 We're entering the fourth great era of VMware executive management. From its beginnings in the late 90s as a Silicon Valley startup, it's five founders quickly built the company. And it ended up as one of the greatest acquisitions in the history of enterprise tech when EMC bought VMware for $625 million. As a public company, but still under EMC's governance, Paul Moritz was appointed CEO in 2008 and set the company on a journey to build what he called at the time the software mainframe. Meaning the company's platform would run any application at high performance with low overhead and world-class recovery. Pat Gelsinger took over the CEO reigns in 2012 and through organic investments and clever M&A set a course for the software-defined data center. And after some early miscalculations in cloud, realigned the company strategy to successfully partner with hyperscalers and position the company for the multi-cloud future. The hallmarks of VMware over the course of its history have been great engineering that led to great products, loyal customers, and a powerful ecosystem. The other telling attribute of VMware is that CEOs have always had a deep understanding of technology and its latest CEO is no different. It's our pleasure to welcome Ragu Raghuram back to the cube, the fourth CEO of VMware. And yet another Silicon Valley CEO graduated from the IIT. Ragu, great to see you again and congratulations on your new role. Thanks, it's great to be here. Okay, five months in, first 100 days, what were you focused on, that journey to become the Switzerland of multi-cloud? Tell us about your early experience as CEO. It's been fantastic, all our customers, all our employees, all our partners have been very welcoming. And of course, I've given me great input. What we've been able to do in the last 100 days is to really crystallize the strategy and focus it around what I'm sure we're going to be spending a lot of time talking about. And that's about the multi-cloud era of computing that most enterprises are going to go through over the next decade. And so that's really what I've been up to and you'll see the results of that in next week's VMworld. And where we'll be talking about the strategy and some product announcements that go along with the strategy. And so it's a very exciting time to be at VMware. Yeah, I mean, I referenced it in my intro. It's almost like the light bulb went off when VMware realized, wow, this cloud build out is just an opportunity for us. And that's really what you're doing with the multi-cloud is you're building on top of all the infrastructure that the hyper cloud vendors are putting out there. Maybe you could talk about that opportunity and what customers are telling you. Yeah, here is how I describe what has happened in the industry, right? And what will happen in the industry. So if you look at the past decade as cloud became a mainstream thing, most customers picked a cloud, they built their first digital applications into it, the ones that serve their mobile users or end users with digital products, and that worked great for them. Then they stepped back and said, okay, how do we modernize everything that we're doing as we become a digital company? And when you go from 10, 15% of your portfolio to 100% of your application portfolio being modernized, what has to happen is you've got to go from figuring out, okay, am I going to put everything in one cloud to what is the application need and how do I put it on the right place? At the same time, the industry has also evolved from being predominantly supplied by one cloud provider to multiple cloud providers. At the same time, thanks to companies like VMware, the data center has been transformed into a private cloud. The edge is growing up to be its own location for a cloud. Sovereign clouds are going. So truly what has happened is it's become a multi-cloud world. And customers are saying, in addition to just being cloud first, I want to be cloud smart. And so this distributed era of computing that we are entering is what we are seeing in the industry. And what VMware is trying to do is to say, look, let's provide customers with the fastest way of getting to this multi-cloud era of computing so that they can go fast, they can spend less. And most importantly, they can be free. In other words, choose the right application, right cloud for right applications, and have control over how they deploy and use their applications and data. That really is the strategy that we are putting in place. This is something that we've been working towards in the last couple of years. Now I'm accelerating that and making that the main piece of what VMware is doing. In order to do that, we have a great opportunity to take partner even better with all of our cloud provider partners. And that's where the Switzerland of the industry comes in. Without impending spin especially, we have great partnership with the cloud players, great partnership with the infrastructure players. We truly can be a neutral partner to the customers as they look at all these choices and make the right choices for their applications. So I want to ask you about this multi-cloud. When the early multi-cloud narrative came out where I go, I was saying, look, multi-cloud is really multi-vendor. You got workloads and apps running on different clouds. And