 Live from Las Vegas, it's theCUBE. Covering VMworld 2017. Brought to you by VMware and its ecosystem partner. Hi, I'm Stu Miniman here with Keith Townsend, and you're watching theCUBE's broadcast of VMworld 2017. One of our guests earlier this week called this set the punk rock set. And one of my guests here in a preview said that this is going to be the battle of the Baldi. So I'm really happy to bring two of the leaders of two of the hottest topics being discussed this week. Welcoming back to the program. Dom Delfino, of course representing NSX and security, the NSBU and Lee Caswell from the VSAN team. Gentlemen, thanks so much for joining us. Stu, how are you buddy? I'm doing phenomenal. Dom, are you making network great again yet? It's fantastic again now. Yeah, we're making networks fantastic again. Yeah, and I'm expecting, I expected you to show up a little more bling because, you know, we were talking Silicon Valley, your group is reaching the three commas of a billion dollars. So, let's start there. I mean, you know, NICERA when it was bought, you know, a few years back, if you're, you know, over a billion dollars, you know, SDN was something that, you know, we all in the networking world was talking about. And, you know, things have changed. You know, I don't hear SDN talked at this show. It's, you know, real customers, real deployments at pretty good scale. The interconnected fabric, if you will, for VMware's cloud strategy is your group. Is that a success? Yep, absolutely. So, you know, I think Stu, these major transformational shifts in the industry are, take time, right? You know, you're not going to undo what you've done for the last 25, 30 years in a month or a quarter or a year. And I think, you know, now what you see, what you saw initially was adoption of NSX for automation of network provisioning. Then when you saw a second to that was micro segmentation as a defense and depth strategy for our customers. And now you see the multi-data center moving into the hybrid cloud. VRNI is a service, NSX is a service, app defense, layering additional security capabilities on top of that. And as our production customers sort of adopted it in the beach head methodology, operationalized it, you see additional follow on adoptions. We've got one customer running 18 data centers on NSX today. So, this is becoming more and more mainstream. And as you look at our approach moving forward in terms of where we are on the software defined data center journey, how that connects into our strategy for VMC on AWS or VMC on BlueMix. Are you sure Guido Appenzeller yesterday demonstrated cross-clad into Microsoft Azure? When was the last time you thought, you see that at VMworld, huh? Yeah. Hey, Lee, I got to bring in here. Okay. Because it's funny. I've lived in the storage world. Networking people throw in all these acronyms. I know, they're so excited though. Because, come on, don't we know like NSX, it's not simple. Who's the one that's saving customers money so that they can buy all of these solutions? NSX is a great value, but VCAN pays for the ride, right? Here we go, right? They do, we'll happily accept it. I mean, we're consolidating storage in a way that basically brings back the magic of consolidation, right? The first time you consolidated using VCAN, people called it magic because you consolidated servers, bought shared storage and had money left over, right? Now we're doing the same thing again, right? With now storage, right? And what's interesting is this is a huge career path gained for the virtualization administrator. Wow, so talking about big and disruptive, VCAN, you know, I got to give you guys a little bit at the Vodgeball tournament benefiting wounded warriors, the VCAN team lost to the Dell EMC team. Can you imagine? And did you see how valiant we were? I mean, yeah, it's fall hard, you fall hard. Yeah, you fall hard, but with that said. You look like you could have used a little youth on that team, by the way, Lee. So a lot of co-opetition, you walk the show floor. Yeah. We usually call it this storage world. I think it's fair to say it's HCI world now. That's amazing, right? How is VCAN fitting into the larger ecosystem? Listen, we announced, Pat said we have over 10,000 customers now, right? And yet VMware has hundreds of thousands of customers, right? So we're just getting started here. And what you're finding is, you know, the two assets to bring to this party are a hypervisor or a server, right? If you don't have either one of those, it's going to be very difficult because if you go back and you'll appreciate this, right? Remember our type two hypervisor? Yeah, I vaguely, I almost wrote about it. I'm like, wait, they don't even exist anymore. Well, workstation is still right. I mean, if you start thinking, right, that was a hypervisor on a guest, right? And so what happened though is as soon as ESIX I came out, right, integrated the compelling performance advantages, the resource utilization, and then the idea that, hey, I got a common management through vCenter, right? That's what's playing right now is users are trying to find leverage and scale. How do I do that? And that's where, you know, we just see the massive adoption of VCAN. All right, one of the reasons we brought the two of you together though is because while, you know, Peter Bonner and Chocolate are, you know, great on their own, the Cloud Foundation. I have the whole sandwich now, still. Yeah, yes, yes. So, you know, Cloud Foundation, you know, NSX might be the interconnected fabric between all of it. It seems Cloud Foundation is that, you know, solution. There's a whole business unit. Put that together and drive that. So talk about how you feed that solution, how that changes the way you think about it. Yeah, so, and I think, you know, probably the most interesting thing, and I've only had the VCAN team for six months now, but I think the most interesting thing for me in VCAN is it scales down market very well as well. So we have massive enterprise customers, right, who have, you know, large global deployments of VCAN, but you can take VCAN, put it on