 Live from Las Vegas, it's theCUBE, covering Dell Technologies World 2018. Brought to you by Dell EMC and its ecosystem partners. We're back at Dell Technologies World, the inaugural Dell Technologies World, you're watching theCUBE, the leader in live tech coverage. My name is Dave Vellante, and I'm really excited to have Sanjay Poonanon, CEO of VMware, a longtime CUBE alum. Great to see you, my friend. Thanks so much for making time. I know you're in and out. But things are good, we had Pat on on Monday. You guys made the call early on. You said to the street, you know, I think the industry analysts, the forecaster, maybe a little conservative, we're seeing great demand. We love our business right now, and it's coming true. Data center's booming, VMware's kicking butt, it's going great. You know, it's been obviously a very good couple of years since the Dell EMC merger, and it's really helped us. And, you know, when we think about our partnerships, we put this in a very special place. In the last two years, partnerships like Dell and EWS have been really instrumental, built on top of many of the partnerships we've had for many years. And our core principles at VMware have not changed. We're really focused on software defining the data center. Why? Because it makes you more agile, removes cost, reduces complexity, makes the planet more green. We think we've got a long way to go and just building that private cloud, making the data center feel like a cloud. That's priority number one. Priority number two, extending to the hybrid cloud. Last time we talked was at AWS re-invent. That's very important. We're going to work there, AWS and many other clouds. End user computing, making sure every one of these type of devices are secure and managed, whether it's Apple device, Google or Microsoft. Those two priorities have still stayed the same. And now Dell's coming to give us a lot more of that sort of draft to help us do that inside the Dell EMC customer base too. Yeah, and you guys are doing it again. I mean, the whole NSX obviously is- Big launch this week. Is booming. You know, it's funny. The whole software defined networking thing, everybody flocked to it, VCs flocked to it. And then you guys changed the game with that NYSERA acquisition. I mean, could you imagine? I mean, I guess you did imagine what it was going to become. I mean, it's really taken off in a big way. Bold move. I got to give credit to the VMware. I wasn't at the company at the time. But I got to tell you, I saw that I was stunned. Paying $1.2 billion for a company that didn't have much revenue. What? But here we are. We talked about it in our earnings call being a $1.4 billion run rate business. 4,500 customers. We were zero customers five years ago when we did the acquisition. And what we've really defined is that the future of networking is going to be software defined clearly. And it's much the same way a Tesla is transforming the automotive industry, right? What's the value of a Tesla? It's not just the hardware, but the software that's changing the way in which you drive, park, all of the mapping, all of that stuff. We believe the same way the networking industry is going to go through a mighty revolution. We think the data center gets more efficient and driven through software. The path into the public cloud and the path in the branch. And that's what we, as we launched our virtual cloud networking. It's extremely differentiated in the industry. We're the only ones really pioneering that. And we think it's extremely visionary. And we're excited to take our customers on this journey. It was a big launch for us this week. And we think NSX is just getting started. 45% of customers is about 1% of our roughly 500,000 customers of eSphere. Every one of them should be looking at NSX. Big opportunity ahead of us. Huge. And the cloud play, we talked about this at VMworld last summer. The clarity now that your customers have, they can now make bets for a couple of cycles anyway, really having confidence in your cloud strategy. You've seen that I'm sure in your customer base, right? We have. So it started off by telling the world that the 4,000 service providers that have built their stack on VMware, VMware cloud providers, VCPP, are all going to be very special to us as they build out their clouds. Often in many specialized country that have country specific cloud requirements. But then we were going to take the public clouds and systematically start working with them. IBM cloud was the first, when they acquired software, we had a strong relationship with them, announced them two, three years ago. And then I think the world was shocked. It was almost as I've described on the media, a Berlin wall moment when AWS and VMware came together. Because it sort of felt like the United States and Soviet Union in 1987, okay? And you know, here we have these two companies really working, that's worked out very well for us. And then we've done systematic other things with Azure, Google, and so on. So we'll see how the public cloud plays out. But we think that that hybrid cloud bridge, we're going to be probably the only company who can really play a very pivotal role in the world moving from private cloud to public cloud cloud. And there's going to be balance on both sides of that