 Live from Las Vegas, it's theCUBE. Covering VMworld 2017, brought to you by VMware and its ecosystem partner. Welcome back to theCUBE on day three of our continuing coverage of VMworld 2017. I'm Lisa Martin, my co-host for this segment is John Troyer and we're excited to be joined by Rob Young, who is a CUBE alumni and the manager of product and strategy at Red Hat. Welcome back to theCUBE, Rob. Thanks, Lisa, it's great to be here. So Red Hat and VMware, you've got a lot of customers in common, imagine you've been to many VMworlds. What are you hearing from some of the folks that you're talking to during the show this week? So a lot of the interest that we're seeing is how Red Hat can help customers, VMware or otherwise, continue to maintain mode one applications, legacy applications while planning for mode two, more cloud based deployments. And we're seeing a large interest in open source technologies and how that model could work for them to lower costs, to innovate more quickly, deliver things in a more agile way. So there's a mixture of messages that we're getting, but we're receiving them loud and clear. Excellent, you guys have a big investment in OpenStack. Yes, we do. And even back in the early days when OpenStack was struggling as a technology, we recognized that it was an enabler for customers, partners, large enterprises that wanted to create and maintain their own private clouds, or even to have a hybrid cloud environment to where they've maintained and managed, controlled some aspect of it while having some of the workloads on a public cloud environment as well. So Red Hat has invested heavily in OpenStack to this point. We're now in our 11th version of Red Hat OpenStack platform and we continue to lead that market as far as OpenStack development, innovation, and contributions. Rob, we were with theCUBE at the last OpenStack Summit in Boston. Big Red Hat presence there, obviously. I was very impressed at the maturity of the OpenStack market and community. I mean, we're past the hype cycle now, right? We're down to real people, real uses, real people using it. A lot of very people with a strong business critical investment in OpenStack in many different use cases. Can you kind of give us a picture of the state of the OpenStack market and user base now that we are past that hype cycle? So I think what you're, what we're witnessing now in the market is that there's a thirst for OpenStack. One, because it's a very efficient architecture. It's very extensible. There's a tremendous ecosystem around the Red Hat distribution of OpenStack and what we're seeing from enterprises specifically in the telco industry is that they see OpenStack as a way to lower their cost, raise their margins in a very competitive environment. So anywhere you see an industry or a vertical where there's a very heavy competition for customers and eyeballs, that type of thing, OpenStack is going to play a role in if it's not already doing so, it's going to be there at some point because of the simplification of what was once complex but also in the cost savings, it can be realized by managing your own cloud within a hybrid cloud environment. You mentioned telco and specifically OpenStack kind of value for companies that need to compete for customers. Besides telco, what are their industries are really kind of prime for embracing OpenStack technologies? So we're seeing it across many industries but finance and banking, healthcare, public sector, anywhere where there's an emphasis on the move to open source and to open compute environments, open APIs, we're seeing a tremendous growth in traction and because Red Hat has been the leader in Linux, many of these same customers who trust us for Red Hat Enterprise Linux are now looking to us for the very same reason on OpenStack platform because much like we have done with Enterprise Linux, we have adopted an upstream community-driven project, we have made it safe to use within an environment in an enterprise way, in a supported way as well via subscription. So many industries, many verticals, we expect to see more but primary use cases, NFE and telco, healthcare, banking, public sector are among the top dogs out there. Is there a customer story that kind of stands out in your mind as really a hallmark that showcases the success of working with Red Hat and OpenStack? Well, there are many customers, there are many partners that we have out there that we work with but I would say if you look at some of the four out of the five large telcos, Orange, Ericsson, Nokia, others that we've recently done business with would be really good examples of not only customer use cases but how they're using OpenStack to enable their customers to have better experience with their cell networks, with their billing, with their availability, that type of thing. And we had two press announcements that came out in May. One is an educational institution of a consortium of very high profile Northeast learning institutions, public institutions that are now standardized on OpenStack and that are contributing. And we've also got Oak Ridge, forgive me, it escapes me, but there's a case study out there on the Red Hat website that was posted on May the 8th that depicts how they're using our product and how others could do the same. Rob, switching over a little bit to talking a little bit more about the tech and how the levers get pulled. We're talking about cloud, right? Another term past the hype cycle, right? It's a reality. But when you're talking about cloud, you're talking about scale. We mentioned Linux, OpenStack and Red Hat, kind of built on a foundation of Linux, super solid, super huge community, super rich, super long history. But can you talk about scale up, scale out, data center, public cloud, private, how are you seeing enterprises and of various sizes address the scale problem and using technologies like the Red Hat CloudStack to address that? So there's a couple of things, there's many aspects of that question, but what we have seen from OpenStack is when we first got involved with the project, it was very much bounded by the number of servers that you needed to deploy an OpenStack infrastructure on. What Red Hat has done or what we've done as a company is we looked at the components and we have unshackled them from each other so that you can scale individual storage, individual networking, individual high availability on the number of servers that best fit your needs. So if you want to have a very large footprint with many nodes of storage, you can do that. If you want to scale that just when peak season hits, you can do that as well. But we have led the community efforts to deshackle the dependencies between components. So from that aspect, we have scaled the technology. Now, scaling operational capabilities and skill sets as well. We've also led the effort to create open APIs for management tools. We've created communities around the different components of OpenStack and other open source technologies. Automation, a big part of that as well. Automation as well. So if you look at Ansible as an example, Red Hat has a major stake in Ansible and it is predominantly the management scripting language of choice or the management platform of choice. So we have baked that into our products. We've made it very simple for customers