the technology and channel ecosystem partners, but VMware's definitely had a little bit of struggle with expanding its storage, little bit of pushback there from some of the ecosystem. Networking is moving along quite a bit and cloud with vCloud Air, how does VMware help grow that ecosystem? They don't use the number anymore, Dave, about how many dollars they're driving through the ecosystem. It's really been about how VMware can sustain growth and keep growing. Because, I mean, John, you've seen the change in Palo Alto is what's happened to, I remember in VMware it was a 100-person company, and now they're over 12,000, which is what EMC was 15 years ago. I was having a conversation online with Frank Slutman, who was at Data Domain, sold to EMC, and then he's now CEO of ServiceNow. And what he was saying was that VMware would be really nothing without EMC. So the Federation model's working, but the question always is, I mean, the other way around it was VMware's nothing without EMC. No, I'm sorry, VMware would not be what the size it is today without EMC. Yeah, and I think, Dave, you break up, it's been an interesting dynamic because how important is the VMware asset to where EMC is today in the marketplace, but I think we've had lots of discussions about this. If EMC hadn't bought VMware, what if Symantec had bought them? What if they'd been the standalone? Would they have had the funding and been able to stand alone? My thesis is really good. What if Cisco had bought them? Yeah, yeah, yeah. I mean, how is it going on? So why don't Pope Brian come up from North Carolina here? It's a little bit of background with both VMware and Cisco. What's your take? To me, the biggest thing is I don't know who they speak to anymore. They speak to so many different groups. I mean, they're going to speak to infrastructure. They used to be all infrastructure. It was nothing but guys doer, server people and storage people. Now it's an open source crowd with all the stuff they're doing around Docker. It's public cloud. They're doing a little bit around applications. They're doing security. They're doing networking. That's really hard to communicate to somebody. What should I focus on if I work with VMware? And I think that's the thing that Gelsinger's got to figure out is how does he communicate to people that if he's building the software mainframe, if he's building the software data center, like there are people that do things outside of that, should they be part of the VMware community? And that's complicated. So guys, that brings, that's Pivots to my next question. Where I wanted you guys to drill down on and evaluate. And this comes back down to kind of just competitive strategy meets industry transformation. VMware grew, some will say is it a focus issue that they have all these moving parts? Or is it part of a coherent strategy to be the platform? And if the ecosystem play is not playing out or they're not sharing numbers, is that a pretext to something else meaning is there platform wars going on? Are people going in alone? You got Cisco, you know, you got EMC in VMware. You got Pivotal out there in the Federation. Is it a platform war out there? Because you could argue with VMware, they're not focused, all these things they're talking to, different stakeholders, or is it just a platform play? Well, I think it is a platform war. And I think if you look back at 2010, it was like, okay, VMware had won the platform war and then OpenStack comes out and then AWS gets all this momentum, Microsoft gets its act together. This thing, Docker comes out of the blue with containers and now it's almost like jump ball again and you have big players like HP and IBM saying, we're going to put our muscle behind OpenStack, it just levels the playing field, doesn't it? Let's do what you're taking, ecosystem robust or is there a little cold war going on right now? Yeah, as Dave points out, VMware's fighting a multi-front war here. And if OpenStack is where private cloud's going to be, wait, wait, wait, private cloud, that's my data center, that's where VMware has lived today in so much of the OpenStack ecosystem, built a value proposition around getting people off of that VMware license and leveraging open source a lot more. So when you talk to some of the big companies like IBM and HP and what they're doing with OpenStack, it's not a VMware integrated OpenStack, it's their version of OpenStack and what they're doing and VMware's not in that discussion. So I said when VMware pushed for their OpenStack solution, it's really defensive moves so that the customers come and say, hey, I'm looking at OpenStack, but I'm happy with my vSphere. I mean, most customers are, can you help me out in VMware? Absolutely, walk down this path with us, we'll be happy to help you there, but they're not the leaders in the OpenStack community, they're not a lot of the project leads out there. They've, over the last year or so, really started to push back in that environment and I expect to hear plenty about OpenStack at VMworld this year, but today VMware is kind of