 All those VP of alliances at VMware. Okay, welcome to theCUBE. Am I okay with the cameras? How we doing? Okay. Thank you very much. Good afternoon, everybody. All right, we're live. That's right. We're here at the HDS event and they invited us and so we accepted to come and speak on stage and help launch the new VSP. So we're talking off camera. Just start the conversation. So you live in Palo Alto and you live right around the corner from Steve Jobs and you see him walking around the neighborhood. A little bit. He's healthy. Everything's going good with Steve. He looks great. Great coverage in the neighborhood with the iPhone. I think it's safe to say that AT&T will make sure Steve Jobs' neighborhood gets a good iPhone coverage. He's probably saying, why is everyone complaining about AT&T? I have no problem in my neighborhood. Well, hey, great to have you on. Obviously, I'm really excited to talk to you right now about when Hitachi had a great event to deal with the relationship there. But we had a great time at the Yerkshow VMworld. theCUBE was a centerpiece. We had 60 guests on and he had Todd Nielsen, all your partners, all the top executives and customers. And we heard a lot of great conversations. One of the things that Todd Nielsen was bragging about and talking about, and I'd be talking about it too, is he said that for every dollar license of the Mware license, he throws off $15 in ecosystem revenue. So of course that's going to attract a crowd. Of course. So what's the update on that? Well, and you know, it's actually, what that is, it's a testament to the fact that we are fundamentally a platform. And we are a next generation platform that's ushering a new architecture, if you will, that combines the best of what we've done on the web, as well as in private data centers. And when you have a platform of such magnitude, it has impact up and down the stack. And that creates a lot of opportunity for the ecosystem because customers say, you know what, this is a fundamentally new way of doing things, a new way of architecting and delivering my IT. And therefore I'm going to rethink. I'm going to rethink the servers, the storage, the networking, the security, how I write my applications, how the middleware behaves. And when you have people fundamentally rethinking things like that, it creates opportunity up and down the stack and they're willing to evaluate new vendors, new approaches. And I think what you're seeing is a testament. And you know, this is not necessarily new. If you go back the last 30, 40 years, major new platforms that have come along have had a pretty significant ecosystem around them. And what's really surprising is that one to $15 number about two, three years ago was one to 11, which shows you the investments that people are making. Still a pretty big number. Significant numbers. So let's talk about VMware's culture. VMware was a very, how do I say this? Woodstock-like environment, it was intoxicating. People were just, it was energy around. Compare that to last week we were at Oracle Open World, somewhere saying Closed World. Oracle's got a different vibe. I mean, their clothes are saying, this is the box, it's fully integrated. I didn't see a lot of excitement. And you manage the Oracle relationship. One, did you see the same thing? And how do you compare and contrast the two views between Oracle and say SAP or Hitachi and say someone who's got a closed architecture? You know, I think it's a fundamentally different approach. I think Oracle's message is they'll provide every layer of the stack, they'll integrate it, and they will be the one stop that everybody goes to. But I think, and what we and vendors like SAP and Hitachi and others talk about is, well, we are going to be the best at our layer. We're going to do certain things extremely well. We're going to do it in an open and pluggable way so that you can plug in pretty much any other vendor or technology that you like. And I think what this speaks to, it's two fundamentally different approaches and it forces customers to go down, to make that decision. But what we find is a lot of customers will buy into a vision, but they'll have different philosophies in how they want to implement it, especially at different layers of the stack. So that's why we think in the long run, the open approach, giving customers a lot of choice at different layers of the stack in terms of service providers, private versus public hosting options. I think giving customers a lot of those choices is a lot more attractive. Yeah, and I think for me, I'm old enough to remember the client server revolution and the PC revolution. And a lot of companies made a lot of money. I mean, a lot of wealth was created during that whole, PC kind of grew organically and people started networking them together with Novel and you had print servers and next thing you know, like, hey, we can actually put this all together, we'll run the mini computer, hey, we'll run this SAP Oracle stuff on it, boom. Accentures were born, all these consulting firms were doing deployments and it transformed businesses. We're seeing that same dynamic now. It's why I'm so focused on that ecosystem number because I believe you guys are in a great position to be that next catalyst. And I think that was what was so exciting about VMworld is that actually with Meritz and say Gelsinger at EMC and you know, Tom George is at NetApps and among others here, you know, we heard from you know, here at CEO Hitachi, you have an ecosystem of big players who would ignite consulting firms a new way of doing things. So the question is, what is that new way? And obviously the framework and abstracting way of complexities, but for the folks out there deploying the consultants, what's the mindset and what are they doing right now? And for the folks who don't know what to do, what would you recommend? Yeah, well, I