divide. So you really essentially are trying to become the infrastructure for the digital world now, aren't you? Talk about that a little bit. You're seeing new workloads, obviously AI's all the buzz. You guys are doing some work in blockchains. It's going to take a while for that to pick up. But really it's the, and containers is the other thing. Everybody thought, oh, containers, that's the end of VMs. And Pat at the time said, you guys don't understand, let me explain it. Sort of laid it out. You seem to be embracing that again, embracing change. I got to tell you that one for me because I tell you when I first joined the company four and a half years ago, I was at SAP, I asked Pat two questions. I said, the public cloud's going to, I mean, probably take out VMware. Aren't you concerned about Amazon? Here we got taking that headwind and making a tailwind. The second is like, everyone's talking about Docker. I mean, aren't containers going to just destroy the VMs? And that one wasn't as clear to us at the time. But we were patient. And what happened, we started to notice in the last few years, we began to notice on GitHub, tremendous amount of activity around Kubernetes. And here comes Google, almost taking the top off a lot of parts of Docker too. Docker, Swarm, Enterprise. Docker still remains a very good container format, but the orchestration layer has become a Google-based project called Kubernetes. And I think our waiting allowed us and Pivotal to embrace Google in the partnership we announced last year. And we plan to become the de facto Enterprise container platform. If VMs became the VM and VMware, and we have 500,000 customers, tens of millions of VMs, we think you can multiply those VMs by some number to get number of containers. VMware has its rightful place, a birthright to become the de facto Enterprise container platform. We're just getting started, both between us and Pivotal, the Kubernetes investment, big deal. And we're going to do it in partnership with companies like Google. I want to ask you about Pivotal. When Joe Tucci was at a swan song EMC world, he came out, it was an endless meeting, and we asked him, if he had a mulligan, what would you do over again? He said, you know, we're going to answer it this way. He said, I wished I had done more to bring together the family, the Federation. We laid that vision out, and I probably, he said personally, I probably could have done more. I feel like Michael has taken this on. I almost feel like Joe, when he left, said Michael, why one piece of advice is, do a better job than I did with that integration, and it seems like Michael's taken that on as an outsider. What can you tell us about the relationship between all the companies, particularly Pivotal? Yeah, Joe's a very special man as our chairman, and Joe and Pat are the reasons I joined VMware. So I have tremendous respect for him, and he's stayed on as an advisor to Michael Dell. And I think Michael Dell just took a lot of those things and improved on it. I wouldn't say that anything was dramatically bad, but he tightened up much of the places where we could work together. One material change was having the Dell EMC reps. Kerry Quota, for example, VMware, they're incentivized. That's been a huge difference to allow us to have our sales forces completely aligned together. Big, big huge difference. I mean, sales people care about a product when they're compensated. Kerry Quota on it and drive it. The second aspect was in many of these places where Dell and VMware or VMware and Pivotal just take obstacles out of the way. And I don't think Pivotal would have been really successful if it had stayed within VMware four or five years ago. So Paul Moritz leaving the genius of that whole move, which Joe orchestrated, and allowing them to flourish. Here they are four or five years, they've gone public, they're having tremendous amount of traction. And then last year, we began to see that Kubernetes is coming back, allowed us to get closer to them. We didn't need to do that by necessarily saying Pivotal needs to be part of VMware. We just needed to build a joint engineering effort on Kubernetes and make that enormously successful. So you get the best of both worlds. We're an investor, obviously, in Pivotal. We're proud of their success in the public markets. We benefit some from that IPO process. But at the same time, we want to make sure this Kubernetes effort and the broader app platform on Cloud Foundry is enormously successful. And every one of our customers who have VMs starts to look at containers. Well, I always said Pivotal was formed with a bunch of misfit toys. They just didn't quite fit into VMware. It's come a long way. And you took that, but it was smart, because you took it and said, okay, here it is. Morets, start figuring that out. Who better to do that than Paul? And it's really come together and obviously a very successful. John, Rob, me, Scott, Yara, Bill Cook, many of that team there. They're passionate about developers. We understand the infrastructure world very well. But when you can get Dev and Ops together in a way where they collaborate. So we're excited about it. And we have a key part for us. We have a very simple mission. To make the container platform just very secure. What's the differentiation