 From Las Vegas, it's theCUBE. Covering VMworld 2018. Brought to you by VMware and its ecosystem partners. Hey, welcome back everyone. It's theCUBE live here in Las Vegas for VMworld 2018. It's theCUBE's three days of wall-to-wall coverage. I'm John Furrier with my co-host, the same Alan Cohen, who's an industry legend. Retired now, doing a lot of boards. As our guest analyst here for this segment, our next two guests. Another word for unemployed. Bartender and Silicon Valley is basically on board. Our next two guests, Bruce Shaw, senior director of global lines and industry solutions, remaking what it means to partner in the cloud. And of course, Keith Norby, CUBE alumni, manager of BizDev, that's the BizDev for NetApp. Guys, thanks for coming on. Thanks for spending the time. Oh, thanks for having us. So the first thing I want to get to is, give us an update on the relationship with NetApp and VMware. Obviously, Pat Gelsinger, spring in his step, go back three years ago. He almost, his job was on the line. So much has happened, the relationship with Amazon, the clarity around cloud, cloud operations, the role of infrastructure in that with DevOps driving programmable infrastructure. Kind of the world spinning into NetApp's front door right now. Yeah, yeah, we feel pretty good about it. Keith, he runs that relationship, so I'll let him leave the answer. Well, I thought it was best said and we can kind of unite together VMware and NetApp on moving from data centers to centers of data. NetApp's been on this data visionary and sort of the data authority track for a couple of years now. You guys have known that you've been to NetApp Insight. The relationship really is complementary from that perspective and it goes back many years, more than a decade. If you look at our common base, VMware of course has 500,000 users and it's install base. We've got a couple of hundred thousand. It's a gigantic opportunity together to move people exactly in the acts that Pat talked about in the keynote, act one through act four and getting us all to multi-cloud. And when you look at the relationship and the base of the ONTAP products that we have with VMware and the architecture, all the way to cloud volumes and then the latest architecture that we've just done with VMware for NetApp HCI, there's a lot to talk about. You know, I've been covering NetApp since the cue of nine years, it's our ninth VM world, but I've followed the company since the late 90s when they went public. Always a culture of learning and adaptability to survive in the past 10 years specifically, it's really been about adaptation because if you look at that model, people with a lot of losers are dead bankrupt, see companies come and go, but the ones that are customer-centric seem to win. Jassy on stage, very customer-centric. VMware, listening to their customers, got a great community. You guys have a very loyal customer base, both on the customer side, going back to the original products and the partners. So Bruce, as you think about partnering in the cloud era when you're now looking at all kinds of different relationships, whether it's in the stack from a technology standpoint or go to market or whatever the machination of the relationship is, you got to think differently. So I got to ask you the question, how do you partner? Because it's not just about the profit anymore. What is value add on this era? Take a minute to explain the vision. Yeah, and it's, you hit it right on the head. The value question is no longer the primary driver of what you're going after. When I say value, just pure revenue stream. You want to look at obviously the evolution to an ecosystem. And we spent a lot of time with that. On the internal side, not that anybody cares about what we do under the covers. We restructured our business units from one single business unit into three. So we've got a cloud-focused, you know, CDS, which is cloud focuses on the hyperscalers and our cloud volumes business. CIBU, which is our conversion hyper-conversion infrastructures. And then of course the guys that handle ONTAP and the, you know, the big stuff on the back end that provides the building blocks to all of that. They're dedicated teams, right? Dedicated teams, dedicated business units. And that gives us the potential of three pathways in terms of which we partner. And my goal since I came in to run the group in January has been how do we transition from a traditional alliances organization to evolve to one where we're much more focused on production of solutions. Designing with our partners solutions that meet in the market. We're a very channel-focused company. We obviously, you know, you look at the success that NetApp's had over the 10 years with Cisco and FlexPod, that's a meet in the market model focused on validation to provide solutions for customers for industry problems. And trying to replicate that through key strategic partners that hit the ecosystem to do it. And that's been a very effective approach for us. And we spent a lot of time kind of re-crafting the organization to match up both with our BU's and then our delivery through what we call pathways. And that pathway begins from everything from the channels to the GSIs. We have now a new G100 account group and then to our own Salesforce, of course. All right, so what's in it for me as the customer, okay? I'm like, at the end of the day, it's like, okay, you're reorganized, sounds good. Focus teams, highly cohesive, good segmentation, dedicated teams. What's the impact of the customer? The impact for you guys is easier to implement, lower cost, quicker delivery, and the assurance that you actually have a validated architecture that's using best of read components for what you want, as opposed to, I bought a monolithic stack of something and I've locked in and maybe it's, you know, the A piece of this and the B of that, you can actually choose your Lego bricks to put together and we'll stand behind it with the validation that this works. Maybe to just kind of hold a layer back on that. So obviously today we have Andy Jassy on stage with VMware a year later, right? People are extremely cynical a year ago when that announcement went down there. Here they are, they're throwing up their hands. Actually today- Capitulation was a term. Yeah, right, it's capitulation now. But, you know, if you are, you know, now partnering and you're