 From the CUBE Studios in Palo Alto in Boston, connecting with thought leaders all around the world, this is a CUBE Conversation. Hi, I'm Stu Miniman and welcome to this announcement with the VMware Cloud on AWS Update. Happy to welcome back to the program, Matt Morgan. He is the vice president of global marketing with VMware Cloud Services. And welcome into the program, Fred Wharton. He's the general manager of EC2 Enterprise at Amazon Web Services. Thank you so much both for joining us. Good to see you Stu. Sam, thanks Stu. Matt and Fred, the VMware AWS partnership is one that has gotten a lot of attention. I know anytime back in the day when we used to go to physical trade shows, I could know when there was a session talking about this because it was usually full and overflowing. When I've written about this topic or done videos about it, it definitely gets quite a lot of attention. So it's been over three years since the partnership was announced. But still when I talk to people, they don't necessarily really understand the depth of the integration and the work that gets done on both sides, even though you get clear messages from both Andy Jassen and Pat Gelsinger about how important this is. So Matt, maybe start with you and Fred would love your commentary as to this three year partnership and where we are today here in 2020. Absolutely. Since the initial announcement of the VMware AWS relationships, we have actually built a very special cloud service. And today we're actually deepening our partnership. In fact, today VMware goes to market saying that AWS and only AWS is our preferred public cloud partner for all vSphere based workloads. VMware cloud on AWS is a jointly engineered service meaning our product teams, our R&D teams are all working together to deliver VMware's enterprise class software defined data center solution to the AWS cloud. VMware cloud foundation is the core technology that's behind our service. And it gives us the capability to deliver that same level of infrastructure familiarity and consistency that our customers use today across every data center location, the edge and of course inside the public cloud. VMware cloud on AWS attracts an enormous amount of interest from customers. And these customers are in every vertical whether you're speaking of healthcare, media and entertainment, transportation, financial services, manufacturing, energy, government education, professional services and of course technology. And together with AWS, we're bringing together services that are being used across the whole portfolio of cloud optionality. This includes cloud migration from whether you're talking about a single app or a complete data center, disaster recovery whether you're talking about replacing a legacy system or building new disaster recovery in the cloud, data center extension, building that hybrid cloud and of course modernizing applications which we classify under the term application modernization. Great and Fred from the Amazon side. Yeah, the partnership is been fantastic over three years and I can't express enough how hard it is to actually deliver a simple solution that customers are asking for from all levels of both organizations. And to do that, it takes both AWS and VMware to deliver a solution that allows companies to leverage what they know today and extend that into the cloud and leverage all of the benefits that we're going to go over and a rapid delivery of new features which they haven't had before ever. So it's fantastic a partnership. I love what we've been doing at all levels and I say it's going to continue. The scale at which we're growing is fantastic and with that I'm happy to go over some of the announcements and why we're doing what we're doing which is all based on listening and what our customers want. Excellent, well Fred, hey, we're glad first of all that it did not get called VMC on AWS SS because we have enough acronyms already in tech. Matt, VMware and AWS, of course, clear leadership in the marketplace with three years, bring us inside as to you talked about all the verticals that were used, but where's the proof on the adoption of this technology? Love to hear a little bit about that. Yeah, absolutely. So we have customer examples across the verticals we spoke of, but it's the customer stories that are the real value demonstrator. Let's pick up a couple of those. IHS market, they were able to move a thousand plus workloads to the public cloud and that story's kind of common in the world but what's unique about this particular story is IHS market moved them in just six weeks. If you look at the cloud migration strategy in general for someone to move that fast with that many workloads it's unheard of. VMware empowers that because the operating setup that organizations have standardized in their data center is identical in the public cloud. So organizations can move workloads, we see them move hundreds of workloads in a week from their data center up to the public cloud. In addition to that, we have customer examples like the Pennsylvania Lumberman's Mutual Insurance Company that were able to demonstrate 20% cost savings by moving their disaster recovery systems to VMware cloud and AWS and that was initial savings right off the rip. Other customers like William Hill, George St. P.A. Stagecoast, PHS, more PHSH mortgage they're all demonstrating these significant value ads when people move over to the public cloud but leverage that VMware cloud solution. All right and Fred from obviously AWS also plays across these environments but would like to hear your side too. Yeah, a couple examples like S&P Global Ratings they spun up a new application environment in a few hours instead of months let alone taking all the burden off of their supply chain and management of that like Matt said in terms of seeing cost savings. So agility and speed and allows them to really focus on their applications and start to modernize and innovate in areas that really differentiate them. They've had 100% uptime for regulatory applications and a 50% improved disaster recovery time. Other customers have