 The Cube at EMC World 2014 is brought to you by EMC. Redefine VCE, innovating the world's first converged infrastructure solution for private cloud computing. Brocade, say goodbye to the status quo and hello to Brocade. Hey, welcome back everyone live here in Las Vegas with EMC World 2012. This is the Cube, our flagship program. We go out to the events, we distract the students from the noise. I'm John Furrier, Founder of Silicon Angle. I'm joined by Coase, Dave Vellante, co-founder of Wikibon.org and we're here with Praveen, the CEO, Akadiraju of CEO of VCE. Welcome back to the Cube. Again, Cube alumni. Thank you. VCE, everyone said VCE's dead, VCE's not happening, VCE's not, well... Here we are. Twitter is supposed to be dead and I run on the weekend, Twitter's dead, dying. So, you know, death has always exaggerated. You guys have been doing great. So I want to just quickly say congratulations. You guys had a lot of success. Give us an update. Some of the successes you guys have done and just some of the notable things since your last talk. Absolutely. First of all, thank you guys for inviting me back again. This is, I think, my fourth or fifth time. I really enjoyed doing the show. The first time we spoke, actually, was VMworld back in 2012, right? And we talked at that time, we were talking about essentially getting to a billion dollars. That was our goal, that was the stated objective. Well, we kind of got past that milestone. In fact, blew past that milestone in 2013. And now that Joe Choudi mentioned it in his remarks, I can also say we're on a $1.8 billion run rate. We're going north of 50%. You know, I'm happy to say that that trend continues from 2013 into the first quarter of 2014. So, you know, fundamentally, the value proposition of VBlock has been accepted by the market and we're dramatically accelerating the deployment of VBlocks. If you kind of take a step back and kind of understand what's going on underneath, you talked to, today morning, David talked about sort of the investment that's happening into the on-prem and the off-prem, right? He talked about two trillion investment on-prem growing at 4%. What is happening is that two trillion of spend, the infrastructure portion of it, is rapidly shifting to the converged infrastructure paradigm, right? So, we are right in the sweet spot in terms of that migration of the infrastructure to converged being one of the early players and given the fact that we have now, you know, over 800 customers in 57 different countries, 2,000 VBlocks deployed, you know, customers, for a lot of customers, we are the safe choice. So, that's really what is powering this momentum that we're seeing and our path to 1.8 and beyond. So, I got to ask you about the trend toward the converged infrastructure and your discipline. So, you've said we are going with a, what we call, we keep on a single managed entity, block of infrastructure. But there's a lot of pressure in the channel. People want to, it's like, it reminds me of my kids, the rules we set for our kids, you know, there's always, you know, we're going to make an exception. How do you not make an exception? Somebody in the channel or even a customer says, well, I'll do business with you. I've got a big fat check, but I want to drop in somebody else's storage or somebody else's compute. How do you manage that discipline? Yeah, you know, I think, so there are a couple of points I'd make there, right? The first thing is in the cloud era, right? The fundamental, one of the fundamental principles is you accept a certain level of standardization in order for you to get the benefits of the cloud, right? So we, when we looked at VCE and the VBlock concept, we said, we're going to standardize on best in class, storage, compute, networking, and virtualization, right? And that's the layer that our customers will have to accept as a standardized platform so we can then deliver to you dramatic agility, really guarantee performance and availability, as well as a shared application platform, top of which you can run as bare metal with VMware or any other application stack, right? So we ask our customers to basically, you know, they're not being really compromised when they accept best in class infrastructure, but that's the level where we draw the standardization. Now, we also believe that you have to maintain a level of integrity in your standards in order for you to deliver the results on a consistent basis, right? So there might be certain opportunities that we walk away from where we have to break that level of standardization because it compromises the ability, our ability to deliver great customer experience. Okay, now, so you've got a billion dollar, billion eight run rate, which is large, growing at 50% a year now. For those of you who follow the hot companies, right? Workday and service now to smoking hot companies. Now, they're software companies, but they're smaller than a billion, but they're growing at 50 plus percent. So you're up there with those really high fliers, which is quite interesting. Now, right now, it doesn't seem like you have a TAM problem, but the Federation has a big appetite. So you've got to expand the TAM, right? And so how do you do that? Maintaining that discipline, do you go beyond, for instance, VMware, talk about what you're thinking on TAM expansion. Yeah, let me talk about our strategy in two pieces, right? There is a product aspect of the strategy, and there's a services aspect of the strategy. This is, in fact, we talk about TAM expansion. The revenue from a services perspective is potentially a higher margin, more stickier and more sustainable. So from a product perspective, our vision initially was, hey, let's simplify the way you deploy infrastructure by bringing together compute network storage and configuring them, testing them and deploying them, right? That worked great. That was sort of what powered us through to the first two to three years of our existence. Then we realized what customers really want is an ability to deploy a simplified data center solution, not just the product, right? Because we found customers coming back to us saying, hey, can you help me accelerate the migration of my SAP workflows? Can you help me stand up an infrastructure as a service in Singapore where I don't have a presence? So we started to basically expand the capabilities that we deliver from integrating just the hardware components to start to integrate specific application status. Replicating the public cloud in a way, yeah. So SAP, VDI, infrastructure as a service, some of the examples of what we do in terms of shipping straight out of the factory, right? So that allows us to basically now, call it TAM expansion, but basically get more of the customer