 Live from Las Vegas, it's theCUBE. Covering Dell Technologies World 2019. Brought to you by Dell Technologies and its ecosystem partners. Hello and welcome to the special CUBE Live coverage here in Las Vegas with Dell Technologies World 2019. I'm John Furrier with Dave Vellante, breaking down day one of three days of wall-to-wall coverage. You have two CUBE sets, big news today and dropping here at Dell Technology Worlds. Series of announcements, cloud mobility, unified workspaces, and then multi-cloud with a watershed announcement with Microsoft support for VMware with Azure. Our guest here is CUBE alumni, the COO, senior leader of VMware, Sanjay Poonan. Sanjay, great to see you. John and Dave, always a pleasure to be on your show. So before we get into the hardcore news around Microsoft because you and Satya have a relationship, you also know Andy Jassy very well. You've been following the cloud game in a big way. But also as a senior leader in the industry and leading VMware, the evolution of the end user computing kind of genre. That whole area has just completely transformed with mobility and cloud kind of coming together with data and all this new kinds of applications. The modern applications are different. It's changing the game on how end users, employees, normal people use computing. Because some announcements here are on there. What's your take on the ever changing role of cloud end user software? Yeah, John, I think that our vision, I mean, as you know, it was the first job I came to do at VMware almost six years ago to run end user computing. And the vision we had at that time was that you should be able to work at the speed of life. You and I happened to be in a plane at the same time yesterday coming here. We should be able to pick our apps up on our devices. You often have internet now even up at 30,000 feet. In the consumer world, you don't lug around your CDs, your music, your movies come to you. So the vision of any app on any device was what we articulated with the digital workspace. We had Apple and Google very well figured out. iOS, later on Mac, Android, later on Chrome. The Microsoft relationship in end user computing was contentious because we overlapped. They had a product to EMS and Intune but we always dreamed of a day. I tweeted out this morning that for five and a half years I competed with these guys. It was always my dream to partner with Microsoft. You know, a wonderful person, my respect there, Brad Anderson, he's a friend. But we were like LeBron and Steph Curry. We were competing against each other. Today, everything changed. We are now partners. Brad and I, we're friends, we'll still be friends, we're actually partners now. Why? Because we want to bring the best of the digital workspace solution that VMware brings, Workspace One, to the best of what Microsoft brings in Microsoft 365, Active Directory, E3 capabilities around EMS and Intune, and combine those together to help customers get the best for any device. Apple, Google, and now Microsoft. That's a game changer. Talk about the impact of the relationship with Microsoft on this one point because is there overlap? Is there gaps? As Joe Tucci always used to say, you can't have any, there's no overlap. If you have overlap, that's a lot of. Better to have overlap than seams, right, or gaps. So where's the gaps, where's the overlap now? We'll get to cloud next. In the end user world, there is a little bit of overlap, but the much bigger picture is the complementarity. We are, for example, not trying to be a directory in the cloud. That's Azure Active Directory, which is the sequel to Active Directory. So if we have an identity access solution that connects us to Active Directory, we're going to complement that. We've done that already with Okta. Why not do that also with Active Directory? Boom, that's clear. Ignore the overlap, look at the much bigger picture. There's a little bit of overlap between Intune and AirWatch capabilities, but that's not the big picture. The big picture is combining Workspace One with EMS to allow Office 365 customers to get conditional access. That's a game changer. So I think in any partnership, you have to look past, I call it sort of these Berlin Wall moments. If the US and the Soviet Union were fighting over like East Germany versus West Germany, you wouldn't have had that Berlin Wall moment. You have to look past the overlaps, look at the much bigger picture, kind of find the way by which the customer wins. When the customer wins, both sides are happy. Tearing down the access wall, letting people get seamless access to the data, big win. All right, cloud computing. Obviously, multi-cloud announcement was Azure, Satya Nutella on stage, which was a surprise. No one knew was coming. No one was briefed on this. It was kind of the hush hush, the big news. Michael Dell, Pat Gelsinger, and Satya Nutella up there. Satya did a great job and really shows the commitment of Microsoft with VMware and Dell Technologies. What does this announcement mean? First, give us your take and analysis of what they announced and what does it mean and impact the customers? Yeah, listen, you know, for us, it's a further, it's sort of like the chess pieces lining up of VMware's vision that we laid out many years for our hybrid cloud world, where it's not all public cloud, it isn't all on-premise, it's a mixture. We coined that term hybrid cloud and we're beginning to see that realized. So we had 4,000 cloud providers starting to build their stack on VMware. We announced IBM Cloud and AWS and they're very special relationships. But some customers of Azure, some of the retailers, for example, like Walmart, who was quoted in the press release, or Kroger's and some others. So they would ask us, listen, are we going to have a way by which