 From Las Vegas, it's theCUBE. Covering VMworld 2018. Brought to you by VMware and its ecosystem partners. Welcome back to theCUBE. We are at day three, almost the end of day three at VMworld 2018. I'm Lisa Martin with my esteemed co-host Peter Burris. First time we've been paired up in three days, Peter. Nice to see you. Good to see you again, Lisa. And we're joined by a CUBE alum, Lee Caswell, the VP of storage products for VMware. Lee, welcome back to theCUBE. It's so nice to be here again. Nice to see you. So you guys go way back. We do. Much to Lee Chagrin. But I got to tell you, one of the things that I'm really interested in, Lee, I'm very excited to have here is kind of the penultimate CUBE thing, is this VMware has been, this VMworld has been really buzzing. It's been really exciting. Has been, yep. Pat Gelsinger really set it up and bought a really coherent story together about how VMware's a stronger, more bilateral relationship with AWS. That's great. Sustaining those non-DEL tech partnerships. That's great. Introducing new capabilities, especially how more services are going to come down onto VMware on premises, because there's going to be a lot of data and a lot of applications that require that. Now, big vision makes sense. Certainly aligns with our research, but somebody's got to make it real. Right. So what's happening? I mean, that's your job. What do you see is going to happen over the next year with VMware customers as they try to realize this great vision that Pat put forward? You know, I think Pat did nail it in the keynote, right? And that really sets the stage for a unified story, right? We started with this digital foundation, right? The idea that, you know, what you're buying into is a way to digitally transform. And the most important decision that a customer will make over the next five years is buying into the full stack, not individual piece parts. And I think in the past VM worlds, we heard about vSAN and vSphere and NSX and all, I mean, there's just a lot of pieces, right? But this year it all came together in a way where you looked at a common operational model all the way from edge to core to public cloud. And then on top of that, abstracting the applications from virtualized, you know, databases all the way into cloud native and containers. That unified message, right? Above the stack, below the stack, buy into the stack that's going to give you that investment protection. That was a key message. Yeah, well, let's build on that, right? Because the analyst thing in me is to naturally say, now, Lee, you're getting ahead of yourself. But the simple reality is what customers want is they want that cloud experience wherever the data or wherever the workload requires it. And when you buy into AWS, you are buying into a stack. And it's that stack that provides that cloud experience. So the real goal here is to bring the cloud experience through a VMware mode down to where it's required so it really is a stack place. So again, what are customers going to do in the next year? Make that decision, what else are they going to do? You know, first off, what we're seeing is, you know, the HCI and, you know, with VCN, right? The fastest growing product in all of Dell Technologies now, we're seeing just customers deploy on-prem at speed, in scale, right? We have new data showing that 54% of our customers today are running clusters that are greater than 11 nodes, right? Think about that for a minute, right? It's not a VDI, like, you know, little cluster off in a corner. This is getting in that mainstream data center. And that means that this is no longer, HCI is not like a point product play. It's a stack play. I'm going to go buy into the stack. Some customers are not sure what they're going to do around public cloud. They're not sure, right? And yet what they know is that they're investment protected where they have a common operational model protected for them and they can anticipate the cloud. Others are in the cloud already. You saw the RDS announcement. Like we're bringing cloud like operation back into on-prem world, right? So we're seeing this as a bi-directional world. The idea that somehow people were going to flock and it was a mass exodus to the cloud. Everybody's got to know that. Not happening there, right? So this is a distributed environment. So the first, I got to pick the stack. But second, the beauty of HCI is if you choose to not utilize all this cloud, you still got a really nice flexible platform, but HCI is also going to be the target for whatever stack you bring down. Would you agree with that? Yeah, so what you think about it is, so vSAN, for example, right? 50,000 customers now, right? Half the global 2000 running on vSAN. You started thinking, well, if I put that on-prem, right? And now it's vSAN also is the VMC on AWS. It's the same stack, right? Well, now I've got this natural affinity, right? To say I can have this operational model, whether it's DR into the cloud, migrating apps into the cloud. All of this, right, comes where we're basically helping customers extend to the cloud and then go back to the edge as well. So exciting times. So, go ahead, Lisa, sorry. Thanks, Peter. So VP of storage products, you must be with, meet with customers weekly, if not almost every day. You bet. I'd love to understand, you know, you talked about, sort of you, Peter, Pat Gelsinger's message on Monday. We've heard that from, on both sets, all three days. It was a really cohesive message that really synced. How do you work with customers so that that message and the technologies are, as you were saying, together, really coming together this year? Yeah, you know, so we have 500,000 vSphere customers to work with who know vSphere and know vCenter. What they, you know, the original value, the magic of VMware was I consolidated servers, right? So I could go and manage them as virtual servers instead of physical. And I freed up enough economic value, right, that I had lots of money left over. It was a fantastic, right? First act. VCAN is the second act. What we're doing, and this is where we're acting, act now, use a server refresh to go and upgrade your servers and vSphere into HCI with vCAN, right? And whether you run that as a software with servers, you can run it as VxRail with our appliance, right? Just past a billion dollars in sales, a billion dollar run rate. Or whether you run that in the cloud, you've got the leverage, right, of an operational model that now says, from a VM or container, now I just look at that and I have policies that basically say CPU and RAM, always had that. But now I've got IOPS capacity. And now what happens? I need to have security policies that I apply similarly because those VMs are not going just across a cluster. They're going across geographies and into the public cloud. So instead of having a security model, right, that's a fortress around each one of those locations. Instead, what I do is I give you security policies that you can take with you to another location, right? And so we're redefining how security is applied in a hybrid cloud world. But one of the important things that Pat talked about, and I know it's going to be