spend in terms of the data center infrastructure that they're trying to deploy, right? Now, the evolution of that for us is to essentially go from a scale up architecture to a scale out architecture. A lot of the technologies you heard, right? David talked about, we're very excited about because we launched a extreme IO based Vblock in September. We're going to integrate the technologies such as DSSD into the Vblock as we go forward. We're also working with Cisco on a lot of their evolution of the UCS platform and the new ACI based network switches. So that allows us to essentially create an architecture that's not only scale up, but also is going to be scale out to mirror what we're seeing, the exabytes of data that's coming on, right? So that's really our vision is to basically create a platform, a shared infrastructure platform built with best of breed blocks that can support any application stack. So we announced that we'd be able to support not just VMware, but also support OpenStack, right? As based on our customer demand. So that's the new aspect of the evolution of our architecture. The second piece of it on the services side, we really took a huge step in 2013. It was a big part of why we were so successful. Services for us essentially grew almost at 100% last year off of a low base, right? And it constitutes well north of 12% of our aggregate bookings and revenue, right? So that's a huge step in terms of our own intellectual property, if you will, where we have experts in the area of convergent infrastructure, helping our customers with the number one problem they have, which is skillset deficiencies as they make this migration, right? So our vision really is to go from creating a best of breed convergent infrastructure to a company that can truly enable and simplify the journey to the cloud, right? That's the way we're thinking about our opportunity going forward. Praveen, I want to ask you about the product market fit you mentioned. Obviously they hit your numbers on Convergence V-Block as validation. Yeah, classic product market fit. Close the book on that, double down. As a CEO, you've got to scale up now. What's your strategy? Give us your thoughts on that because that is clearly the management objective. Internally, how are you guys scaling the organization? And what dynamics are you navigating in the marketplace? Because you have VCE stands for something. There's now Cisco's doing things. Everyone's got these things going on the market. It's changing pretty radically. It's pretty disruptive. So how do you scale in that disruptive environment? You know, just from an organization perspective, from the time I got here, we've doubled the team, right? Number of people were approaching close to 2,000 employees in about 12 different countries. So it's a pretty broad footprint. We opened a development center in Cork in Ireland for our services. We have a significant investment in India, in Bangalore, in addition to our headquarters in Richardson. So the team's been growing. One of the things I like to talk about is the number one asset for VCE. What truly differentiates us in the marketplace is our people. You know, we're creating sort of the new DNA, right? The fused DNA between networking, software, storage, and compute to really create sort of that next generation IT skill set, which is the reason why our customers value our employees so much, whether it's a salesperson or a presale. Now you talked about sort of some of the dynamics in the market, as we just discussed earlier, right? The opportunity for us to enable that journey to the cloud is profound, right? It is the single most biggest challenge that a lot of our customers face. Look, I mean, the bottom line for us is the reason we win is because of the customer experience. And customer experience is what really guides our decision making in terms of the technologies. Now Cisco's announced a certain set of acquisitions, technologies, whip tail, et cetera. There's an aspect of that on the server side, which is very interesting to us, which will be part of UCS, right? From a storage flash array perspective, we've released an extreme IO based VBlock, right? That's our strategy there. Similar on the networking side, the ACI based Nexus switches are best in class. Customers are really resonating with that story of managing software and hardware together. So we're making choices based on guided by our customers. Now at the same time, at the end of the day, VBlock is nothing but a huge computer. It's a next generation mainframe. So if a customer chooses to run a different software on it, they're able to do so, right? That's again, talk about the standardization layer. So our real primary focus is to maintain that customer experience as we assimilate the new technologies and be able to deliver sort of a unique value proposition. And to that point, the next generation mainframe, when I first saw Converse Infrastructure, I said, okay, this is an evolutionary technique. It's a natural evolution, particularly the computer and the networking side. What makes or does Converse Infrastructure become revolutionary versus an evolutionary infrastructure? And does it need to be? Yeah, I think it's just a, it's a dramatically simpler way of building the next generation infrastructure in the data center and the cloud. Technology-wise, the revolutionary innovation, if you will, is happening in the core components. Inside. It's vibrant. Flash. It's flash. It's software-defined networking, right? So those are things which are then incorporated into Converse Infrastructure and we extract that complexity for our end customers. Praveen, thanks so much for coming on the queue. We got a break here, but I want to give you the last word. Share the folks out there. Why is EMC World 2014 so important this year? Obviously, the big news with DSSD, just the product transformation, people getting promoted, Jeremy's now president, got a new CMO, you guys are kicking butt, taking names, but why is this moment in time so important? You know, I think Joe talked about sort of this transition to the third platform. And you know, that consists of various steps, right? Converse Infrastructure is a foundation on top of which that third platform is going to be built. And you know, a lot of the technologies that are happening here, you know, the kind of data center awareness, and it's one of these unique shows where you get a very comprehensive view of the evolution of the data center and the cloud, everything from big data to infrastructure and that's what makes it unique. Okay, Praveen, thanks for coming on theCUBE. We'll be right back with our next guest live in Lost Space with EMC World 2014. We'll be right back. Nice job. Thank you guys. Bye.