 All right, everybody, welcome back to VMware Explorer 2023. This is, we're winding up day three of theCUBE's coverage, it's our 13th year covering VMware, explore slash VM world. I'm Dave Vellante with my co-host Rob Streche. Paul Nashwadi is here, he's an analyst with ESG and lately a friend of theCUBE, it's great to see you again. You too, great to be here. Yeah, you guys have done some really good analysis. You guys did a little video in the studio a couple of weeks ago. Anyway, Paul, you've been following this space for a while. Let's start with the big news, there's Broadcom, there's MultiCloud, there's the consolidation of Tanzu and Aria, and there's obviously a ton of AI. What do you see that excites you or interests you or that you give the thumbs up or thumbs down to? Yeah, definitely, definitely. Well, first, thanks for having me today, this is great. We're doing a lot of research around what's happening in this space, around what's going on with distributed we call it distributed cloud and enterprise strategy group. It's similar to multi-cloud approaches. We can see that there's a lot that's going on in the developer community, the adoption and confusion as well, what's happening with the Broadcom acquisition of what's happening from the developer side, which is causing a little bit of angst, right? But what I liked that was coming out of the show today was the focus on the Tanzu platform and the kind of unification across the application engine that they're putting out that's in beta, the intelligent assist, guardrails for compliance, and then all the other pieces that put it in place. But one of the real cool factors when you're talking about distributed clouds and you're talking about this multi-cloud approach, it really does, and the organizations I speak to, they're really looking at that harmonization across these distributed clouds. So, go ahead. Yeah, the one thing that I've seen, I guess, missing this week, and I'm interested in your view on this, is really the developer persona. I know they had Spring One, and it was the first time ever having Spring One cohabitate with, I almost call the VM world, I know, the VM Explorer, but have you seen a lot of developers, roaming the floor, bumping into them? I haven't, and I'm kind of wondering, did they all come for one day and then take off, or what? Yeah, yeah, unlike other industry events that I've been to, other vendor events, VMware tends to be more business-focused. It's more focused on the solution selling, the operational side of the house, less so on the developer side, where other industry events that, you typically have a developer-focused conference. I haven't seen a lot of developers, but I have seen the emphasis on the developer with the portfolio that's coming out with. I see, but I really haven't seen a ton of developers here, although Keith Townsend was on earlier, and he said he was talking to a developer, and the developer said to Keith, why don't we even need Tanzu? Why don't I just keep using my open-source tools, and Keith was explaining, well, if you get this integrated experience, and you're going to get that added value, et cetera, et cetera, but that's the rub, right? A lot of developers are going to say, well, I'm good, I'm using open-source tools, I'm using open-shift, whatever it is, right? It's very popular. So my question is, when you think about VMware strategy, their roadmap that they laid out, particularly their cross-cloud approach, and their need to attract developers and injecting AI, is Tanzu a prerequisite, Tanzu adoption, prerequisite for success for VMware and its core future, or is the fallback to open-source adequate for them to continue to thrive? It's a great question, and I hear this quite a bit. In our last session that we talked about the adoption of open-source and such, one of the things that I often hear from the CIOs and organizations is their number one challenge is modernization, right? They need to modernize, they need to grow, right? However, the challenge with modernization is their bench that they have today are trying to keep the wheels on the bus, they're trying to keep driving down the road, right? They don't have any new resources for innovation, right? And when you look at using open-source, organizations have to pay for it one way or another. Either they have a bench to do it, or they go to enterprise-level product, right? And if they look at an enterprise-level product, it's a path to lease resistance. How fast can you get something stood up? If you go to Tanzuru, you may have the opportunity to stand something up much faster than standing up in an open-source environment. So there's, you pay off, if you have the strong bench, then you may want to go open-source. If you want to go with a faster time to value, you may go with an enterprise solution. So Tanzu is the sort of easy button, if you will, is a solution. But how, I guess, let me ask the question differently. Can VMware succeed long-term without that Tanzu adoption? Yeah, I mean, I think they