then increasingly the promise and your promise is, we're going to abstract the underlying complexity of those clouds. And we're going to give you an experience, whether it's on-prem, hybrid into a cloud, across clouds, eventually out to the edge. It's going to be a singular, substantially identical, if not identical experience. And we're going to manage the whole kit and caboodle. How, where are we in that, first of all, is that the right way to think about it? Where are we in that sort of transition from plugging into a cloud? I'm compatible with the cloud too. It's a singular sort of VMware cloud, if you will. Yeah, so I want to clarify something that you said, because this tends to be very commonly confused by customers. I use the word abstraction. And usually when people think of abstraction, they think it hides capabilities of the cloud provider. That's not what we are trying to do. In fact, that's the last thing we are trying to do. What we are trying to do is to provide a consistent developer experience, regardless of where you want to build your application, so that you can use the cloud provider services if that's what you want to use. But the DevSecOps toolchain, the runtime environment, which tends out to be Kubernetes, and how you control the Kubernetes environment, how do you manage and secure and connect all of these things, those are the places where we are adding the value, right? And so, really, the VMware value proposition is, you can build on the cloud of your choice, but providing these consistent elements, number one, you can make better use of us, your scarce developer or operator resources and expertise, right? And number two, you can move faster. And number three, you can spend less as a result of this. So that's really what we are trying to do. So I just wanted to clarify the word abstraction. In terms of where are we? We are still, I would say, in the early stages. So if you look at what customers are trying to do, they're trying to build these greenfield applications. And there is an entire ecosystem emerging around Kubernetes. There is still Kubernetes is not a developer platform. The developer experience on top of Kubernetes is highly inconsistent. And so those are some of the areas where we are introducing new innovation with our Tanzu application platform. And then if you take enterprise applications, what does it take to have enterprise applications running all the time, be entirely secure, et cetera, et cetera? That's where the VMware cloud assets that are traditionally vSphere based come into play. And we've got this now in all of the clouds, but it's still in the early days on Azure and Google, et cetera. And then how do you manage and secure those things? Again, we are in the early days. So that's where we are, I would say. Yeah, thank you for that clarification. I want to sort of come back to that and just make sure we understand it. So for example, if I'm a developer and I want to take advantage of, let's say, Graviton and build an app on that. So maybe it's some kind of data intensive app or whatever it is. I can do that. You won't restrict me from doing that. At the same time, if I want to use the VMware management experience across all my clouds, I can do that as well. Is that the right way to think about it? Yeah, exactly. So the management experience, by the way, this is the other thing that gets missed in the VMware dialogue, because we've been so phenomenally successful with vSphere, so there is a misperception that everything we are doing at vSphere today works only on top. So everything we are doing at VMware works only on top of vSphere. That's not the case. Take management, for example. Our management portfolio is modular and independent of vSphere, which means it can manage the Graviton application that you're building. It can manage a traditional vSphere-based application. It can manage an edge application. It can manage VM-based applications. It can manage container-based applications. So it's truly an overall management layer. So that is really what we are trying to do. Same thing with our Kubernetes example. So our Kubernetes control plane allows you to control these Kubernetes clusters, whether the clusters are utilizing Graviton or whether the clusters are utilizing vSphere-based Kubernetes environments. OK, that's great. So it's kind of a setup question, because my next question relates to Project Monterey, because I've always said when I write about these things, when I saw Nitro, I saw Graviton, I saw Project Monterey, I said, ah, everybody needs a Nitro or a Graviton, because new workloads are coming. It's not just the x86 can handle everything anymore, SAP, whether it's SQL Server, whatever. We've got new workloads that are coming, AIML, data-intensive, edge workloads, et cetera. Is that how we should think of Project Monterey? Where are you in Project Monterey? Why is it so important? How people understand that? Yeah, Project Monterey is super exciting for a couple of different reasons. One is, in its first iteration, and we've announced Project Monterey, and last year, we've continued to build it, we're making great progress, along with the hardware partners that we are working with. In its first iteration, it allows some of the functions that you would expect in the software-defined data center to