built out a disaster recovery plan and then actually spun to VMware cloud on AWS as their primary because they had better performance. So the whole range of options in terms of better performance, better TCO and economics and mostly agility on what they can do going forward with applications that may already be built on AWS as well with native services. Matt you touched on some great customer examples maybe give us some broad themes as to what are the key drivers as to why customers are adopting VMware cloud on AWS. Yeah, absolutely. As with any infrastructure conversation total cost of ownership is a big piece of the equation. Organizations want to look at their footprint today they want to look at their footprint next year and then of course many years out. So when you look at the public cloud cloud economics are a big driver. VMware of course adopts the whole concept of cloud economics whole horse. Meaning that we give you the capability to recognize the advantages of an OPEX model the ability to have on-demand services the ability to have a managed IaaS all of that is part and parcel to our service. But on top of that there's unique capabilities that VMware cloud on AWS delivers that deliver unique economic value. The first is this concept of zero refactoring. Our customers tell us that this alone allows them to eliminate what they call as rework sometimes called the rework tax which prevents organizations from moving applications to the cloud without reworking them without working their data layer re-architecting how they run they can move them because the operating layer is consistent. Another area of value that's unique to VMware cloud on AWS is the leverage of existing skill sets. Today's operators are trained on vCenter. They're trained on all the supporting infrastructure around VMware. All of that applies with VMware cloud on AWS. So the ability to translate those skills into a cloud skill set right off the bat is of enormous value. Of course, flexibility is another big one as organizations embrace what are being seen as composite applications which are applications that span the data center the public cloud out to the edge the ability to move logic as needed to be able to have portability is something we deliver. Again, that's an economic value that we are able to provide. Now this has been quantified by third parties. There's been several major third parties including Forrester, including IDC that have published value added statements around the total economic impact of VMware cloud on AWS. In fact, just last year there was a study that was commissioned by Forrester that demonstrated a 59% reoccurring savings in terms of infrastructure and operating savings compared to an on-premise implementation. When you look at migration, that accelerates to 69% because organizations can save almost 70% of moving applications by eliminating rework and refactoring. That's an IDC statistic. All right, maybe it would make sense to talk about just overall adoption of the solution. I believe you've got some stats you can share. So yeah, if you look at the adoption we have delivered enormous growth over the last year of the service. Total number of hosts year over year are up 2.5X. Total number of running VMs year over year is actually larger at 3.5X which indicates that customers are not just adopting but they're accelerating their adoption. We now have 21,000 plus number of hands-on labs that have been consumed since July of 2019 a year ago and there are now 300 plus validated technology partner solutions available. And on top of that, 530 channel partners with VMware cloud service competency are now registered and available to assist. These are tremendous statistics for 12 short months. Well, congratulations to both VMware and AWS on that progress. Maybe talk a little bit about trends just briefly. I'd look over the last three months, we've talked to both AWS and VMware customers. Obviously with the global pandemic there's been certain things that they've needed to rapidly do, things like VDI and user computing, remote contact centers are something that they need to rapidly expand on. But is there anything different or general trends that you would both like to share? Matt, we'll once again start with you and then Fred, get your take on it. Yeah, there's a regional school district in the US that in light of COVID needed to spin up 10,000 plus people working remotely. And by leveraging VMware cloud on AWS, they were able to conduct virtual classrooms in very short order by leveraging this broad scale infrastructure powered by VMware cloud on AWS. Over time, that provided flexibility and agility but it also reduced their costs. They've been able to eliminate hardware replacement plans that were gonna cost significant amount of money. In fact, they're showing and telling us that they're able to save 75% of those forecasted costs. But everything is really about business continuity today. Today's unfortunate economic environment where we're working through this pandemic, this global pandemic. IT organization and businesses, they're embracing a tried and true understanding of what it means to move to the cloud. But they're embracing it more in a more aggressive way because the supply chain has been disrupted. If you think about a traditional supply chain where organizations have to receive machines, set up those machines, have them wired in, have certain people on site to get those machines configured, move application, that's a lot of steps in the process, many of which have been totally disrupted during the pandemic. The idea of VMware cloud on AWS is that you replace an analog supply chain with a digital supply chain. We can now help organizations get new equipment, new capacity, new resources up and running instantly. They don't have to worry about all the steps that were previously required that have been disrupted in a pandemic. The cloud provides that operating environment that maps one for one to the realities of today's world. And they're also able to understand that looking forward that that setup enables them to be more future