think the clear cut observation is that the train has left the station in the sense that the vision that we've been outlining for the last few years is something that customers have en masse adopted and they're moving systematically but surely to implementing that in different ways. And I think when you speak with systems integrators and the ecosystem, you know, they see the value and the power of that vision and they're also rallying around it coming up with their solutions for their layer and helping customers kind of get that destination point. And you know, there's been some criticism of folks out there saying, you know, crapplications have heard that term much of times by some bloggers. The reality is they are moving there and we've talked about proof points at VMworld. Is there anything that you're saying, saying, hey, this is, you know, without a doubt the train's left the station, but here are examples of bona fide environments that it's a no brainer to be virtualized on. So, you know, it's, so we call it the customer journey. So there's three phases we believe to the typical customer's journey to getting to 100% virtualization to some of the benefits we talk about of cloud computing. You know, the first step is they start implementing virtualization in test and dev environments. Those are safe environments, they're not very demanding. The next is to go into what we call IT production. So this is where you take your IT resources, file and print servers, domain controllers, active directory, DNS, and you virtualize them. And the third and final stage is what we call business production. So this is where you take your business process applications, your mission critical apps, and start virtualizing them. Now, with each successive generation of technology, both the VMware's and our ecosystems, customers are able to go through those phases with much more confidence. So today, for example, if you look at the performance of any application on VMware, we can virtualize, you know, just about any app and show no difference compared to physical. Now there are a lot of skeptics out there and they have to be taken to the lab and we demonstrate that to them. But we've got customers running intense databases, we've got customers running SAP, we even have a lot of customers running Oracle application and databases on VMware, and it runs as well as, if not better than physical. And just to give you one proof point, we just set a world record for database performance. So the previous record was set, I believe last September, by Oracle RAC. We just set a record in conjunction with PAR Excel, which is an up-and-coming columnar database vendor. We went through the TPCH benchmark, they came and did the audit, and we set a world record for database performance, but we also set a world record for cost performance. So the previous record was something like $5 or $6 per query, including all the hardware and TCO. Our record was at something less than a dollar a query. So that takes a whole price performance kind of concept. It says, hey, we can blow it away and lower price. Right, so not only can you run extremely demanding things on vSphere 4, but you also get the economic benefits. I mean, this is the thing that's intoxicating is that those numbers do resonate with the ecosystem and you guys have been dealing with an ecosystem for a while and VMware's changed. So there's been good things, hey, there's obviously a lot of praise with VMware, but your business has changed. There's been some criticisms in the partner ecosystem around. You know, hey, they told me they're going to do this, but you guys got to make a business and you're making changes. What Paul laid out at VMworld was, this is what we're doing. It was a clear communications. And so as the Alliance executive, you got to communicate and that's a core part of your challenge. So communicate to the folks out there about the ecosystem strategy. What are the safe zones? Because that's all they want to know. Say, one, we're the growth areas. Tell me what the growth areas are and where do I play? And also, tell us where not to play. Well, you know, fundamentally, let me lay all that out step by step. The philosophy, you know, as a starting point is that we want to be an open platform. So we will continue to inter-operate with as many vendors up and down the stack as possible. So you know, here I am at a Hitachi data systems event, no problem at all. So we support all the hardware vendors, all the software vendors equally. Secondly, being an open platform means we're going to start opening up the platform. So more APIs, more enablements. So this morning, one of the things that was mentioned is the VStorage APIs and how they allow a storage array to do a lot of core processing at the array level rather than at the virtual machine level and that makes the overall setup much more efficient. So we need to continue doing that. Now, this is something we started just a few years ago. So we are relatively early in the cycle. Maybe we're in the third inning of learning how to open up the platform. And there are starts and stops. There's learnings along the way. But you're better down in the lower parts of the stack. That's where your core compass is. Exactly. Moving up to the frameworks. So, but that's the thing I tell the ecosystem is we are learning how to open up the platform, open it up to everybody, you know, not just a handful of vendors, and we will get better over time, number one. Number two is we certainly have a direction or roadmap and we are articulating, and we're getting better at articulating where we're going and where the opportunities for the ecosystem. If I could just explain a few of them. You know, security. As people move to the cloud, they're very concerned about their data and the security of the overall system. So there's a lot to do in that