struggling on the track to see where they fit into that OpenStack. So what about the customer perspective, all right? So you're a customer, you've got tons of VMware, probably a bunch of Microsoft, and then you have all this other activity going on. What do you do? I think if you're a customer, your big thing is, do I need to keep paying so much for VMware? Like that, you know, I got out of the hyperwaves or what I'm going to get out of it, it does a great job, but I don't know that I need more of it. And then what I really want to hear from them is, how do I deal with my Microsoft applications and how am I going to deal with Amazon? Because the numbers for vCloud Air don't begin to sniff what Amazon's doing in terms of growth, in terms of- In terms of penetration. Yeah, in terms of penetration, you don't hear developers talk about a work site of a vCloud Air and that's where Amazon's winning and dominating and driving the conversation. So it's, are you going to give me a story that helps me touch all those things or are you going to go even further locked in? Which, if I hear that as a customer, I start to get real concerned, I start to explore Docker, I start to explore OpenStack more because I don't want to get, if I'm locked into Oracle for part of my stack, do I want to also be locked into VMware and you start to make difficult decisions? So is there alternatives out there? So this comes back down to the VMware license and the mentioned earlier, they don't talk about that license in the ecosystem anymore because I don't think people generally want to pay more licenses for stuff that they're saturated or happy with. But the question is, what's the alternative to the license? Is there competition out there? And obviously the platform is the cloud, right? We're talking about the cloud here. So what's the alternative to VMware license and their revenue stream? What's the threat? I feel like VMware had pricing power and that pricing power is starting to attenuate for a variety of reasons. You've mentioned several in the cloud and these other factors, but we hear from customers that they don't want to pay the V-tex. They're looking for alternatives. They've gotten, they've squeezed a ton of ROI out of VMware. It's like, okay, what's next? Well, let's now go after networking. Let's go after storage, but those are both harder. Cisco's not just standing still. What you guys taking? And Brian brought up a real good point. If I look at the applications that sit on top of VMware, there's one of two things. It's either Microsoft apps, in which case, hey, Microsoft's really gotten their act together. The Azure story for hybrid is probably one of the best in the industry for a true who's a leader in both public and private. Microsoft's there strong. And secondly, if it's not Windows, it's probably open source, leveraging Linux and everything else like that. In which case, if I'm a developer, am I going to stay with VMware or am I going to choose some alternative out there? Whether that be Red Hatch, it's doing containers and dockerization. Brian, I'm curious, your take on the cloud native announcement that VMware made a month or so ago. They had CoreOS on stage. They're saying they're all these partnerships. They've put a couple of pieces together. Is VMware creditable in the developer space? I don't think they are yet. I think, like I tend to break it up into what I call structured, which is your cloud foundry platforms, open shift, some of the very structured past platforms, which can run great on VMware, but can also run an open stack and docker. And then you've got all the unstructured stuff. So the Kubernetes and Docker and these really cool new technologies that people are kind of piecing together. I think VMware's trying to sort of figure out, can I play in those ecosystems? Can I neutralize them where they're concerned? Like Docker concerns them, I believe. They're talking about it all the time. But they're still talking to infrastructure people. They're not talking to application developers. So I feel like, cloud foundry has a connection to VMware. They're talking cloud native, but if you're VMware and you say cloud mobile, I don't know what your real connection is to that cloud native application. You're still plumbing to them. Google pumped up cloud native on their hashtag. They co-opted the cloud native branding. Are they more cloud native than VMware? I mean, guys, I mean, Kubernetes is hot. We saw that at, coming out of the Oskon announcements. How does that all fit in here? And where's VMware, Visa, V, Google, Azure, and these other guys who are fighting in the open stack battle, are they relevant there? Yeah, I mean, Dave had a great piece. It's been a couple of months, but he had a great piece that just talked about the economics of being cloud native. It is really expensive. Look, guys are putting in a billion dollars a quarter in infrastructure to build out these huge clouds. VMware's not doing anything near that, right? They might be talking about a billion dollars over three years. I mean, that's an arms