we can host VMware workloads in there? So through a partnership now with Virtustream, that's owned by Dell and we will be able to allow VMware workloads to run in Virtustream, Microsoft will sell that solution as what's called Azure VMware solutions and customers now get the benefit of VMware workloads being able to migrate there if they want to or migrate back on the on-premise. We want to be the best cloud infrastructure for that multi-cloud world. So you've got IBM, AWS, Google last month, you knocked on now Azure. Alibaba in China. Last November you announced Alibaba, but not a solution, right? No, it's a very similar solution. It's a VCB solution, very similar to what's announced with IBM and Azure. So is it like your kids, where you love them all equally, or you just mentioned that Microsoft will sell the VMware on Azure. You actually sell the AWS solution. Yeah, there is a distinction, so let me make that clear, because everything on the surface might look similar. We have built a solution that is first and preferred for us called VMware Cloud on AWS. It's a VMware managed solution where the cloud foundation stack, compute storage, networking, runs on AWS bare metal, and VMware manages that. Our reps sell that, often lead with that, and that's a solution that we announced two or three years ago. It's a very special relationship. We have now customer traction. We announced some big deals in Q4. That's going great, and we want that to even grow faster. And listen, AWS is number one in the market. But there are other customers who have Azure, and for the customers who want Azure, very similar. You should think of this as similar to the IBM cloud relationship, where the VCPP partners host VMware and they sell a solution, and we get a subscription revenue result out of that. That's exactly what Microsoft is doing. Our reps will get compensated when they sell at a particular customer, but it's not a solution that's managed by VMware. My correct, you've announced that, I think a $20 million deal last quarter. On VMware Cloud and AWS. And that's an entire deal, or is that the VMware portion? That was an entire deal with a customer who was making a big shift to the cloud. When I talked to that customer about the types of workloads, they said that they're going to move hundreds of their apps on premise onto VMware Cloud and AWS. So that's the type of cloud transformation we're doing. And now, with this announcement, there will be other customers. We gave an example of a few that, and you're seeing certain verticals that are picking Azure, so we want those to also be happy. Our goal is to be the undisputed cloud infrastructure for any cloud. Any cloud, any app, any device. I want to get your thoughts. I was just in the analyst presentation from Dell Technologies, CFO, and looking at the numbers, the performance numbers on the revenue side, non-gap and gap earnings, as well as market share. Dell at scale, it's interesting because Michael Dell when we interviewed him many years ago, when it was all going down, hinted at, look at this benefits at scale. And not everyone was seeing the obvious that we now know of the Amazon scale wins. So scale is a huge advantage. VMware has scale, Amazon's got scale, Azure, Microsoft have scale. Scale is now the new table stakes. Just as an industry executive and leader, as you look at the landscape, it's a have and have not world. You either have scale or you don't. If you don't have scale, you're either an ecosystem partner or you're in a white space. How do companies compete in this market Sanjay? What's your thoughts on that? I think it's John, as you said, there is a benefit to scale. Dell now at about 90 billion in revenue has gone public, and their stock price has done well. Dell, for instance, the IPO. They're the leader in servers. Where's that point? Leader in storage, leader in client computing, PCs, with VMware and many other assets like Pivotal Leaders and others. So that's scale. VMware, about a 10 billion dollar company, fifth largest software company, doing very well, leader in software-defined infrastructure, leader at end user computing, leader in software-defined networking. I think you need the combination of scale and speed. Just scale on its own, you could become a dinosaur, right? And what's the fear that every big company should have that you become ossified? And I think what we've been able to show the world is that VMware and Dell can move with scale and speed. It's like having the combination of an elephant and a cheetah and one. And that, to me, is special. And for companies like us that do have scale, we've to constantly ask ourselves, how do we disrupt ourselves? How do we move faster? How do we partner together? How do we look past these blind spots? How do we partner with big companies, small companies, and the winner is the customer? That's the way we think. And if we could keep doing that, you'll see it. So for example, five, six years ago, nobody thought of VMware, this is even before Dell or EMC, in the world of networking. Quietly, with 10,000 customers, a $2 billion run rate, NSX has become the undisputed leader in software-defined networking. So now we've got a combination of servers, storage, and a networking story in Dell VMware that's very strong. And that's because we move with speed and with scale. So of course that came through in acquisition with NYSERA. Give us an update on the recent acquisitions. Heptio, VeloCloud, what's happening there? Yeah, we've done three that I think are very exciting. Let me kind of walk through them in chronological order. About 18 months ago was VeloCloud. We're really excited about that. It's sort of like the name, Velocity and Cloud. Fast, simple, cloud-based. It is the best solution in SD-WAN. How do we come to