realm. We announced a couple of products, but there's a lot more that can be done. And we're in active discussions with a lot of security vendors about what those things look like. Same thing goes with management. That's a tremendous opportunity. As environments get more complex, as people move to 100% of virtualization. And you guys have a vCenter, right? We have vCenter. But we've designed that to be an open framework. So you can plug in your management product into that, or you can plug into the vCenter APIs and extract information out about virtual machines and manage them through your pane of glass. So, you know, it's pretty. You're not trying to project your view of the world. You're saying, hey, here's vCenter. Right. If someone comes up with a better mouse trap, God bless him. God bless him and let the customer decide. And the fact of the matter is we have 200,000 customers and we hope to gain many, many more. And each of them will have different requirements and preferences. Sometimes vCenter is the answer. Sometimes it's something else. Sometimes. It's a long-term view. So let's take, I'll kind of like go back in history, Microsoft, final question, I'm getting the hook here. Final question, Microsoft has, always was great in the early days. If you were on their side, everyone made a lot of money. If you were an enemy, they killed you. So, not that VMware's going to be that evil. But, you know, in the ecosystem, you've got to articulate the boundaries. Where shouldn't people play? Can you talk about that publicly? Or no comment? Well, what I would say is, you know, fundamentally we're a very different company than Microsoft. And we also live in a different era than when they really, you know, came to life in the 90s and 80s. We live in era where open source is critical. You have to support it. You have to play in an open source way. You know, we've made a lot of our stuff open source. You have to, you have to be open and there's a lot of standards out there. More transparent. There's more transparency. There's more vendors out there than there were in the 80s and 90s. So I think it's apples and oranges, number one. Number two, I think we have to earn that trust of the ecosystem. So we have to, every day, every quarter, every year, you know, demonstrate that there's opportunities for that. Can you feel good about that right now? Just kind of on a 10 being high satisfaction, where are you at in terms of your level of satisfaction of the ecosystem? The way I think about it is our ecosystem is larger than ever before. You know, we have something like 25,000 partnered worldwide. Dozens and dozens of new ones sign up. The amount of investment the partners are making as an example at VMworld is tremendous. So they continue to reap the economic rewards of investing in VMware. Investment areas going forward. Any new initiatives that you want to share with folks? Well, I think the desktop is a tremendous area of growth. We laid out our vision of end user computing rather than just desktop virtualization. There's lots to be done in that space, whether it's management or security or storage or networking. There's lots of opportunity there. We also laid out our vision of the applications platform. People want to write a whole new generation of applications, call them cloud-based apps. Well, there's a lot of opportunity for the underlying applications platform. And the other thing I would say for the ecosystem is the fact that the opportunity for them keeps growing. So three years ago, for a dollar spent on VMware, there was $11 spent on the ecosystem. Today, that $11 has become 15. So we are growing the opportunity for the ecosystem. We're here at theCUBE. I'm getting the hook. I want to go all this. This is a worthy segment for 30 minutes, but you're in Palo Alto. You can come to our CUBE. We can check in with you guys. Absolutely. Really exciting area growing on the ecosystem side. We called it VMware, $100 billion market cap. And we think they're going to be there in a few years. So, Park Patel, thank you so much for coming on. We got to go to another guest. Thanks for stopping by. Thank you. I'm going to announce, but we love VMware, partnering with Hitachi Data Systems with their new big platform. So we're going to come back with... Sheppard from Iowa On Demand. David Sheppard from Iowa On Demand. Thank you, Park. Okay. We love VMware. VMware is great. Good segment, John. Yeah. Well, he's snuck in. We want to make room for alumni. VMware, you know. We're agile at theCUBE. CUBE. We're, you know, talk about agility and business continuity. We're the same thing, Dave, you know? We're highly available. Always on. Great to meet with you. Okay, Dave, I'll let you... First of all, David, tell us a little bit about the Iowa On Demand. You guys too. Iowa On Demand is actually a... Get nice and close. Get closer. Iowa On Demand is one of the services that IO data centers provides to our customers. We are IO data centers provides data center as a service to enterprises, world's largest enterprises, governments, and solution providers. Iowa On Demand is an offering that we developed about three years ago with Hitachi as one of the core components of that. And the reason we went with Hitachi is all of our customers demand the Always On, Always Available infrastructure. And Hitachi enables us as part of that solution to provide it. So, cloud computing has been a big buzzword and infrastructure as a service has been a big buzzword in the industry. As a data center as a service provider, we want to make sure we can fulfill our customer's needs. And we did that through our Iowa On Demand offering, taking best of class infrastructure and providing that as a service to our customer base. So you're a customer of Hitachi's, both as a cloud service provider, but also as a data center service provider, correct? Okay, so you're a