ready, ready for whatever comes next to deliver what the business needs. Yeah, there's a number of reasons that you just touched on, Matt, that are examples that we can bring out on that elasticity. For example, Penny Mac, anytime there are changes in the market, for example, on either both for VDI or just on processing of loans. When the pandemic hit, a lot of people actually paused on both looking and or changing their patterns. And this solution has been fantastic for either scaling up or scaling down both ways. And they can do it very quickly. They can do it within a number of a variety of means, whether it's a single VM or it's moving an entire migration into VMware or cloud on AWS. So great results there. It's that the case studies speak for themselves. There's a lot of examples that we have up on both of our sites would really be good to take a look at those in detail if you're interested. It's fun to see. Helps a lot. If I could follow up with you on something there. When I talk about, I go to the cloud, often that movement is step one. How do I take advantage of modernization, whether that be from my application standpoint or leveraging new services? I wonder if you can give me the AWS side there and Matt would love to hear how VMware is helping customers along this journey too. Well, the first is, we wanna meet people where they're at with their knowledge set and their skill set. And this is a fantastic part. Customers can move quickly with the domain knowledge that they've got. We can assist in translating and making sure that the environment in the SDDC is set up in a way that is tailored to what their needs are. Whether it's an extension or if it's a complete migration as step one. But step two really is, once they're leveraging VMware Cloud on AWS, is they have a lot of needs in terms of their CICD, their development tools or samples and applications around automation. And we can take and help them with that. That content is already posted on our developer tool site and our developer center for this solution. It really assists them in learning about how to leverage the elasticity and the security and the networking capabilities that allow them to go in and then use all the rest of the rich AWS services as well. So if you look at some of the things that are coming out, for example, VMware Transit Connect, which allows a layer of three solution to be built on top of our AWS Transit Gateway so that we can interconnect multiple VPCs and in an environment that may be running either software as a solution on AWS or a native application that was built with managed services completely in sync and in harmony with VMware Cloud on AWS. So that's what's happening at a rapid pace. It allows people to bite off the chunks that they want to modernize and will use tools that are either familiar with them and or automation improvements that we've got between code tools across the board. So it's great to see the work that they're doing. Great, and Matt on the modernization piece? Yeah, so our surveys tell us that customers want to modernize their existing applications but those same customers don't want to start over. So this is an important value proposition that we deliver in partnership with AWS. Organizations can take a business process application, they can migrate it to the cloud, they can extend and enrich that application with AWS services, they can extend and enrich that application with additional machine learning capabilities, they can extend it with containerized extensions, they can support a broader modern agenda without having to start over. And I think that that is a value proposition that resonates with everyone because people often need must leverage what they already have built what the baseline is for the business itself. In addition to this, composite applications are now becoming the norm with data and processing being more co-located end-to-end applications often consist of processing and data for certain tasks to be either pushed out to the edge or remain on premises in the data center in addition to the cloud. That value proposition of VMware delivering a hybrid cloud with consistent infrastructure and operations enables those composite applications to be built and deployed in a highly efficient way which is a big piece to the modernization story. In addition to this with Tanzu Kubernetes Grid is a customer managed option. Organizations can run those containerized components right on top of our service all of which integrates very cleanly with the whole library of services that AWS offers. End-to-end you have all the optionality you need plus the speed of migration and capabilities once you get up to the public cloud. All right, let's get into the new pieces of the partnership here. Matt, first of all, when I think about VMware Cloud on AWS the customers that I've mostly spoken to over the last couple of years have tended to be some of the larger enterprises. I've heard you're alluding towards some capabilities to the small and medium business. I know I'm looking forward to talking to PLM Insurance, one of the companies leveraging this solution as part of this announcement. What's new and the impact that this will have on the addressable market that VMware Cloud can hit for AWS? Yeah, so with this announcement, VMware Cloud and AWS were extending it to offer three new capabilities, three new announcements of capabilities. The first one is all about what you just spoke of which is about extending the VMware Cloud on AWS value proposition to more customers. So currently customers can spin up production clusters with three hosts or of course much more than that but three hosts was kind of the entry level for production cluster. What we're announcing is the ability to create production clusters with all the capabilities that go into what we define as a production cluster with just two hosts. That means customers will be able to deploy production environments with two hosts in a cluster dramatically reducing their costs. In fact, the traditional costs will come down by 33%. So this is all about providing the full capabilities