building alliances in the cloud era, three or four years ago, people are saying the cloud, they're the enemy. We can't do business with that. That's what they said, that they're customers, you know, the partnerships, how has that changed and how do you think about partnerships with the cloud providers today? Three years ago, the smart people out there said the cloud is going to kill NetApp. Right. Right? We're an on-premise standalone storage company. The cloud is, it's the end. Well, fast forward to now. The cloud is our best friend. It's our biggest growing area. You look at the business we do with the hyperscalers under Anthony Lai, and that's the fastest growing piece of the business we got. We've made it very easy through OnTap to work in either a cloud-only relationship or a hybrid where you're moving things from on-prem to off-prem and vice versa. And that's become a main focus of our business. And from an alliances standpoint, of course, once you have it in our own key ingredient, then it's what are the partners that we partner with to bring them into that, to make it a more cohesive solution. Right. And then, Senator, if I might have a second question. Of course. So, if I am a customer and on one side, you know, you have your alliance with VMware and on the other side, I have my growing initiatives with AWS or Google Cloud, it doesn't matter. Where does NetApp fit between those two environments? Right? Because you have alliances with both sides. Yeah. Right? What do I count on NetApp for? Because I'm looking multi-cloud, I'm looking at migration. How do I think about you in that? You know, to me, I think it's pretty clear. It's all of it needs data to run, just like software needs Harvard to run on, even though it's in cloud, it's rendered. It is all about the transition of being very hardware-defined, to being software-defined, to being really function-defined. And once you start to modernize an architecture that way or a general organization that's trying to deliver IT services, it's the delivery of those things that start to define where you have to take things that are both on-prem and in the cloud. So the entire thing around multi-cloud sort of requires that you have strategies for things that are in current data centers that just have to become more cloud-like in their functions and their functionality. Delivering it as a service is not just the mantra, but it's the time to value and it's the consumption style. So as an example, like as we're trying to do things on-prem with our NetApp HCI solution, doing embedded OEM with VMware isn't because we want to sell VMware licenses, it's because we want to make it as fast as possible and as easy for a customer to be able to turn it on and start using it similar to your experience buying a new iPhone. We want to have you be able to add software to it like NSX, like VRealize, or a full VMware private cloud stack in something that hopefully will take minutes rather than hours, weeks, or months, because we want that time to value, that consumption experience to be the king and that extends the data protection, that extends the security. We're not just a storage company, we're a data company that's really in the game for the full stack and the advantage we have is that we're in all the hyperscalers and I think we could help VMware there. It was only one. And the piece I'd add, I think that's different than before, is most companies think about alliances as us plus them. And in the cloud environment, it's us plus, plus, plus, plus, plus to get a solution and having a much different approach where it's, okay, we're going to have to be multi-partnered in a cloud environment to go get this done and that also requires a different alliance motion. Less tennis, more soccer. Yeah, exactly. And when you look at it. Great analogy. Look at it. When you look at it. It's all over the surface, it's a cube. This show demonstrates how an ecosystem has really extracted the maximum value out of the partners because there's a ton of this extension of the partner, the channel partner, the pathway partner, to really go and do more so than VMware having to do it all themselves or NetApp having to do it all themselves. It is about that three-way partnership between the product, the solution, and the delivery partner itself. And what did AWS even say to them, they said in the partner keynote yesterday that what they want out of the partners is capabilities. And isn't that awesome? We want competencies and capabilities to understand who can deliver these certain capabilities, security, networking, storage, app refactoring, you know, you go down the list. So I want to ask you guys, well, I got you both here. Pat Gelsinger made, I want to get your reactions to something Pat Gelsinger said two things I want to get your comments on. One was he made a comment that said, no one should ever have to pay for DR ever again, CapEx. And two, he made a comment about how AI is 30 years old and hello AI, good to see you. Welcome to the introduction of AI. 30 years later. I think he said it's an overnight 30 year success. Yeah, overnight 30 year success, yeah, exactly. So one, DR, never pay for DR, CapEx. And then hello AI. So again, that kind of signals kind of what's going on. You got the service model, and then you got AI to an enabler and one is a change over transformer. Your thoughts on the reaction to that, those two comments. I think the DR statement, while bold might not be the solution for everybody. I think there's certain folks that would say, based on their requirements, they have to have a traditional DR regardless, whether it's compliance or whatever else. But certainly, as you look at how the cloud infrastructure is targeted, there's a lot of cost savings to be gleaned from that. And we are absolutely investing in how we take the services we offer and make them much more readily available as a consumption model. As you go, as you consume, as opposed to a traditional CapEx. A little bit over the top, but kind of directionally correct in your mind. Yeah, absolutely. Never going to go away. It's kind of like storage. Never went away. Certainly, I think it will continue to decline and decline to decline. But I also declare it over, people still buy desktops, right? I mean, that was declared dead in 97. Dave and I were just talking about infrastructure. It's supposed to be dead 10 