race. That's a hard arms race to fight. It's a hard arms race to win if you're that far behind. Is cloud native just hype? Who's cloud native? Are there enough use cases? Is it just more build that they will come? Or are we seeing use cases of people who are cloud native outside the outliers, like the big hyperscalers, like the web apps, like the Facebooks of the world, or who's cloud native? I don't think you can take those hyperscalers out of the equation, because they are driving the economics. And if you look and you now see it with Amazon, the numbers, let's say Amazon does what? Six billion, seven billion this year at operating profit of 17 to 20, 23%. That's EMC's operating profit. So you have a company that is as profitable as EMC with software-like marginal economics driving. So then who's cloud native? So is it the enterprise? Well, so you talking about from the buyer standpoint, yeah, what's, you know, that all this is going into cloud native infrastructure. What is a cloud native app? Is it just a mobile app connected to a database? I mean, or is it the large scale Amazons of the world, which is just apps? Well, it's a great question because it begs the question for practitioners, what do you do with your non-cloud native apps, all your legacy apps? And I don't think you just fence them off. I think you have to integrate them in some way, shape, or form to the balance of the portfolio. You know, Gartner's got this thing about bimodal IT and essentially it says create a couple of stovepipes. And I don't think that's the answer. So we're going to look at cloud native at VMworld this year. So let's talk about what we're going to look for. What are you guys looking for at VMworld? I'm going to look up for cloud native. I'm looking for dev ops. I'm looking for the cloud story and where the whole end user computing kind of threads in. What are you guys looking at for Dave's too? And Brian, what's your, what's your eyes open for to hear from VMware? So for me, the big thing is, are they going to go back to being an innovation company or are they going to be really defensive? They did some nice things being defensive around OpenStack to sort of block that. They've got to play. They've been sort of aggressive now around Docker and sort of cloud native. They've done some open source stuff. That's interesting. But I want to see, are they going to drive innovation and then are they doing, do they have any customers yet? Right. VMware has gotten into this rut where they announce way ahead, not three months ahead, sometimes a year ahead, are there customers that are adopting this innovation that they're trying to drive or are they just being defensive? And that's a playbook that the large companies with a big install base take because they don't necessarily innovate. Microsoft. But they're not the innovators. So what they do is they announce a year ahead of time, they freeze the market, they get their technology ready, they buy whatever pieces they're missing and they go to market and eventually get there with a version two or a version three. But I expect to hear in that regard, a lot about VSAN and a lot about NSX, which are sort of the next two revenue drivers for VMware. I mean, Pat, when he gets up in front of Wall Street, he talks about the TAM and they've done some really serious TAM analysis. Well, they got to start delivering on that web. And she takes on that TAM. And they are delivering. I mean, they're, you know, we're still growing. Let's not forget that, but it's just becoming a much more mature company to your point. And Dave, as you pointed out last year, there was a, you know, big push around evil rail. I mean, big question I have. The theme for the show this year is like ready for any. So two years ago, it was NSX was front and center, you know, that $1.2 billion on a Sierra and where that's going to go. Well, it's got about 700 customers, which is okay, but you know, hasn't taken over, you know, transform the networking industry. Last year, evil rail, big announcement. Well, you know, VSAN 6.0 is finally starting to roll out. It's not baked into the evil rail products yet. I expect to hear more about evil rack this year, which builds out, you know, a more scalable environment, not just going out to the mid range. So we've covered a lot about what we call server sand, the hyperconversion environment and VMware their VSAN initiative. I said it was the biggest impact on that whole hyperconverse story because VMware got everybody talking about it, putting in their environment, so it's driving rural revenue. If you take the appliances and all of the drag of the solutions, we had it at over a billion dollars last year in 2014. So, you know, if you talk about where the customers are and where solutions are getting bought, you know, that software defined data center is starting to mature and, you know, we're understanding that ecosystem a little better and where VMware fits and where their partners fit. So to me, VMware has the position itself as the safe bet because customers are saying, well, look, I