deciding that? We went and talked to our partners like AT&T, other service providers, and they were telling us, this is the best solution in town. It connects to the data center story, to the cloud story, and allows our virtual cloud network to be the best software-defined network. You have your existing MPLS, you might have your WAN infrastructure, but there's nobody who does software-defined WAN like VeloCloud. Very excited about that. Cloud Health, we're very excited about that because that brings a multi-cloud management, like sort of think of it like an ERP system on top of AWS or Azure to allow you to manage your costs and resources. What did SAP do? It allows you to manage resources for a materials world, a manufacturing world. In this world, you've got resources that are sitting on AWS or Azure. Cloud Health does that better than anybody else. Heptio now takes our Kubernetes story that we'd already begun with Pivotal and with Google, as you remember, at VMworld two years ago, and adds that because the founders of Kubernetes left Google and started Heptio. So we're bringing that DNA, we've become now one of the top two, three contributors to Kubernetes, and we want to continue to become the de facto platform for containers. If you go to some of the airports in San Francisco, New York, I think it's landing in Heathrow too, you'll see these ads that are called Container Wear. Where do you think the wear comes from? VM wear. And our goal is to make containers as container wear come to you from the company that made VMs possible and VM wear. So if we popularize VMs, why not also popularize the best enterprise container platform? And that's what Heptio will help us do. Talk about Kubernetes for a minute because you have an interesting bridge between end user computing and now cloud. The services, microservices that are coming on are going to be powering all these apps with either data and or these dynamic services. Kubernetes seems to be the heart of that. We've been covering it like a blanket. I want to get your take on how important that is because Pat Gelsinger said in the keynote at VMworld last year, Kubernetes is the dial tone. Is Kubernetes at odds with having a virtual machine or they complementary? How does that evolving? Is it a hedge? What's the thoughts there? Yeah, first off, listen, I think the world has begun to realize it is a world of containers and VMs. If you looked at the company that's done the most with containers, Google, they run their containers in VMs in their cloud platform. So it's not one or the other, it's both. There may be a world where some parts of containers run in bare metal, but the bulk of containers today run in VMs. And then I would say secondly, five, six years ago, people all thought that Docker was going to obliterate VM wear. But what happened was, Docker's become a very good container format, but the orchestration layer from that has not become Docker. In fact, Kubernetes has kind of taken a little bit of the head and steam off Docker, swarm and Docker enterprise. And today it is Kubernetes. It took the steam completely away. I mean, so in some senses, we waited for the right time to embrace containers because the obvious choice initially would have been some part of the Docker stack. We waited as Borg became Kubernetes. You know the story of how that came out of Google. We've embraced that big time and we've stated a very important goal. Heptio and all these moves are all part of our goal to become the undisputed enterprise container platform. And we think in a multi-cloud world, that's ours to lose. Who else can do multi-cloud better than VMware? Maybe the only company that could have done that was Red Hat. Not so much now inside IBM. I think we have the best chance of doing that relative to anybody else. Sanjay, Dave was talking about on our intro this morning, keynote analysis, talking about the stock price of Dell Technologies, comparing the stock price of VMware. Clearly the analysis shows that VMware's a big part of the Dell Technologies value. How would you summarize what VMware is today? Because on the keynote, there was a Bank of America customer. She said, she was the CTO of Renz IT. She says, never mind how we got here. It's how we go forward. VMware's in a similar situation where you've got so much success, you're always fighting for that edge. But as you go forward as a company, there's all these new opportunities that you outlined, some of them. What should people know about the VMware going forward? What is the vision? In your words, what is VMware? I think Pat, myself, and all of the key people among the 25,000 employees of VMware are trying to create the best infrastructure company of all time. We're 21 years young, okay? And I think we have an opportunity to create an incredible brand. We just have to, as you pointed out in the beginning of the show, create platforms. V-Sphere was a platform. NSX is a platform. Workspace One is a platform. V-SAN and the hyper-converged stack of X-ray becomes a platform. If we keep doing that, Kubernetes stuff will become a platform. Then you get platforms upon platforms upon platforms, you create that foundation stone. Now as it relates to Dell, I think it's a better together message. You take VxRail. We should be together the best option relative to smaller companies like Nutanix. If you take VMware together with Workspace One and Dell Laptops, now put Microsoft in the mix, there's nobody else. There's small companies like Citrix, Mobile Line trying to do it. We should be better than them. In a multi-cloud world, there may be other companies like Red Hat. We should be better than them. That said, VMware needs to also have a focus when customers don't have Dell infrastructure. Some people may have HP servers and EMC storage or