 Hello everybody, welcome back to our live coverage of VMware Explorer 2023. I almost said VMware World. VMworld, Rob. Stretchy, Dave Vellante. Excited to be here. We're at the Venetian, which is probably the best place to have a conference. We got double sets, it's been amazing. Two days, we're on day two, we'll be back tomorrow. Brendan Kincaid is here, he's the Vice President for ISV Go-To-Market Technology and Hybrid Cloud Partnerships at IBM. We're talking partnerships. Luis Mesa is Senior Director of Strategic Partnerships at IBM. Partnerships here is the operative word. Gents, welcome to theCUBE, good to see you. Well, thanks very much, Dave, great to be here. Yeah, so VMware, you're welcome. VMware, obviously, it's about their ecosystem and they need partners like IBM because you take it to market, you've got a huge install base, you got chops in so many different parts of every industry. And you've been partners with IBM for, I mean, with VMware for a long, long time. We had, the partnership with VMware goes back 24 years, close to 25 years, I believe. IBM was the very first OEM of VMware technology. We were also the first to bring VMware onto the public cloud. So that, I think it was a big announcement about that in like 2016. We were here. Yeah, and ever, and since that time, the business has just blossomed, right? The partnership itself has blossomed. As IBM has sharpened our own focus around hybrid cloud and AI, which we consider to be two of the most transformational technologies of our time, VMware has a very similar strategy. We've been partnering with them on many steps of that journey. And I think that's what makes the relationship beautiful, right? To highlight, we have a joint mission, right? To make hybrid cloud, multi-cloud and AI a reality in the enterprise, right? And behind that, we've made significant joint investments, right? In engineering, in go-to-market, right? And even in customer experience. So super excited to be partners with IBM, very excited. I think we've done something very unique in the industry, which is we established what we call the Joint Innovation Lab. And that's allowed us to continually innovate, to continually take our investments, innovate in new offerings, new services, new technologies that then become foundational in the platform that we bring to clients. So, you know, three big themes here, right? Broadcom, multi-cloud, AI. Forget Broadcom, the future, we'll see how that all goes. I think it's going to go just fine. But multi-cloud is evolving. Obviously, you guys are a big, big, big part of that. Multi-cloud and hybrid cloud, you know, kind of one in the same. We just call it super cloud. And, but it's evolving in the sense that it historically has been, okay, I got stuff running on different clouds. Now you're trying to create that experience. I don't want to use the S-word seamless, but an abstracted experience that's much more common across the clouds and on-prem. So you have a shared vision in that regard. And this Joint Innovation Lab has supported that, accelerated that vision? Yes, absolutely. I think we've done close to 25 different projects. Some of those projects have resulted in some of the big foundational plays. For instance, the basis for IBM Cloud for financial services, the initial version of that ran solely on VMware. And all that came out of the Joint Innovation Lab. We created something called IBM Cloud for VMware Regulated Industries. So very specific, very high availability, the ability to do stretch vSAN clusters across a multi-zone data center. So there were some unique capabilities that we were able to kind of lay down and then build upon that. I mean, just to piggyback on that, another innovation that we're announcing here at VMware Explorer US that came out of the Joint Innovation Lab was VMware as a service in a multi-tenant environment with vCloud director. That's right. That's a very unique solution. It'll be available, I believe GA in the next 90 days, and opens up cloud with VMware in a unique way. We gotta unpack that. Yeah, so wait, roll that back. Multi-tenant in the same tenant or multi-tenant just cloud in general? I mean... It's a multi-tenant cloud. Last year at VMware Explorer Barcelona, we announced our single-tenant VMware as a service on either cloud. Now we have multi-tenant. It's basically a shared environment. Okay, so I mean, but again, part of that has been, I mean, VCD has been around for quite some time. I mean, so, but that's new to IBM is what you're saying. It's new to IBM. So it's, I would assume, allows customers to have better ROI on moving into that. Yeah, absolutely. It can move differently, right? So it allows you to consume AVM versus having to make a big investment. And it's managed, right? It's as a service. So a lot of customers these days, and we saw this kind of come out of COVID where there were staffing shortages, right? There was a real kind of a labor bottleneck. And so they were going, well, can you run it for us? And the answer is, yeah, we can. When you think about, you were talking about the IBM financial cloud and the special situations there and the kind of resilience you need. I know you're not ready to announce anything, but, you know, VMware announced private AI and they have a lot of work to do, in my opinion. So you guys get on that. So. And you can help them out in that innovation lab. So. Because you've