between us and other companies trying to build container platforms with VKS, NSX? So our contribution into that is to take Kubernetes, bash for some of the management capabilities, and then add NSX to it, highly differentiated. And now all of a sudden customers say, this is the reason why, because every container brings a place where the port could be insecure. NSX makes that secure. And we think that that's another key part to what's made NSX to launch this week, extremely special, is it's stories that relates to cloud and containers. Those two C's, I would say, cloud and containers, we've taken what were headwinds to us, VMware over the last four or five years and made them tailwinds. And for us that's been a tremendous learning lesson, not just I would say in our own technology roadmap, but in leadership and management. And that's important for us as business leaders too. And I got to give some love to my friends in the VSAN world, Yan Bing, and those guys. Obviously, VSAN doing very well. Give us the update there. I mean, you're doing exactly what you said. We're going to do to networking in storage what we did to compute. I mean, again, you know, when we start things off, if you remember three, four years ago, we were confused between EMC and VMware. Evo, Rails, some of those things, we just had to clean that up. And as Dell EMC came together and VMware, we said, listen, we're going to do software-defined storage really well because it has a very close synergy point to the hypervisor. I mean, we know a lot about storage because it's very closely connected to compute. And if we could do that better than anybody else, in the meantime, all these startups, whether it's, you know, we're doing reasonably well. Simplicity, Nutanix, Pivot3, so on and so forth, but there's no reason that we don't have our act together. We could build the best software-defined storage and then engineer a system together with Dell that has the hardware, and that's what VxRail has become. So a few false tubs of the toll when we started off, you know, three, four years ago, but we've come a long way. Pat talked about over 10,000 customers at the revenue run rate that we announced last year and a 600 million run rate at the end of Q4. We believe we are for just the software piece, we are the de-factor leader and we have to continue to make customers happy and to drive, you know, this as the future of hyper-converged infrastructure because Converge had its place and now the coming together of compute, storage, overtime networking with a layer of management, that's the future of the data center. Yeah, yeah, we're watching some good, interesting, you know, maneuvering going on in the marketplace. A lot of fun for a company like ours to watch. I want to talk about leadership. There's a great, you got to go to Sanjay's LinkedIn profile. There's an awesome video on there. It's like a, it's like a little mini TED talk that some of your folks mashed up and put out there. It's only about eight minutes, but I want to touch on some of the things that I learned from that video. Your background, I mean, I knew you came from India. You came over at 18 years old, right? I was very fortunate. I grew up in a poor home in India and I came here only because I got a scholarship to go to Dartmouth College. And I think I might've been one of the few brown-skinned guys in New Hampshire, Hanover, New Hampshire, you've been there. There's not many. There's not much going on there. But I'm very fortunate. And this country is a very special country to immigrants if you work hard and if you're willing to apply yourself. And I'm a product of that hard work. And now as an Indian American, now living in California. So I feel very fortunate for all that both the country and people who invested in me over the last many decades have helped me become who I am. You were into scholarship to Dartmouth. Yes, that's right. As a student in India. So obviously an accomplished student in India. And you said, you know, I got bullied a little bit. I had the glasses, right? Somebody once told me, Dave, don't peek in high school. That's good advice, right? So it was funny to hear you tell that story because I see you as such a charismatic, dynamic leader. I can't picture you as, you know, a little kid getting bullied. We were always geeks at one point in time. But one of the things my mother and dad always taught me, especially my mom, my tremendous influence in my life and as my hero, is listen, don't worry what people say about you, okay? Your home is always going to feel a safety and a fortress to us. And I appreciate the fact that, irrespective of what happened on the playground if I was bullied at home, I knew it was secure. And I seek to have that same attitude towards my children and to everybody to consider my extended family, people at work and so on and so forth. But once you've done that, you don't build your identity just through what people say about you. You're going to build your identity through what's done over a long period of time, okay? With, of course, if everybody in the world hates you, that's a tough place. That's happened to a few people in the world, but I wasn't in that state at all. And as I came to this country, I just got tougher because I was a minority on the place. But