 from Las Vegas, it's theCUBE. Covering VMworld 2018. Brought to you by VMware and its ecosystem partners. Welcome back to theCUBE. We are live at VMworld 2018, Menley Bay in Las Vegas. I'm Lisa Martin with Dave Vellante. Hey Dave. Hey Lisa, how's it going? Great. This morning started off with tremendous amount of momentum from Pat Gelsinger including a new tattoo that he debuted 20th anniversary of VMware, 20th anniversary of the Rockspace Dell EMC partnership. Please welcome to theCUBE a veteran and alumni. Peter, if it's given the VP and GM of the VMware practice at Rockspace, Peter, it's great to have you back. Great to be back here again at VMworlds. And we're excited to welcome David Trigg to theCUBE, the global vice president of market development and service providers from Dell EMC. Welcome. Thank you, glad to be here. So happy 20th anniversary to Rockspace and Dell EMC. Thank you. Long standing partnership. What's going on? A lot of momentum at Dell Tech World just what, four months ago. What's some of the momentum that you guys have seen in your joint customer space this summer? Yeah, so at Dell Technologies World, we launched our Rockspace private cloud powered by VMware or everywhere edition as we're referring to it, which is extending Rockspace private clouds into customer data centers and colos. And since that announcement back at Dell Technologies World, we've seen fantastic adoption from both our existing install base that's interested and knows the Rockspace brand and our fanatical experience as well as net new customers that know now we can service them in new locations. And then David, for you, Dell Technologies World was all about IT transformation, digital transformation, security transformation and making it real. How is Dell EMC working with Rockspace to help customers make these transformations a successful reality? Yeah, one of the first things in my opinion to highlight is the length and time that we have worked together. And through that length and time, Rockspace has made incredible investments in their skill set, their ability to manage infrastructure. There's a lot of a deep knowledge there. So customers can feel very confident about the ability to provide the services. And as customers go through transformation, customers have more choices now and more things as we talk about the edge and the core and the cloud, they have to manage infrastructure in more places than they've ever had to manage before. So we're very proud of the relationship that we've had, the investments that they've made because our customers are needing help in managing through not only the transformations but all of the choices that they have to make on where's the best place to put an application or where's the best place to put a workload and how do they manage the migrations and the modernization. And so yeah, it plays very, very close into our transformation message and quite frankly, we couldn't do it without partners like Rockspace. We'll talk a little bit more about that because you're talking about more than just a storage partnership. Oh yeah. A lot more too and it's much more comprehensive. Absolutely. So there's a lot of integration, practices and areas of expertise. So let's double click on that a little bit. Yeah, well, there's a lot of skill sets that are required to even just do assessments or really understanding where do the applications go. Really then making sure that they understand how do you support the infrastructure? How do you monitor the infrastructure and how do you make sure that it's running a lot? And again, Rockspace has made a lot of investments as one of the best in the world in being able to help do a lot of this. Well, let's talk a little bit more about that. Why Rockspace? Well, we are offering customers strategic flexibility really, whether they want to deploy in a Rockspace data center, a customer data center, get access to our deep expertise, not just in Dell EMC, but our 150 plus VMware certified experts that our customers can now tap into because this world gets more and more complex and you saw even the announcements this morning. I was like, how do our customers get the best value from those technologies and not simply have shelf wear? Tap into Rockspace with our partnerships with its EMC and VMware to get the real value out of that expensive technology. So from a customer standpoint, help us understand what's really going on. You know, we've asked the question a lot this week is things like the AWS VMware partnership, is it a one-way trip to the cloud or is it a boom for the data center? And a lot of people are saying the latter, what are customers saying? What do they really want to do? Customers are going to be living in their data centers for a long time at YetiCon. We've got legacy applications moving on mainframes. We've got client server applications and we have direct cloud native applications but there's a slew of applications in the middle where customers are kind of unsure about where to go and they lean on a trusted partner like Rockspace who really is cloud agnostic to help them figure out should they go public cloud, should they be private cloud or are they on a hybrid cloud journey like everybody is on? So we want to be the Switzerland where we can help people determine where they should go and really offer unbiased expertise. So you guys announced in kind of along the lines of being Switzerland at Dell Technologies World, Rackspace private cloud everywhere powered by VMR, everywhere. I know you've got what, five data centers and five continents, talk about that everywhere. How does it help customers to embrace the reality of multi-cloud and to actually do so in a way that allows them to understand working with you guys where different applications should be placed at different times in the year. So everywhere is a natural evolution of what we've offered in our own data centers over time. So now to point out in customer data centers and Colos, well later this year we hope to launch a formal VMware on AWS software as well. So everywhere constitutes three parts really, Rackspace data centers, customer data centers to get as close to their data as needs be and VMware on AWS as that product matures as you saw from a number