can. Again, if they embrace the partners, if it's so, you know, I'm quoted as saying, you know, I think it's off the island, you know, and I think packaging all these things together makes it a more attractive potential piece that could be sold off by bringing ARIA and all the stuff together. But I think really there's still pieces missing inside that package. And I think you see it when you go to the private AI side of the house, where they can get you to the container level, but then you still need to go bring all these open-source pieces in on top of it to really complete out the private AI type of packaging. I would challenge that a little bit. And the reason I would challenge that is because I look at it in the context of VMware built, it has a rich history in the infrastructure side, right? They really have done well in that space, right? With vSphere and vSAN, it's great. But in order to not become commoditized, they need to move up stack, right? And by moving up stack, adding in the Tanzu pieces, adding in tools like Transformer, and that's when we talk about modernization, Transformer helps accelerate that modernization for those applications. That's something that they can't do with just the infrastructure side of business alone. So I think if they do partner, if they move off Tanzu, say post acquisition or not, if they do, they go into need to partner with something like Tanzu in order to be competitive. But I mean, they're betting their multicloud strategy and that abstraction layer that creates their super cloud on Tanzu. And so I would say that they go hand in hand, but it's not clear to me that, I mean, I think- But it's not only the abstraction layer, it's the actual, the automation layer. Yeah, I've told you. And I think where, I think this is where the whole multicloud thing still falls down. Because when they say multicloud, they mean multi-VMware cloud. And so for them, they're still not going far enough with the Tanzu ARIA stuff to be able, like for instance, if I'm going to go build an application, and I know you guys had some research in the microservices area, but I think if I'm going to build an application that is partially in a VM and partially in EKS, for instance, Tanzu isn't going to help me build out the ELB and the ALBs in front of, those load balancers in front of it, unless I'm using Tanzu as my platform. But it is going to simplify my VMware estate. And so- If I have, if I'm doing Kubernetes on- On VMware. On VMware. But I'm okay with that, because at least that solves the VMware problem. I mean, there's a, all I'm saying, I understand it constricts their TAM a little bit, but there's a pretty big TAM to go after. Technically, it's not trivial to make that work across clouds. I don't disagree with that, but there's other people who are doing it out there, that have been doing it a lot longer. All of the Linux folks have packages that run in all of these different clouds as well. Red Hat, for instance. Red Hat, SUSE, Canonical, all of them. And they all have this management in there that can go and do that on-prem versus in the cloud as well. So they do have the control layer. This is why I look at it and go, is this a fight worth fighting when you're going to, what percentage can you actually get of the TAM? So what's the alternative? Do you partner with a Red Hat, for example, and just? Maybe, maybe. But so, I mean, I would take a slightly different approach as well on this, just like, so when we look at our enterprise strategy group research, we find that 96% of respondents in our distributed cloud series are running on two or more clouds. We see that 65% are running on four or more clouds. So to your point, cloud proliferation, multi-cloud is definitely a thing. Talking to Betty on the Tanzu team and sitting through the sessions, one of the things that they introduced that explored this year was moving away from just the ARIA hub that focuses on the VMware cloud to at the Tanzu hub to really start spawning across these multiple clouds to your point. And also to your point, when I tell the story about this modernization, microservices and Kubernetes is a core part of what I would call the present state. So I see past, present, and future for application development, past being those monolithic applications or encapsulated VMs, those encapsulated VMs, some organizations are just moving that into a cloud, right? As a cloud-ready VM, right? Not cloud-native, just cloud-ready. But then when you look at containerization and you look at microservices, you know, portability of applications, integration to the rest of the infrastructure, we see that 33% of organizations are to see that as a core part of their modernization play. So it's a big, big part of it. The question I have, and this is something that nobody's addressed so far at VMware, in my mind, is where do they sit with future technologies? And that third pillar, like WebAssembly and Wasm, and where are they going with that? A lot of organizations are skipping this past and jumping over the