many of those lessons I learned as a young boy, helped me as an 18-year-old as I came here and I'm very thankful for that. And you came here with no money, right? It's a scholarship pocket. A scholarship pocket, yeah. Right, well, and- Maybe 50 bucks in the pocket. Maybe 50 bucks in an opportunity. Yeah. And made the most of it. And then, obviously, you did very well at Dartmouth. You graduated from Harvard, right? I did my MBA at Harvard. MBA at Harvard. Probably met some interesting people there. Andy Jackson being one of them. I know Andy's a friend of yours. Sam Bird, who's the head of the client business, is also a classmate of mine at HBS. The 97th class of HBS had some accomplished people. Chris Kaptensky is running McDonald's. He's president of the U.S. So very fortunate to have some good classmates there. What did you do? Did you go right to Harvard from- No, I spent four years working at Apple. Okay, so you were at Apple? Apple, and then went back to do my business school. And then what did you do after that? I came back to Silicon Valley to be at a startup. I was one of the founding product managers at Alpha Blocks, then went to Informatica. And bulk of my life was time was at SAP. And most of my life was in the analytics big data business. What we call big data today at the time. That's where we first met at SAP. Analytics, FBI. And then when Joe and Pat called me for the end user computing role at VMware, four and a half years ago, that's when I came to VMware. Yeah, and then that was a huge coup for VMware. We knew you from SAP, and that business was struggling. You always give credit to your team, of course. Awesome, which is what a good leader does. The other thing I wanted to touch on before we break is, you talked about leadership and how important it is to embrace change. You said you have three choices when change hits you. What are those three choices? You either embrace it, okay? You either stand on the sidelines or you leave. And that's typical what happens, any kind of change. Whether it's change at work, change in families, change in other kinds of religious settings. I mean, it's the time, the whole principle. And you want to let the people who are not on board with it leave if they want to leave. The people who are staying in the middle and not yet convinced, you hope they'll do, but they cannot throw the grenades, because then they're just going to be. And then you want to take that nucleus of people who are with you in the change as the change is to help you get the people who sit in the sidelines in. And to me, when I joined VMware, the end user computing team had the highest attrition and the lowest satisfaction. And I found the same thing. There were people who were leaving in droves. Some people sitting on the sidelines, but a core group of people. I love that, were willing to really work with me, because I didn't know a lot about it. I mean, the smarter people were in the team and some people that we hired in. We had to take that group and become the change agents. And when that happens, it's a beautiful thing. Because from within starts to form this thing that's the phoenix rising out of the ashes. And the company, and then these people who were sideliners start to get involved. New people want to join. Now everybody wants to be part of the end user computing team at VMware, because we're a winner. But it wasn't that way four and a half years ago. Same thing in cloud. How are we going to transform this cloud business to be one where we cloud air? We're being made fun of. Like, how are you ever going to compete with Amazon? We had to go through our own catharsis. We divested that business. But out of that pain point came a fundamental change. Some people left, some people stayed. But I'm just grateful to all of this that we learned tremendous amount. I think change is the most definitive thing that happens to every company. And you have to embrace it. If you embrace change, it's going to make you a much stronger leader. I'll tell you, the Mandarin word for crisis is two symbols. One that shows disaster and one that shows opportunity. I choose the opportunity path. You choose, right? Yeah. And that's, everyone makes that choice. Right? And if you make the right path, it could be a beautiful learning experience. So, Jay, words to live by. Definitely check out that video on Sunday's content profile. Really fabulous always to sit down and talk to you. I'd love always to bless you, Dave. Our conversation. Congratulations on all your success. Thank you. Really appreciate your support. All right, everybody, that's it from Dell Technologies World 2018. You can hear the music behind us. Next week, big week, we got Red Hat Summit. I'll be at Service Now Knowledge. We got a couple of other shows and tons of shows coming up. And I don't know, you were at Veeam on last year. I don't know if you're going to be there this year. Maybe, maybe not. We'll see. Well, we got a big one coming up here We'll be there. We got Veeam World coming up at the end of August early September, which is back at Moscone this year. It's in Las Vegas still. One more year. And then we'll be back at Moscone after the construction's over. So, go to thecube.net, check out all the shows. Thanks for watching, everybody. We'll see you next time.