Dell servers and NetApp storage or neither Dell or EMC. In that case, you still need VMware. And that's the way we roll. We want to be relevant to a multi-cloud, multi-server, multi-storage, any hardware, any cloud, any app, any device. I got to go back to the Red Hat comment a couple ago. Inside of IBM, right? So it looks like a two-horse race here. I mean, you guys going hard after multi-cloud coming at it from infrastructure, IBM coming at it with Red Hat from a PAS layer. I mean, if I were IBM, I'd learn from VMware. Leave it alone. Let it blossom. I mean, we have a very good partnership with IBM. Let me first say that IBM Global Services, GTS is one of our top SI partners. We do a ton of really good work with them. IBM Software, we partner in a number of different areas. Yeah, we do compete with Red Hat with the part of their portfolio that's related to containers, not with Linux. 80% plus of their business is Linux. They've got parts of JBoss and OpenStack that are kind of, you know, not doing so well. But we do compete with OpenShift, that's okay. But we don't, I mean, we can walk and chew gum. So we can compete with Red Hat and yet partner with IBM, that's okay. We just need to be the best at doing container platforms better than OpenShift or anything that Red Hat has. But we'll still partner with IBM. We have to be able to look at a world that's not black and white. And this partnership with Microsoft is a good example of that. It's not a zero sum game. It is a huge market in its early days. Talk about what's up for you now. What's next? What's your main focus? What's your priorities? Listen, we're getting ready for a VMworld now, you know, in August. We want to continue to build momentum and make many of these solutions platforms. So I tell our sales reps, take the number of customers you have and add a zero behind that, okay? So if you've got 10,000 customers of NSX, how do we get 100,000 customers of NSX? You have 19,000 customers of VSAN, which by the way is significantly ahead of Nutanix. How do we make that 190,000 customers, okay? And we have that base because we have vSphere and we have the Dell base, we have other partners. We have, I think, 80,000 customers of end user computing, tens of millions of devices. How do we make sure that we are Workspace One is on billion devices? Very much possible. That's the vision. I think what's resonating for me when I hear you guys, when you hear you talk and we have conversations also when Pat on stage talks about it, the simplification message is a good one and the consistency of operating across multiple environments. Because it sounds great. If you can achieve that, that's a good thing. How are you guys getting it? How are you making it simpler to run IT and the consistent operating environment? It's all about keeping the customer in the middle of this and when we listen to customers, all of these announcements, the partnerships, whether it was AWS, Microsoft, anything that we've done, it's about keeping the customer first and the customer is basically guiding our path. They're kind of, and often when I sit down with customers, I have the privilege of talking to hundreds and thousands of them, many of these CIOs in the S&P 500, I've known for years from SAP to VMware, they'll call me or they'll text me. They want us to be a trusted advisor to help them understand where and how they should move in their digital transformation and compare their journey to somebody else's. So when we can bring the best off, for example, a developer and operations, infrastructure together, what's called DevOps. Customers are wrestling through that in their cloud journey. When we can bring a multi-device world with a digital workspace, customers are wrestling that with that journey. They're trying to figure out how much they keep on premise, how much they move in the cloud. They're thinking about vertical specific applications. All of these are places where if there's one lesson I've learned in my last 10, 20 years of IT is become a trusted advisor to your customers, lean on them and they will lean on you. And when you do that, I mean, the beautiful world of technology is there's always stuff to innovate. Well, and they have to lean on you because they can't mess around with all this infrastructure. They'll never get their digital transformation game and act together, right? Absolutely right. Sanjay, great to see you. We'll see you at VMworld. Whoa, whoa, whoa, whoa, whoa, come on. We got to talk hoops. All right. All right, you're a big Warriors fan, right? We're Celtics fan. We'll be our dream to be able to- Both of you are? This guy's a Palo Alto man. He's a Celtics fan. To have the privilege to go up against the great Warriors, but what's your prediction this year? I don't know, man. I mean, listen, I love the Warriors. I mean, it's a, in some senses, a little bit of a tougher one now that the Marcus Cousins is out for, I don't know, maybe all the playoffs, but I love Steph. I love KD. I love Clay. You know, and many of those guys are going to be, a couple of those guys are going to be free agents. So I want them to do it again. Enjoy it well. Last because I don't see anybody stop it. Hey, Warriors, Celtics, maybe a good finals. That would be fun. They match up. They got to make it through the Raptors though. They match up well. They match up well. That's right. Why Leonard is tough. All right, thanks. All right, Sanjay, great to come on. Sanjay Putin, COO of VMware inside the Cube, breaking down his commentary view on the landscape of the industry and the big news with Microsoft and their other partners, bringing you all the action here. Day one of three days of coverage here in the Cube. We got two sets, a cannon of Cube coverage out there. Be back with more after this short break.