current state, going right to Wasm and trying to say, we're going to get rid of that altogether. So what is that? So if you were advising VMware, what would you tell them to, how would you tell them to deal with that trend? Yeah, absolutely, it's a great question. So when I look at it, I look at it, again, I have these conversations with the organizations all the time. It's about the harmonization across those three pillars. Most organizations are still in that past pillar. They're trying to get out of that stage of, hey, I have this monolithic applications or I need to move away from that environment. If they move to the containerization, they have a skill gap issue. If they jump over the containerization and microservices piece, then they go right to Wasm, they skip over that skill gap issue. So it needs to be very, a broader focus across where the organizations are going for today and for tomorrow. Is it an advantage for VMware though, that they kind of tend to move at the speed of the CIO? I mean, IE, inertia, slows everything down, and it gives them, and maybe that changes with the sort of AI craze. Maybe they, you know. Well, I think that's it. I mean, if you look at Wasm and you look at things like, RPA kind of going away because of AI, bots helping and co-pilots and stuff like that, I think you start to get into, I think that's a great point. Do you need containerization in between? I think you're going to have all three pieces to your point in it. And I think to your point, the CIOs have probably spent the last couple of years trying to get containers up and running in there as well. So that's just VMware has to participate in all of the above. Absolutely. And so keep in mind, I was having this conversation at this event as well with the leadership at VMware. I was saying like to keep in mind that you made a point. Where are CIOs today? Where are they going? Well, they're just consuming what was announced at last year's explore, not this year's, right? So there was a release of content from last year. They're going, we're getting our head around that. Now we come to a new one and it's a whole new level and they're moving things around. And so there has to be some harmonization across the messaging, right? And make it frictionless. If it's not frictionless, it's going to be incredibly confusing for organizations. They don't know where to move, right? And on top of it, again, going back to the monetization story, there is that skill gap issue. If I have this future tech stack that I'm looking at and I'm in this past state, how do I get to where I need to go? Skate where the puck is, not where you're not chasing after it, right? Yeah. I think that to me is, because I don't see them going out and acquiring wasm technology, given what's going on from a Broadcom perspective. So I look at it and go, if I was them, if I was advising them, I'd say throw it off the island, go and partner for the container, the container layer, go after wasm because to your point, that's where the puck is going. Right, but I would actually add a little bit to that, right? I don't know if I would throw it off the island, right? I think what I would do is I would say, okay, Tanzu needs to support wasm from an orchestration perspective because wasm and those applications will still need orchestration, just won't need containerization. That's a good point. So I think here's what's going to happen. I think the core of VMware, the vSphere, vSAN, we'll see about NSX, but the core is getting funded, it's got revenue and it's got a plan because it's a higher probability that that core hits its plan than take, for instance, Tanzu. It also has a plan, it's a much more modest plan, but if it doesn't hit that plan in six months, it's going to be okay. It's going to be a difficult conversation, but we'll help you get back on track. You're going to get another six months and it's maybe 18 months before they would throw it over the side. And so I think it's going to come down to where Broadcom sees traction and can drive the P&L. Yeah, well, there's one other piece I would add into it is the reason why other vendors in the space have probably a larger developer community is because they offer a deeper and broader support of the development languages. If you look at Spring and what Spring has to offer, it's somewhat limited to some business applications where other vendors in the space are looking at more of a broader approach, looking at Python, looking at Rust, looking at Go, looking at Node.js, looking at Java and JavaScript, all these applications, not just .NET and Java, right? So if you can broaden your approach and have a more adoption across that developer language, you have more value to the developer community. That was a deliberate choice because they were trying to get value out of all the misfit toys from Pivotal. And but I've always felt that the VMware should hire a ton of open source engineers and let them go beyond just trying to build their own quasi-proprietary stack. I think that was part of it. And