to not only deploy things like OpenStack but OpenShift, CloudForms, other management capabilities that we have. But we've also added APIs to these products so that even if you choose not to use a Red Hat solution, you can easily plug in a third party solution or a homegrown solution into our framework or our stack so that you can use our tool set, single pane of glass to manage it all. So with that, can you tell us a little bit about the partner ecosystem that Red Hat has and what you've done sounds like to expand that to make your customers successful in OpenStack deployments? Absolutely. So as you're aware of Red Hat Enterprise Linux, we certify most of the hardware or all of the hardware OEMs on Red Hat Enterprise Linux. We have a tremendous ecosystem around Enterprise Linux for OpenStack. This is probably one of the most exciting aspects of Red Hat right now. If you look at the ecosystem and the partners that are just around OpenStack on its own, we've got an entire catalog of hundreds of partners, some at a deeper level than others, integration-wise, business-wise, whatever. But the ecosystem is growing and it's not because of Red Hat's efforts. We have customers and partners that are coming to us saying, we need a storage solution. We're using NetApp as an example. You need to figure out a way to integrate with these guys and certify it, make sure that it's something that we've already invested in is going to work with your product as well as it works with our legacy stuff. So the ecosystem around OpenStack is growing. We're also looking at growing the ecosystem around OpenShift, around Red Hat Virtualization as well. So I think you'll see a tremendous amount of overlap in those ecosystems as well, which is a great thing for us. The synergies are there and I just think it's only going to help us multiply our efforts in the market. Go ahead, John. Rob, talking again, partnerships, I've always been intrigued at the role of open source, upstream, the open source community, and the role of the people that take that open source and then package it for customers and do the training and enablement. So can you talk maybe a little bit about some of the open source partners and maybe how the role of Red Hat in translating all that upstream code into a product that is integrated and has training and is available for consumption from the IT side? Sure. So at Red Hat, we partner not only with open source community members and providers, but also with proprietary. So I just want to make sure everybody understands we're not exclusive to who we partner with. Upstream, we look for partners that have the open source spirit mind. So everything that they're doing that they're asking us to either consider as a component within our solution or to integrate with, we want to make sure that they're, to the letter of the law, contributing their code back and there's no hooks or strings attached. Really the value comes in, are they providing value to their customers with the contribution and also to our combined customers? And what we're seeing in our partnerships is that many of our partners, even proprietary partners like Microsoft, as an example, are looking at open source in a different way and they're providing open source options for their customers and subscription based consumption based models as well. So we hope that we're having a positive impact in that way because if you look at our industry, it's really headed towards the open source, open API, open model and the proprietary model still has a place and time, I believe, but I think it's going to diminish over time and open source is going to be just the way people do business together. One of the things that you were talking about kind of reminded me of one of the things Michael Dell said yesterday during the keynote with Pat Gelsinger and that was about innovation and that you really got at companies to be successful and need to be innovating with their customers and it sounds like that's definitely one of the core elements of what you're doing with customers, you said customers and partners are bringing us together to really drive that innovation. Yeah, I couldn't agree more and it's an honor to be mentioned in the same breath as Michael Dell, by the way, but what we see is because of the open source model you can release early and often and you can fail early and what that does is encourage innovation so it's not only corporations like Red Hat that are contributing to upstream projects. OpenStack as an example or Linux as an example or KBM as an example, there's also college students, there's people out there who work for Bank of America, across the fruited plains all over the world and the one thing that unites us is this ability to recognize the value of our contributions to an open source community and we think that that really helps with agile development, agile delivery and if you look at our project deliveries for OpenStack as an example, OpenStack releases a major version of its product every six months and because of contributions that we get from our community we're able to release and testing, it's not just contributions come in many forms, testing is a huge part of that, because of the testing we get from a worldwide community we're able to release shortly after a major version of upstream OpenStack because of that innovation in a pure waterfall model, it's not even possible in an open source model, it's just the way of life. So as we're kind of wrapping up VMworld day three what are some of the key takeaways for you personally from the event and that Red Hat has observed in the last couple of days here in Las Vegas? So there's a couple of observations that have kind of been burned into my brain. One is we believe at Red Hat our opinion is that virtualization as a model will remain core not only to legacy applications mode one but also to mode two and the trend that we see in the model that we see is that for mode two virtualization is going to be a commodity feature. People are going to expect it to be baked into the operating system or into the infrastructure that they're running the operating system or the applications on. So we see that trend and we've suspected it but coming to VMworld this week helped confirm that and I say that because of the folks I've talked to after sessions at dinner in the partner pavilion. So I really see that as a trend. The other thing I see is that there's a tremendous thirst within the VMware customer base to learn more about open source and learn more about how they can leverage some of this not only to lower their total cost of ownership and not to replace VMware but how they can compliment what they've already invested in with faster, more agile based mode two development. And that's where we see the market from a Red Hat standpoint. Excellent, well there's a great TEI study that you guys did recently, total economic impact on virtualization that folks can find on the website and Rob, we thank you for sticking around and sharing some of your insights and innovations that Red Hat is pioneering and we look forward to having you back on the show. It's great to be here, thanks. Absolutely and for my co-host, John Troyer, I'm Lisa Mart and you're watching theCUBE's continuing coverage, day three of VMworld 2017. Stick around, we'll be right back.