got all these alternatives. I'm paying this, you know, the V tax. I got all this innovation and open source coming down. You know, maybe I could move over there and I think VMware's to say, oh, that's risky. That's what they do. Now, I think that's EMC's playbook. EMC is very, very good, but they've got that belly to belly, you know, sales mentality. You know, EMC VMware is more reliant on their distribution partners. You know, whether it's a Dell or an IBM or an HP who are controlling that the chess board. Certainly the ecosystem is transforming and the market is certainly on fire right now. It's a really exciting time. Guys, I want to get your final parting thoughts. I want to hear predictions from each of you. What you predict will happen at VMworld. It could be anything. So give you some time to think, but first I want to share one. The cube will be there in force. We're going to be at Moscone North, SiliconANGLE Media's SiliconANGLE Wikibon theCUBE. We'll be at Moscone North, big lobby. We have meetups. We have a big stage. Come visit us. We'll have a lot of action. Meet the team. Go to wikibon.com for free research. You can have all the stuff going up to VMworld. For Brian Gracely, Stu Miniman, Dave Vellante, David Floyd, the whole Wikibon team. Big analysis, a lot of stuff hitting the network. And also subscribe to the premium version of the research. A lot of in-depth on the cutting edge stuff. What's happening down to the minute. So guys, so predictions at VMworld besides the cube, having a huge stage and big presence for the sixth year. What do you expect to see? What prediction will you make? We're going to go on the record for prediction. We'll see. I think that's, I think you're going to see. I mean, I think there's a real integration theme going on here. I mean, Oracle is the extreme with the red stack of integration. And I think that you've seen VMware take sort of baby steps in that direction. I think the first baby step was when they put patent charge. And we all said, okay, he's going to start grabbing, pieces of the stack, particularly storage. I think you're going to see that much, much bigger front and center this year. So the number one, and to carry on sort of Brian's piece, you're also going to see the defense mechanisms up there in a bigger way. Stu, what do you predict? So first of all, what I'd like to see and what I was actually one of the highlights for me at EMCworld this year was we actually talked a lot about the application. We talked about where the developers and where some of those new applications are going and how things need to change for that. Because for me, when VMware first went in, in the early 2000s, it was like, let's take my old legacy applications and shove them in a VMware environment on an old server and I'd keep it there forever. So I want to see a little bit more about how they're paving the path to the future. It's really been more of a pivotal story until recently, but I'd like to see that. So are you predicting that happening and that's just nice to have you. Well, I'm saying if I don't see that from VMware, I'm going to be sorely disappointed because if it's just the next version of vSphere and we got a couple of customers doing some of our pieces of the solutions around there, I'm worried about VMware going forward. I should just make a prediction. So the prediction is, put me on the spot, John. Of course, yeah. So yeah, I think we're going to have a good mix of VMware moving the ball down the field and things like OpenStack and what they're doing with vSan, moving their customers. I don't think there's going to be any major transformational announcement. There's not going to be a mega acquisition or anything like that. I feel it's going to be just next year bringing the party to Moscone. All right, Brian, prediction. So I've said for a while that I actually think Docker will end up getting acquired by Microsoft. I think there's a lot of reasoning why that makes a lot of sense. I think we're going to see VMware and Pat's going to come out with a big, big hammer and try and pound on Docker. Talk about why it's not secure. Talk about why it's not enterprise ready. I think they're going to go after somebody and I think it's going to be Docker in a big way because I think they're concerned that it's either going to impact their VM business or they're going to get acquired by somebody big like Microsoft who has had a bull's eye on them for a long time. Awesome. My prediction is that the conversation will be dominated by the EMC Federation VMware discussion. I think there's going to be a lot of distractions around that whole, do they spin in VMware? And then there'll be a lot of hallway conversations around what that means to the ecosystem. So again, all good things, economics are, you know, I watch as ringing. So look, it feels like we're already on the number here. So I think that's going to be a big part of the conversation. So guys, good job. We'll see everyone at VMworld 2015. Look for theCUBE. This is a CUBE conversation here in Malboro. Thanks for watching.