of announcements this morning. It add on to John's question about the promise of the cloud. I think the original promise and maybe the threat of the cloud was everything was going to the cloud. Well as we're learning through IoT and other new emerging trends, that's not realistic. Customers really have to think about the edge, their own data centers, because their own data centers are not going away. They have to think about the SLAs that they're providing to their end users, to their employees and that's where you have to place the application, the workload in the right place to enable the best customer experience for their customers and their employees and that's where a company like Rackspace, they can really get to the edge, the core, the cloud by managing that infrastructure regardless. Obviously the investments that VMware is making to help enable that as well and being supported by a lot of the Dell EMC stuff. It's an exciting time I think. I want to follow up on that because Peter, off camera you said cloud migration doesn't mean leaving your data center. Absolutely. This Gartner analyst came out, not that recently but I think it was last year and said 80% of data centers will shut down by 2025. So that caused a lot of both eye rolling and no way and et cetera. The Wikibon crew, which is affiliated with theCUBE, sister company, sister division, just came out with reports that true private cloud is going to be a $32 billion market this year. So that means on-prem cloud. So you have all these countervailing messages going on and then you see the epitome of Andy Jassy up on stage today with Pat Gelsinger talking about hybrid cloud. What do you guys make of all this? What's really happening and going to happen? I think customer data centers are going to live for some time to come as people figure out where should the workload actually go? What can they do with that specific workload? Can they refactor, rebuild it for it and go cloud native? Great. Can they move it to a hosted private cloud model with a rack space rolling racks into a customer data center? Or is it a legacy application that really needs to be kept and maintained over time until the next disruption happens where they really have to refactor it? Yeah, really, in that case, there may be no business case. Why lift it and shift it for what? Just to say, hey, I'm in the cloud? Exactly. I think cloud migrations does not mean leaving your data center. I think that's going to continue for some time where people can get the benefits from rack space moving from a CAPEX to an OPEX model with managed services, with industry-leading SLAs, but still in their own data center because they have applications running that cannot be moved. Well, it's interesting, David, to see this equilibrium that's kind of being reached. You know, a few short years ago, there was sort of antagonism between VMware and the AWS, you know, the whole bookseller comment. Andy Jassy was like, on prem cloud, there's no such thing. And now you see those worlds coming together. Underscoring the reality that you can't just shove your business into the public cloud, you can't just move all your data there, and there may not be a business case or an advantage of doing that. Right, right. What do you see? Well, a lot of times the answer to the question in the, well, and I'm not an analyst, it's not my job to really predict where it's going to go. I mean, obviously we watch trends and look where it's going. You know, my job and our job is to help customers deal with the realities that they're dealing with right now, right, and they have data centers. They are thinking about the cloud. They are having to take care of the edge, right? And in time, we've seen some of those shifts, right? There was a lot of the, where are we going with the cloud? Where is it going to go? Are they going to shut down all their data centers? Regardless of that, we will adjust to the market and make sure that we're adjusting the market. But more importantly, we're going to do what's right for our customers to help enable them to those journeys and it's still yet to be proven. There's a lot of predictions out there where they shut down all data centers. I'm sure there'll be some consolidation of it, but yeah, it's getting more complex. Okay, so VMware, Rackspace, Dell EMC, you're not screwed. Jack, what about the edge? Help us unpack that a little bit. You know, with our VMware at the edge, Rackspace, Dell EMC, what do you guys see evolving there? I think there's many definitions of the edge and when you talk about everything's IoT initially, but even just deploying smaller data centers in customer locations, in partnership with these guys to kind of meet customers where they are and get smaller rolling racks into different locations is continuing to be something that customers are looking for. So there's the hinterland edge, which is a bunch of devices, IP cameras, they're going to be instrumented. Most of the data is going to stay there anyway, but then I think you guys call it out of the core there's a aggregation point. Well, the core, it's just typically what we refer to as kind of the customer data center and then there's the cloud, right? So kind of the two different customer data center versus the cloud and then truly the edge capturing and it's starting to refer to everything from, you know, laptops, phones, as well as really a lot of sensors that are going to be out there and your ability to have to process and analyze and react real time at the edge. And so a lot of use cases, public safety use cases where, you know, when an event happens, that connection back to a place where you would analyze but obviously autonomous cars, right? They can't have to connect to a data center every time it wants to make a left turn. So a lot of that ability has to be pushed out to the edge but yet then also be able to bring that data back, be able to manage that and be able to update those computers or those data centers. I mean, an autonomous car is basically a mini data center. Someone's got to manage that patch, that make sure it's running and managing that. So yeah, to your point, the edge is beginning to mean a lot of different things. There are the hinterlands I think was the