years ago. Right. And I think it's, Pat's always said he's been a fan of NetApp, so I don't want to project words into his mouth, but I think he's been there for us and the majority of the NetApp and VMware interactions at VMware. Make sure Pat were in a NetApp jersey at theCUBE event. Yes, that was a big moment for us obviously. All right, so the AI piece too. So Yo, are there any thoughts on that comment or the AI comment? I'll defer the AI to him, but I would just say that on the cloud. The DR thing is that we already have that in cloud volumes and a lot of the data services we're doing in AWS, the public cloud. So I think we present a clear example of that, AI. AI, Pat's exactly right. Something that's been around forever that's really getting a lot of airtime right now, but he's precisely right. I mean, we see the growth of AI applications and usage is absolutely huge. And when you combine that with the types of instruments that are collecting data, right? What's wired today versus what wasn't two, three, five years ago, obviously the storage company, there's just an exponential amount of data growth that's being captured out there based upon these AI type machines that are only getting faster and smarter. So for us, we're welcoming the 30-year success. It's great that it's here to the party. As we look at that ecosystem, that's where we're heavily investing in expanding our partnerships and our routes to market because we're also focused on that. And maybe just to follow on that. So the traditional conversation people have about cloud is somebody else's data center. It's somebody else's, right? But now the cloud discussion is about, we're just talking about AI, self-driving cars, edge clouds, right? So the nature of where all this data reside is becoming much more dynamic and much more distributed. And that's the point. It's much more distributed. How does that fit into where you guys are going? We think it's great. It fits perfectly with our business model of being able to move your data around in a multi-cloud environment and have it where you need it to be. Whether it's on the edge, even further out, kind of the fog of the cloud or all the way at the center where you want it to be. So we think it fits the model that we have from data everywhere, the data fabric that's really what we've been designing for years and pushing to. This is the realization of that strategy in our minds is that's what we're arriving at. Yeah, partner program, quick update as we wrap up. What's the update on any kind of tiering? You guys have a strategy. You've actually got more partners engaged. Sounds like cloud gives more touch points. Give a quick overview of what's going on. Jeff McCullough is our channel chief. He's done a great job coming in and absolutely driving that program more aggressively out into the field in North America. We've got a bunch of stuff that I don't want to steal this thunder coming up at Insight, but, you know. It's okay. We're not sure what I can steal at the moment. We are aggressively investing in the channel program. We have been and will continue to be a channel-driven company. I mean, even myself as the alliance's head, we look at it always, and Keith mentioned it, that third piece of the three in the box is always who's the delivery partner and how can we help them? And obviously the underlying tentative of that always is, let's make it meaningful. And let's be honest, meaningful to a partner is, they make money, they have services that they can absolutely embrace and deliver. And what's next for the relationship with AWS and what other top partners you have, you mentioned NVIDIA before we came on camera. What's next for VMware and some of your top name partners? We've got some big announcements coming up with VMware. I think if you want to tease one of them or... You know, the reality in the world is that, you know, if you want to buy solutions for VMware, a VMware-validated design is kind of the pathway to really getting the mark of validation. And so we're on that path as well. We're looking to get that down the road. We've got some early tracks to it. We announced the first leg of that at this show called the Net Validate Verified Architecture for VMware Private Cloud. That gives us the first proof points that we're running the entire stack on NetFHCI. We're going to use this as a way, along with ONTAP over time, you know, to be able to have on-prem solutions as well as cloud volumes with, you know, futures, they showcased it yesterday with some future previews of VMC with cloud volumes. So look for that to come in the future time frame. ONTAP AI. ONTAP AI is just a... Back to your AI question, we just announced a joint meet-in-the-market solution with NVIDIA, a converged architecture where it's NetApp storage, NVIDIA's DGX CPU servers. We've got some switching in there from Cisco, and you've got a very solid converged infrastructure that goes specifically and targets the AI market. And AI, they're a pretty strategic partner to you guys at NVIDIA. They are. I mean, they've been hot lately. They are here. There's a lot of guys smiling in that booth over there. They look pretty happy. You can't make enough GPUs for those blockchain miners. And I think the key factor for the new Alliance model is that the context shifts depending upon the market you're trying to reach. So if it's the AI market, typically NVIDIA is going to lead that conversation. If you flip it to the EUC market, and you look at GPU acceleration for VDI, they're an ecosystem to VMware driving the horizon package. So it's a very interesting context that you have to be very savvy on to understand how the technologies fit together in a way that the solution partners already today are putting them together for customers. And that AWS and all the hyperscalers know natively. We just get a lot of good props. Congratulations on your success. Notable hallway conversations certainly here and out in the field. I talked to customers, you guys are with the solid state drives and the software investment that we made. It's paying off. So congratulations. Flash has been huge for us. And good luck with the new reorganization. Thanks. It's great to see you. Soliflare kind of come through there. We're here on theCUBE. Stay with us for more live coverage. After this short break, I'm John Furrier with Alan Covey. Be right back. Stay with us.