I brought the same up when we were in one of the same analyst sessions. I think you may have been in that one as well. I asked about why are we not hearing anything about open source beyond like a little, in a picture, a little piece in a picture, like where's your investment, who's here, what other, I think again, they're missing an opportunity because they do contribute to open source. And until we pushed on them with some of the stuff that they're doing in service mesh, they never even brought it up. So I think that to me is an odd, a little bit odd at this point in time that they're almost taking a step back. And what's interesting about that, Rob, is Tanzu is what, 80% open source? Yeah. So it's built on 80% open source, yet they don't promote the fact that it's on open source. Yeah. Yeah. Very AWS-like. Yes. Okay. So what's the, what would you give a probability that Tanzu is here three years from now? It's probably 50-50. Okay, 50-50 is pretty good. Yeah. Coin toss, shot of making it. Well, I think to your point, it's a right or a lower? I think it's higher. I think it's higher. What would you give? I didn't want to interrupt you there, but no, I think that Tanzu in some form is probably more like a 70-30 approach, right? I think you're looking at the adoption of Tanzu and the tech stack that goes with Tanzu into some place, in some way, will be called Tanzu, will be called Aria, will be called all these things that maybe, maybe not, but the tech stack will live. Well, back to sort of the multi-cloud, super-cloud premise, I mean, basically what VMware is betting on is that future growth, which is we're going to solve your cross-cloud problems, come to us, you're a little bit skeptical because you feel like it's narrowed to VMware, but they have betting on that, and that is going to be the incremental revenue opportunity, the growth opportunity for them. If they don't hit that, then it'll become a managed decline business, which they can drive the profitability by just increasing prices, but that's a big bet, and it's not a guaranteed bet, although I would say that in my opinion, VMware is in a better position than anybody else. I mean, I know Red Hat's coming at it with pure open-source approach, but VMware with its huge footprint and the massive investment that people have in it, I think it should be in the poll position as the favor. But I think to Paul's earlier point, it's going after a developer community without having the developer tooling or even we sat in one and it was very clear that they didn't understand the persona that they're trying to target with Tanzu, and that to me, I get that it's part of its infrastructure and platform engineering. They've said platform engineering about five times this week and aren't necessarily tying that all together. Question, if I'm running VMware Cloud on AWS, can I bring in some of that tooling that you're talking about and get value out of it, or is it like a separate room in the house, like the man cave that only the, certain people can go in? Well, again, it depends on if you're saying, hey, I'm using Tanzu on top of that, and then I'm using some of the code creation stuff that AWS has, of course, you could tie that back together and you could have your developers using the tooling, either in Azure or in AWS, that's outside of that. I mean, that is part of the value of VMC. What do you think? Yeah, I think that's a great question. And I like to take that question to more of a business response, right? Like when I look at it in the context of our research, our distributed cloud series research, we see, we ask a similar question, right? What would happen if, what is your biggest challenge if, right? And complexity is always a big issue, right? We see that bubble up a lot every time. So one of the things that I hear a lot from businesses and organizations that are having this challenge as a modernization is that harmonization across the clouds, providing a way that you can have a cloud OS, so to speak, that allows you to work on-prem, hybrid, in your Edge, public cloud, private cloud, doesn't matter, but you have one set of skill gap or skill set that can manage everything across the different ecosystems that you're in. So, yes, you may lose functionality, right? That's a given. With a pure distribution, if you're going on a pure distribution of AWS or GCP or Azure, yeah, you have some very specific functionality you get there. However, remember that when we started the conversation, CIO's number one concern is modernization and CIOs are like, although on the chopping block, if they don't modernize. So they need a path to resolution quickly. Guys, we gotta go. Way to bring the data, Paul. Thank you so much for spending some time with us and thank you, Rob. Okay, we're winding up day three here at VMware Explore 2023. We're gonna go until they kick us out. You'll hear, get out in the background and then we'll leave. This is Dave Vellante for Rob Stretche, Lisa Martin and John Furrier. We'll be right back after this short break.