be offloaded into these Monterey processors, these SmartNIC processors. So what that does is it clears up the core CPU for other application functions. So you get better scalability, more resource utilization, et cetera, et cetera. The second thing it does is because some of the software-defined data center functions are done in the SmartNIC, it gets accelerated as well, because it takes advantage of the special accelerators that are there, security functions, manageability functions, networking functions, et cetera, et cetera. So that's that. What you're alluding to is, overall, it's the vSphere, the ESX hypervisor componentry itself, that's moving into the specialized processors, which allows the hypervisor to be built into these SmartNICs, which means the main CPU can be an Intel CPU, it can be an AMD CPU, it can be an ARM CPU, it can be whatever it is you want in the future. So it truly enables multi-CPU heterogeneous computing. So that's why this is exciting. And of course, because it is vSphere, it can happen in the data centers, it can happen in colos, it can happen in sovereign clouds, it can happen in the public clouds all over a period of time. And potentially the edge, I would presume, in the future. Sorry, yeah, that's a great point. Thanks for pointing that out. In fact, the edge is one of the most important places that will happen, because we need these low latency applications, such as in the telco case, for example, right? Or we need these applications that have specialized processing required, if you're setting up a cashierless store and you need to process and you need a lot of inference engines. So Monterey helps with all of those things. I want to make sure our audience understands this, because the Software Divine Data Center was awesome. But it also created waste in the sense that you have all these offload functions in storage and networking and security running on x86 processors, which may not be the most efficient way. So emerging architectures around ARM might be less expensive, maybe more cost effective, lower power. Maybe they do memory management differently. So there are these offload use cases. But as well, we talked about the edge. There could be a lot of edge use cases that are whatever, whether it's ARM or NVIDIA, et cetera. So now you're driving that optionality for customers so you can support more workloads of the future. Yeah, yeah. So this is exactly, if you think about you in Europe when you talked about VMware's evolution, VMware's core DNA has always been to master heterogeneity, right? And what we are seeing is this world of heterogeneous hardware coming alive, right? You talk about processor heterogeneity, I mean, including GPU chips and so on. There is a memory architecture heterogeneity, there is storage architecture heterogeneity. And so the idea is that regardless of what you use, how do you provide the best workload platform and a consistent way of managing all of these things and reducing the complexity while gaining the efficiency benefits and the other benefits that you talked about. So speaking of heterogeneity, that brings me to Tanzu. You know, early on people thought, oh wow, containers, that's going to kill VMware. This is the opposite happened. You guys leaned in as you have as a sign of great leadership these days, you don't get defensive, you just, you know, the trend is your friend, as they say. Give us the update on Tanzu. Why is that so important to the future? Yeah, so if you look at any enterprises portfolio, they are looking at it and saying, look, there is a whole set of applications that I need to modernize. And now the question becomes, how do you modernize these applications in a way that it is essentially done with these microservices architectures and so on and so forth. In that context, how do I maximize the developer productivity and provide a great developer experience because there is not enough developers in the world to modernize every application that's in every enterprise, right? So Tanzu is our answer to help enterprises modernize their applications and deliver in a way that makes the developer very productive on the cloud of their choice. So that is really the strategic intent of Tanzu. And the core building block for Tanzu is of course, Kubernetes. As you well know, Kubernetes has become the common infrastructure abstraction across plots. So if you want portability for traditional VM-based applications, you use vSphere. If you want portability for containerized microservices applications, you assume Kubernetes. That's how companies are thinking about it. And so that's the first thing that we did. Now the second is you've got developers building applications all over the place. So now just like you used to have physical server sprawl and now on then VM sprawl these days you have cluster sprawl, Kubernetes cluster sprawl and Tanzu mission control affects as a multi-cloud multi-cluster Kubernetes control plan works on EKS and everything else that some of the some. The third part of Tanzu is the developer experience. And we have introduced Tanzu application platform which is really focused on delivering a great developer experience on top of any Kubernetes. So that's really how we are building out the Tanzu portfolio. And then of course we got spring and as you well know, a majority of