of VMware Cloud on AWS but to be able to do it at a smaller investment envelope. So in addition to this, we're rolling on enhancements to VMware Cloud Director offering it as a service. VMware Cloud Director now will deliver multi-tenancy to VMware Cloud on AWS specifically designed for MSPs. As you know, VMware's partner ecosystem is filled with managed service providers. We have an enormous collection of these that add value on top of VMware Cloud on AWS. Here by using VMware Cloud Director service, they can deliver multi-tenancy to their customers and this is designed specifically to serve the needs of small to medium size enterprises. These capabilities enable MSPs to serve those needs and it will be available initially in North America and this will give them the opportunity to say, hey, if you want to get started on VMware Cloud on AWS, we can give you bite-sized pools designed specifically for what you need. And this is a very asset-like pay-as-you-grow model which aligns specifically to that market. It's fascinating to watch, Matt. I think, not that many years ago if I'd attended VMworld and talked to the MSPs and they talk how deeply they appreciate the VMware partnership and that cloud company was the enemy. And today, AWS and VMware are partnering with them, helping to make sure that in this hybrid world that they play a role to help get to the enterprise. Fred, anytime we go to reinvent, new announcements usually come to a huge fanfare, even something like a new bare metal instance. Last year it was the I3EN metal instance. People get pretty excited, help us understand what this really means, what advantages it has, are there any limitations? What should we know about the capabilities AWS has now available to the VMware Cloud? Well, first off, thanks, Stu. I3EN is really exciting that we're launching. It will meet the need of storage-intensive workloads and it'll do it far better than what we've had before. It takes advantages of all the learnings and investments that we put into instances across the board for AWS, such as Nitro. If you have high random IO access, such as needed for relational database or workloads that have additional security that we have baked in, it's going to meet those needs. Compared to I3EN metal, it has more memory, more usable high-performance storage and additional security. The example of a yield compared to I3 is about a 22% performance improvement and value. So we're delivering four times the raw storage for about 2.2 times the cost. So in essence, you're getting raw storage at half the cost of an I3EN. So customers are excited. It's one of many instances that we will launch in the future for VMware Cloud on AWS. And that's one of the advantages, is people can instantly take advantage of these innovations that we have, just like we've done across all of the other instance families to meet workloads that customers are talking to us about, that they want to run on this platform. Excellent. Well, I really look forward. I know we're going to have a deep dive with Kit Colbert to go into a little bit under the hood. And as I mentioned, I got one of your joint customers, PLM Insurance, to understand their use case and how they're doing it. Matt and Fred, just if you could, just give us final takeaway, VMware Cloud on AWS, Matt and then Fred. Okay, well, first off, thank you Stu for this opportunity to speak. I always enjoy spending time with you and certainly with Fred. We're just super excited and thrilled about our partnership. VMware couldn't be happier with our partnership with AWS from engineering to marketing, customer experience. Our teams are working together hand in glove to ensure success for our customers. VMware Cloud on AWS is a truly unique service. Customers can continue business operations with minimal disruption in case of any uncertain event. They can migrate their workloads fast in a very cost effective manner with minimal risk. And we're really all about helping large enterprises as well as small and medium businesses accelerate their cloud migration and modernization journey. In fact, if you look across the board, we have seen enormous uptake. And now with these new offerings that we talked about, especially the two host production cluster and VMware Cloud Director Service, we believe we're going to be more attractive to more organizations of varied sizes. We're excited about the road ahead. And Fred, the customers are excited about this road. I would add one, thank you guys for having us on. It's great to tell this story. The feedback has been phenomenal. The growth in the adoption and what we're seeing in terms of use cases across the board is much stronger than we could have imagined. So it's really great to see this work that is hard to do to really merge the best of VMware and the best of AWS in a true deep partnership. And that takes work at all layers, whether it's a commerce system integration or if it's the instance engineering and roadmap work across the board or networking and customer support across the board for solutions that run on this platform. Both of us are joined to make sure customers are satisfied regardless of what it takes. That's something that no one else has and it is unique. And it's a long-term commitment that we have with each other to do the right thing for this solution because we can't do it individually. This is something that truly only a joint partnership as strong as this is and has gotten stronger can deliver. So we're super excited about it. I think you're going to continue to see the pace of innovation on what we're delivering increase. And so with that, it's been great to work with VMware on this, it's really fun. Well, thank you, Fred. Thank you, Matt. Yeah, congratulations to your team. And of course, love hearing the customer stories and feedback. Thank you, Stu. All right, be sure to check out the other interviews as part of this announcement and check out thecube.net, of course, we're covering VMware and AWS, deeply including their shows, whether they are in-person or virtual. I'm Stu Miniman and thank you for watching theCUBE.