US PV customer, is that right? That's correct. So what do you think of this announcement, this whole event here? We think it's great. So if going through the presentations and we'd obviously had some briefings as a customer, going into the release, Hitachi has really helped us enable, again, to our customers what our four key tenants are, which is the flexibility, innovation, reliability, and efficiency, reliability being key to every one of our customers. So we operate with 100% uptime service level to our customer base. We can't do that without the, these common denominators obviously going to be the most important. So as a data center provider, we can provide that if we're going to provide infrastructure as a service or cloud services, we have to have that reliability built in and we can do that with Hitachi. It's only continued to escalate with their innovation, which ties into our being innovative. We can now deliver that even at a higher level than we could before. So you're at VMworld this year and there was a lot of talk about cloud service providers. John, we had a number on theCUBE and the big theme that we had was cloud service providers are going, nobody's stopping them. And you know that, right? With your on-demand business. At the same time, the internal IT operations are beginning to benchmark themselves against the cloud guys. So you see both sides of that fence. You know, what are you seeing there? Well, we're seeing exactly that. So there is no, there's no absolute in technology. There's no organization that's going to go 100% cloud, but it is going to be a key component to every organization, whether it's an internal cloud, external cloud or a combination thereof. What we can provide and the focus that we think is going to be very important going forward is an enterprise class to that, right? So it's not the organization that can give you commodity or very inexpensive. That's going to apply to a lot of organizations, not to our customer base. We want to focus on the enterprises and the government. They don't pay more for that because they need that. That's what they're looking for. Correct, correct. They need the security, they need the reliability. They have to have those built into it and it has to always be available so that the reliability is the number one factor in both the data center and the cloud computing. You see a lot of the commodity offerings on the cloud side that are consistently down for various reasons and it's hard to have 100% of time and it's very expensive. So in order to be able to provide that we again partner with organizations, the Cisco's, the VMware's, the Hitachi's that can actually deliver that. So we're talking about that off camera. You talk about Cisco, VMware, Hitachi. You kind of built your own VCE like thing because you did it with Hitachi, right? Because that's your core platform provider. Talk a little bit. You said you did this before anybody else really did it, right? You sort of engineered it yourself? Well, innovation is obviously a core tenant of IO data centers as a whole. We have a very strong engineering background. So about three years ago we started in this offering and we used that internally on our own infrastructure for over a year testing that with some beta customers. Making sure this was going to work, making sure that this was truly a scalable offering. And then we took that to the market and it's been very well embraced for the every reason I talked to is we spent the time doing it. It wasn't just an off the cuff offering that we needed to get out there and attack something. We listened to our customers. We supplied to our customers what they needed which is the enterprise class which VCE is obviously VMware, Cisco and Hitachi have a very similar story, right? So it's the high quality infrastructure. There's only a few providers out there that can do that and we've selected Hitachi for the obvious reasons. What are the big things that CIOs are telling you? What's on their shortlist to do? We actually saw a couple of them in the presentation today. It's more with less, right? So that's where data centers have serviced a lot of organizations who traditionally built their own data center. You spent the huge capital dollars on building a data center. They can't do that anymore because they still have to perform internally to the same level but they have less to do that with and their CFOs have directed them no major capital spends on data centers. So how can they do that? Well one is obviously outsourcing to cloud, a portion of their business. The other is outsourcing data centers to service which is what IO does. So we can provide that same level of service without the huge capital outlay to them and also provide that because that's our core business model at a price point that is much more efficient for them. Excellent. So my last question for you David is what advice would you give to customers out there that are looking to do more with less? Call IO. Excellent advice. That's like the same as Tainment. 1-800? Yeah, exactly. IOdavisenters.com, exactly. No, it's evaluate. So it's really looking at the details. So there's a lot of information out there and a lot of that information is marketing spin so to speak but get in the details. We're very IOs. Our color scheme is black and white and it is black and white input, output. Make sure you're getting what you're actually thinking you're going to get. Excellent. All right, well we're here with David Shepard of IO On Demand and IO Data Centers, right? Correct. And it's great to have you in theCUBE. Thanks for coming by. Absolutely, thank you. All right, appreciate it. We got Brian Householder up next. Thank you. He's our last guest of the day and Brian kicked off the day today in the main session and he's going to anchor theCUBE so let's go, we'll go find him and we'll be right back. So.