enterprise applications today are Java and if you want to modernize Java you use Spring Boot. And so we had tremendous success with our Spring Boot technology and our start.spring.io capabilities and so on and so forth. So that's the entirety of the Tanzu portfolio. It's multi-cloud, it's Kubernetes agnostic. Of course it runs great on vSphere but it's really the approach of making developers productive in the enterprise. Awesome, thank you for that. I know we're tight on time but it's like speed dating with you, Ragu. So I'm going to go on to another topic, really important topic is security. You've made obviously some big acquisitions there, things like carbon black. You've got a lot of stuff going on with endpoint, with end user computing. I'm first interested in sort of how you organize. It looks like you're putting security and the networking piece together. And then what's your swim lane? It seems like you're focused obviously on your infrastructure. You're not trying to be all things to all people. Help us understand your strategy in that regard. Yeah, I mean security is a massive space, right? And you covered very well and hundreds and thousands of security problems that the customers want to be solving. What we are focused on is how do we simplify the security problem for our customers? And we are doing it through three ways. The first one is we are baking security to the platforms that customers use for us, right? Whether you're talking about our vSphere, our workspace one, our container platform, et cetera, et cetera, right? Cloud platforms. So that's the first thing that we're doing. The second is we are putting, bringing together, we're taking an end-to-end view of security, which is everything from an end user connecting from home to the corporate network or SaaS applications to the Windows devices they're using to the data center applications they're using to the cloud, right? So we're taking a holistic view of security. So which means we want to combine our network security assets with our endpoint security assets with our workload security assets. That is why we bought all of those things together under one roof. And the third is we are instrumenting all of these and collecting signals from all of these and pulling it into the cloud and turning security into a machine learning and the data problem, right? And that is where the carbon black cloud comes in. And by doing that, we are able to provide a holistic view of where a customer security posture, right? And these sensors can be on VMware platforms or non-VMR platforms, et cetera. And so that's really how we are approaching it. I mean, there is the emerging industry term for it called XDR, you might call it that, right? So that's really what we are trying to do. Outstanding. My last question, and I know we got to go. You mentioned the spin, that's happening in November. That's an exciting time for a lot of reasons. I think the ecosystem, emphasizing your independence, but also gives you control of your balance sheet. Regaining control of your balance sheet tongue-in-cheek there. But it's important because all this cloud build out this multi-cloud, exposing the primitives, leveraging the primitives and the APIs of these clouds, making them identical across all these estates, that's not trivial. And you're obviously going to need resources to do that. So maybe you can talk about that and how you see the future playing out, organic, inorganic, maybe a little lemonade in there. What's your approach? How are you thinking about that? Yeah, so we are very excited with the impending spin, which, like you said, is on track to happen early November. And if you think about the spin, there are three aspects that we are excited about. The first aspect is we have a great relationship with Dell Tech, the company, right? And what we have done is we have codified that into a framework agreement that covers the gold market and technology collaboration. And we are super excited by that and that baselines against what we do today. And that has incentives on both sides to continue to grow that tremendously. So we're going to continue being doing that and Dell's going to continue being a great partner. At the same time, from a partnership point of view, we are truly going to be a Switzerland of the industry. So previously companies that were otherwise literally more competitive with Dell, now no longer have that reservation and partnering very deeply with us. And thirdly, like you said, from a capital structure point of view, it gives us the flexibility to use, to do M&A should we decide to do so in the future, right? And use both equity and cash for M&A. So that's the capital structure, flexibility, the Switzerland positioning and the continuing great relationship with Dell. Those are the benefits of the spin. Love it, the partner ecosystem has always been a source of innovation. It's a big part of the flywheel, the power of many versus the resources of one. Raghu, thanks so much for coming back in the queue. Best of luck. I'm really excited for you and for the future of VMware. Thank you and thanks for all the great work that you do and look forward to continuing to read your great research. Appreciate that. And thank you for watching theCUBE's continuous coverage of VMworld 2021. Keep it right there. Thank you.