got AI chops. You've got, you know, Watson X. I would say, yeah, IBM is a company. We really sharpened our focus on to AI and hyper cloud, as I mentioned. And, you know, Watson X is resonating with clients. Watson X dot AI dot data dot governance. You know, our approach has been to be open, trusted and targeted with our AI. Trusted being a key, key consideration because you need to, in the enterprise clients, you need to have a secure environment that's also auditable back to the source of the data. Right? What are the sources of the data? How do I protect my IP, right? If I'm putting data into a model, is it becoming co-mingled with others IP? So having that governance aspect and being trusted, being able to run on premises, as well as in the cloud, also in a hybrid scenario is, I think, truly unique. And so, you know, we've done this partner, we've had such a similar kind of parallel strategies. There's a lot of, I would say, synergy, there's a lot of give and take between our product teams, as well. And I think you'll see a lot more from us together. How much of your customer conversations right now are AI? And it's got to come up in every conversation. And they must be asking you, can you bring this, because, customers telling us, it's split down the middle. I think Raghu's numbers were right on. They're saying 50% of our AI workloads are going to be in the public infrastructure, 50% in private infrastructure. Maybe the edge is separate from that number, who knows. But they want to trust their AI and they want it to be in their crown jewels on-prem. Yes. Or if they want to put it in the cloud, they want it to be trusted there, too. Or they're going to the cloud, training the models and bringing the models back on to-prem or on to the edge. You guys, I think, just outlined the perfect opportunity. We probably are not ready to announce everything, but you can imagine putting those two together where we're headed. We'll take that as a yes. No, it's okay. And so, okay, but so, there's so many announcements here. I got VMware cloud additions on IBM Cloud. So that's a big one. Yeah, let's talk about what is there. You talked about having a seamless experience, right? So cloud additions are essentially the full VMware stack. It's VCF, right? Right. In various, I guess there are various versions of it, right? There's advance, there's enterprise. And five versions, yeah. I remember to slide with the mobile on it. Exactly. So IBM's the first public cloud to come to market with VMware cloud additions. So what does that mean? It means as a client, as VMware standardizes on these and starts to, let's say, focus a lot of different products and a lot of different things into these kind of prescriptive cloud additions, then you'll have portability. Let's say I can run my cloud addition on premises. I can bring my own subscription to IBM cloud. Right. So there's a lot of seamless experience with a common stack, and we're really proud that we are the first to market with this. I was going to say, you were the first. Was this just announced or was this? Just announced this week. Okay, okay. I may have heard something about it earlier on in a year. That's why I'm mixing up things. But I think that's the key is giving that portability and being able to move on-prem and into the cloud. I think a big, you know, it seems like a big piece of what VMware is going through as it gets, you know, ready for the whole broad thing is simplification. Yes. That must help IBM as well when you're talking to customers if you can have a simplified story. As, you know, because maybe they had been buying on-prem, you know, perpetual licenses and they're transitioning to the new style license. Right. Subscription. This must give them some like investment protection that they're looking at and saying, hey, now I feel more comfortable about this because I can, I know I pay here, but I can bring it there. That's right. Exactly. All right, we got a lot to cover. All right. So you got that one. We talked about the multi-tenant VCloud director solution. You got, you got, you have my notes here say you're the first cross cloud managed VPC service partner. Yes. So we were a design partner with VMware. So that's kind of the commercial construct that allows for the portability to really be transacted. Right. So we were a design partner in VMware's cross cloud managed services. And that is a, let's say it's a new vehicle for VMware, but we're, it's perfect for us. And I think clients are going to like it a lot. So that's the prescript that offers on the IBM cloud VPC, their next generation cloud. Oh, okay. And then there's something on the financial services cloud. Yes. Dizian. What is Dizian? I'm not familiar with that. You know Dizian? It's a, you, EUC, right? It's the desktop is the service. So that's a enterprise workspace. This one is really designed specifically for financial services. So for regulated industry. Cause it can, it can handle voice recordings and all of that stuff that you have to do for SCC regulated for all the GLBA and all of that fun. I used to be in that world a long time. It's desktop as a service essentially, right? Is that workspace? Workspace. We don't say desktop anymore. Lack of desktop. No desktop. No laptop as a service. Workspace I guess. So okay, but why, why the name change? Cause it's this, it's this, it's anything, right? But you bring that up and