word you use, you know, and some of those things but then, you know, there are the more traditional work cases and even just, you know, running a phone app is now considered an app versus, you know, and that's where people start to really look at it, how do you deliver that experience on a desktop phone and that's an application. A lot of data. I like to follow the data. A lot of data at the edge, a lot of data, like I say, at the aggregation point and then if you want to do some hardcore modeling, go to the cloud and that cloud can be your own on-prem data center. Yeah, there's just so much data being generated and data is power I think is one of the key taglines of Dell EMC world and I was like, it truly is, it's like where the data is is where the power is. So some has to be transferred back to the core, some may be pushed up to the cloud for deep processing with AI and ML type processing but there'll be data at all these different points. Well that's the other point is it's like the innovation engine no longer is Moore's law in this industry. It's the data applying machine intelligence and then cloud scale. And then you've got to, as suppliers in this business you better be playing in some way shape or form in all three of those, right? Absolutely. So how are we speaking of that? I think Pat Gelsinger talked about it this morning in the context of superpowers. You talked about autonomous vehicles, AI, machine learning, advanced analytics, IoT. How is Dell EMC and their technology, Peter, helping to enable rack space to optimize your offerings to be able to take advantage of machine learning AI to be able to deliver on customer expectations? Yeah, we're deeply partnered with these guys that from those announcements that you heard earlier this year that we're already investigating different capabilities they're having from an AI, ML perspective, really seeing what sort of technologies are they launching that we can then put into our private cloud practice and offer to our customers. So our deep partnership allows us to get a front seat at that and working closely to investigate and do a lot of OR&D with the new capabilities they're coming out with. But super power does that give rack space in terms of differentiation? Oh, you stomp me on that one. Well, customers that we talked about, everybody wants flexibility, they also have choice. What are some of the things that this 20 year partnership infuses into rack space to give you that, those differentiation points? It's the deep partnership and knowing, working so long together that we know who to pick up the phone to solve some of these complex problems. Yeah, and for us, from my perspective, we always start with our joint customers in mind first, right? So it's our job to bring the advanced technologies, the advanced capabilities that we're making big investments in and make sure that rack space is able to support and leverage those within their business so that we can provide a better experience for the end customer, but then also making sure that we show rack space how they make money on that and how they can run a business on that that really is differentiated to your point, because a lot of, you know, you painted a very pretty vision of what the world might look like. Most customers aren't there yet. Most customers aren't taking advantage of AI and deep learning. They're still dealing with some very traditional legacy issues and it's that gap that becomes very, you know, we love talking about the cool new exciting stuff, but for a lot of customers, they're stuck somewhere in the middle and that's where partnerships like this because you can not only help them with the legacy old stuff, you know, how do you migrate and then how do you take advantage of the really new stuff or how do you start at least thinking about that and exploring that and looking, you know, a lot of the original IoT use cases, you know, the ROI wasn't known. They're like set up projects and they hope they'd get a benefit out of it, right? And that's continuing to merge and evolve as time goes on. Well, it's hard too. I mean, everybody's afraid of getting Uberized and disrupted, et cetera, et cetera, but they, at the same time, if you over rotate, you know, to a new, you can spend a bunch of money and not get any return. Everybody's trying to get digital right, it seems, but it's unclear what that means so they look to partners like you to help them figure that out. Well, it's a scary journey to your point because they obviously have existing revenue streams. They, you know, it's the innovator's dilemma, right? You know, they have existing revenue streams but how do they digitize their business? How do they reach customers in a different way? And so they don't become Uberized or Airbnb'd or whatever term you want to use. And every CIO, every executive is thinking about that. You know, IT for a long time was about taking cost out of the business which, after a while, that's not fun because that usually means headcount reductions. That usually, I mean, that's not a fun conversation to have every single day. Now with the digital transformations about how do you generate new revenue streams? How do you, in a way, a lot of companies never, you know, one of the most older industries being taxis, you know, not that exciting. It's gotten reinvigorated through some of these things. So it's- That's kind of cool. Yeah, and you said digital transformation, right? What does that really mean? Cloud transformation, security transformation, cloud transformation. So there's many different factors and companies like Rackspace can offer expertise in all those different areas where some of our competitors may only hit one of those. They're only a security company, you're only a VMware shop, only an AWS shop. Helping customers really glean the power from that data because if they can, it's not powerful. Well, Jonathan, gentlemen, thank you so much for stopping by theCUBE and talking with Dave and me. We appreciate hearing what's going on with Rackspace and Dell EMC. Thank you guys so much. Appreciate it. Appreciate the time. We want to thank you for watching theCUBE for Dave Vellante. I'm Lisa Martin. We're at VMworld Day One. Stick around, we'll be back after a break.