a major feature of the strategy over the next couple of years, is the idea that through NSX and related technologies, you can introduce greater segmentation. So you can do security both on a broad scale but also security down much closer to the data so you can get that zero trust relationship that you need. And close to the app owner, right? One of the things is we're bringing storage back into the servers, right? Is we're actually bringing the storage attributes next to the application. And similarly, security, right? Now that it's near the app owner, it's the app owner who knows the most about how the security should be assigned to the security to each app, right? So now I've got that model, and if you look at recent investments, well, we acquired VeloCloud. Well, that's about SD-WAN out to the distributed environment, right? We acquired service assurance, right? Now we've got 5G monitoring capabilities. I mean, all of these cloud health, right, is now monitoring across multi-cloud, right? It's really a way of breaking down silos wherever they exist. Breaking down storage and, you know, compute, brought those together. Now we're bringing down whether it's on prem, Edge, looks all the same, right? Thinking about basically now things like data protection, one of our announcements of the show. New file services. We announced a beta for that. PKS Persistent Storage. It's great, Chad's over there. I thought he was going to whoop when I said that but you know, that'll have to wait but you know, all of this new functionality, right, is a way to break down silos and give you more operational speed, which is what people need to go and basically use infrastructure to drive revenue. Without sacrificing too many options. That's right. You're still within the stack. Yeah. But you have a lot of deployment options based on cost, based on physical location, any number of other factors. You know, one of the questions we hear sometimes, so what's the biggest obstacle? What's holding people back? Well, it's an organizational issue, right? We're moving, you know, hyperconvergence is not about us. It's about our customers. We're hyperconverging their teams, right? Now we got to have a team, right? That looks like a converge team and what you get is you get a more efficient team of generalists who can go and basically speed, basically provisioning, debugging, all of that happens more quickly, right? So it's just an interesting new operational model. As customers do that, they probably start when industries are in stress and then what you're finding is, as industries at scale, companies like central and major banks, right, are running tens of petabytes of storage now on VSAN. I'm curious, Lee, your thoughts on how is VMware helping customers really evolve their culture? Because that's essential, right? It is. And that's not easy to do. You've got some massive customers. I imagine, you know, decades of history, change isn't easy for anybody. Is there, what kind of assurance or comfort does VMware and your team give to your customers about, this is why you need to do this? And here's our recommendations for helping your team understand the next steps we have to take. So our business is more profitable and our customers are happier. Yeah, I mean, there's a set of certifications around applications, right? Two thirds of our customers now run databases on all flash. You're like, wow, like that's really interesting, right? These are mainstream applications, right? That you think, hey, you know, these would have been storage-based products like Classic Shared Storage. Now, Classic Shared Storage is going to be there for a long time. But the way I describe this, it's a little bit like, remember when we had travel agents and used to go and say, hey, listen, I want to go to pick a spot, right? I want to go to Heathrow, right? On the 23rd of September, and you know, give me a flight information, they say, hey, I'll get back to you in a few days, right? And here's the information. Now, the first time you went to go and basically book your own travel, boy, it was a little scary, right? You're like, hey, did I get the right date, right? And what happens if I did it wrong? And how does that work? So we're giving all sorts of tools, right? The latest four releases of vSAN have been around making sure that customers have all sorts of guardrails, best practices, right? We're making sure that, hey, when you do that, it says, you know, you better release at the same time. So we've got all these new tools to basically help customers get comfortable with the new operational model. I think it's a great question, Lisa, and I want to point one other thing out about VMware. VMware's been through this before, right? So if, as an old IT hack, I can tell you that, you know, 15 years ago, you had storage administrators, server administrators, network administrators, and then sometime around 2008, 2009, this new job popped up, the VM, the virtual machine, the VMware administrator. And that caused an enormous amount of dislocation in a lot of organizations. So we're doing the same thing again. I got to believe that you guys have some visibility in how that's going to play out, even though, as you said, it's going to be perhaps a more extreme version of that. But you have kind of shepherded a lot of shops through this before. You know, an early person who was mentoring me once said, if you want to be successful, give a career path to your customers. And so you think about that, right? So what happened, you know, the server admin was almost dead, right? And before the advent of ESXi, right? There was almost nothing left to go do. Then all of a sudden there was the VI role, right? Virtualization admin right now became a certification and I went and I got a raise, right? And I got more capabilities, right? And now we're offering the same thing, I can take storage into that mix. And from the VMware perspective, now we're offering cloud. And if you think about from data people like us, right? We think about it's the data interaction with the cloud that's really a strategic engagement about, how do I think about that first bite of data? Because they don't move very fast, as you know, if you've ever emailed a video file, right? There's not, you know, it's not free to move data. And there's sovereignty issues around where it's located, right? So we believe this is going to be a very distributed data center environment. There's going to be a lot of need for network configuration and security wrapped around that. And then if you have a common stack across all that, we're going to give customers the, you know, the freedom to go look at applications instead of downed infrastructure. VMware helping customers get comfortably uncomfortable so they can evolve as you guys have. We'll leave. I like that. You can use it, comfortably uncomfortable. All right, I will. Thanks so much, Lee, for stopping back by theCUBE and your energy on day three, awesome. Sanitators. So good, thank you so much. Our pleasure. And for Peter Burris, I'm Lisa Martin. You're watching theCUBE's Continuing Coverage of the Emeralds of 2018 from day three. Stick around. We'll be right back.