I think that's a great example. The partnership with Dizian is a great example of what we're doing together with our ecosystem. So at IBM, huge focus on the ecosystem. There were a couple of other partner announcements as well, right? There was disaster recovery as a service with primary IO and there was data center as a service with HCL tech. And that was built around IBM cloud for VMware. So the product, the announcement hierarchy, if you will, we're around products, ecosystem, right? And then the last one is around services, right? So IBM consulting also made investments to make cyber recovery and manage service for their customers. And I see Vella, Vella's HPC, isn't it? It is, let's, with GPU capabilities, let's say, which are in high demand these days. So Vella access to VMware workloads. Okay, so you got, you got GPUs. As a service. And the VMs need access to those GPUs. Right, you saw, I don't know if you guys were here for the keynotes, Jensen was up on stage. Yes. They had about five of them. Five. John Furrier said they're on eBay now for somebody selling for 10 grand a problem. So. Okay. And then we talked a little bit about Watson X. Is there any other integration or you're not ready to talk about that, you said? Oh, we have a lot of things going on in the joint innovation lab. I think AI is a big focus for us. Clearly, VMware is an important partner and one who's focused on, I would say, private, what do we call that? Kind of AI infrastructure, right? Yeah, VMware calls it private AI, right? Which doesn't mean private cloud, it means wherever. It kind of does though, right? Well, I mean, you could run, I'm going to assume it can eventually run on an IBM cloud. Well, that's private, I guess. It's private to the customer. Taking my on-prem experience and bringing it to the public cloud, right? I mean, that's versus. But I don't think, from what I've heard from Raghu here, the show VMware doesn't intend to build large language models, right? No. And IBM, we love our foundation models. There's a lot that we're developing, industry specific, some very targeted use cases, so. Oh please, go ahead. No, I was going to say, it's exciting times. So if you had to imagine an X, Y, where the vertical axis is the size of the model and the horizontal axis is industry or domain specificity, I would presume that you guys would be part of that long tail. You're not trying to compete against Lama too, I presume. We're partnering with them, right? We're partnering with Hugging Face, we partner with Meta around Lama. But you guys are going to be really strong, I would think, especially with your consulting of chops, of helping customers build really domain specific AI that solve maybe certainly more narrow problems that have all the guardrails that people talk about. And I would say that's kind of some of our unique value in the market, is that IBM has a very VMware friendly cloud. We've got AI that we can run on the cloud and on premises and we've got consulting that has deep domain expertise and capabilities to manage it, to migrate it, to modernize it. So pretty uniquely positioned, I think. Unrivaled synergies, right, and a joint mission. It's funny, 20 years ago, this kind of partnership certainly wasn't as obvious. I mean, it was almost out of necessity as opposed to opportunity and it seems like that's flipped. There's so much opportunity out there, just natural, see what the public cloud players, you guys are partnered with all those guys. Yeah. Right. VMware, despite the fact that you own Red Hat, which we asked Raghu, who's your competition? He goes, eh, kind of Red Hat. Okay, but now you guys are talking about this tight partnership, right? At the same time, look, we acquired Red Hat, VMware acquired Pivotal, and since that time, we focused on, let's say, the much broader area of the market where we did not compete. We've done a very good job of keeping the partnership focused on 90% of the addressable market rather than the 10% where we may have overlap. Yeah, that's fair enough. And, you know, OpenShift runs great on VMware. I was going to say, I think the latest number I heard was about 50% of OpenShift actually runs on VMware out there in the wild. So it doesn't surprise me, it's one of these things that, hey, having a good consumer stack, not that Tanzu isn't, but again, one of the dominant with Red Hat on VMware, on cloud, it would make sense that that would be big. Absolutely. I mean, we want vSphere to be the best platform for any workload. Yeah. That's our mission. Well done on the partnership, gentlemen. Thank you very much. Congratulations. Really appreciate you guys spending some time on theCUBE and talking about the depth of it. We're looking forward to what's going to come out of the joint innovation lab. I didn't realize there were 25 projects going on. That's quite an investment. And you're each contributing engineers and that's the kind of thing that customers need. It's a good, they don't pay for that. They pay for it, you know, not directly, but through, you know, they're paying for the products, but you guys are offering that service that already roadmaps. That's a real value. Well thank you. All right. Thank you very much. Thank you for watching theCUBE's live coverage of VMware Explorer 2023. This is day two, Rob Stretchade, Dave Vellante, John Furrier and Lisa Martin. We'll be right back after this short break.