three nodes and see value out of that, right? And I think when you look at, you know, this is the year of Cloud reality, I'm calling it now, Stu, right? That's what's happened here this week at VMworld. When you look at that, I think the most fundamental thing that customers are taking out of this week is my private cloud has to be as good as the public cloud offering, okay? Now, if you're a Fortune 1000 customer, you certainly have a lot of resources, a lot of talent, a lot of expertise, a lot of history, and potentially a lot of budget to throw with that problem. But if you're a mid-market customer, right, and you look at, I need to build a little private cloud that's fast and easy, right, which was the two primary reasons to adopt public cloud, you have a good place to start with Cloud Foundation, and I think it's just the beginning. So you get vSphere, you get NSX, you get vSAN, and you get STDC manager to do life cycle management. Certainly you could layer vRealize on top of that for automation, orchestration, provisioning, and self-service as well. And it really allows everybody to start to take advantage of the capabilities that only existed in the major cloud providers before on-prem in their own data center. So I think as you look at Cloud Foundation, and I'm working very closely with John Gilmartin on this, moving forward, it is going to become the basic foundational element pun intended, right? For many of the VMware offerings moving forward as we turn into next year, that we're looking at this very closely, and we have a lot of plans, is that being the base to build off of in terms of how we help our customers get to this private cloud? I need to hear your perspective. Exceptionalism. Because some of this Cloud Foundation, there's got to be some differences when you talk about some of the deployment models, whether, you know, where I'm doing it, how I'm doing it, you know, VMC, the VMware managed cloud, I guess, on AWS, VMware on AWS, something, getting a lot of buzz, everybody's digging into it. You know, what's it do today? What's it going to do in the future? Well, you know, I thought it was really impressive when Andy Jassy got up to, you know, and basically said, you know, we've been faced with a binary choice. And customers want these to be integrated, right? And then the second day was Google, right? Talking about how we're taking developer tools, right? And making them common. So that element, now storage people, think that the strategic engagement with the cloud is about data, right? Putting a VM in the cloud, I mean, that's a credit card transaction. But once you put your first bite of data into the cloud, now you take on sovereignty issues, you think about performance and where you're going to get guaranteed IOPS out of it. You start thinking about like, how am I going to move that data? It's not fast or free, right? Is anyone who's emailed a video knows, right? So you start thinking that it's the data elements and what's now really powerful. And we saw some of this in the demos and general session. Once you have a common data structure, we call it vSAN, right? All the way from the edge into the data center virtual private cloud, then into the public cloud. Now I've got the opportunity to have this really flexible fluid system, right? All virtualized. It's so powerful, right? About how I can manage that. And we think, it'd be interesting, does the virtualization administrator then become the cloud administrator, right? So let's expand out on that. vSAN everywhere. vSAN in AWS, vSAN in vCAN, vSAN in my own data center. How do I protect that data? That seems just, is this where NSX comes in? How do I protect that data? Can we let Lee talk to the security first? Because Dom's going to talk to Mike too much. Where's the security? Is the security in vSAN? Because I know Dom, you know, we'll talk to him first and then I'll correct him, okay? Well, I mean, you start with the security, like encryption on the data, right? I mean, one of the things why vSAN is so portable is because there is no hardware dependency. I mean, we're using like all of it, you know, we support all different servers. There's no proprietary cards or anything, right? That's sticking to these servers. So we can go run that software wherever. Now, we're also then, as a result, doing software encryption with our latest release. On 6.6, software encryption allows us to use common key management partners, right? And so we use those partners, including high trust, fails for metric and others. And now you can have key management regardless of where your data resides. So we start there, but then what customers say really quickly, right, is if I start moving something, they say NSX, help me out, right? Yeah, so I think Lee took to a very critical part of it, the ability to encrypt that data at rest and, you know, as it transits, there's really three elements to this. And it's the data itself, which VCN 6.6 introduced, right? The ability to encrypt that data, microsegmentation and upcoming D&E to both protect and encrypt that data while it's in flight. And then now if you look at that app defense strategy, right, it's to secure that data while it's being processed as well at the host level in the guest up at the application layer. So, and I think, you know, Stu, this just continues to be a huge challenge for our customers, particularly with the breaches. We saw what happened with WannaCry, with Pettia, with Non-Pettia, the different versions of that and Electric Blue and all the pieces here. Tom, just, you know, your boss, who's on theCUBE on the other set right now, said, as an industry, we have failed you. So, Pat Gels is in the keynote. So, we're solving it, you know, we're going to have, next year, I expect both of you to have this all fixed, right? One of the things, you know, you asked, like, you know, with all the HCI enthusiasts that are out there, remaining companies. You know, how do we differentiate? Well, part of it is, hey, you know, this is not just a drop in a little box, right, someplace, right? This is how you go and modernize your data center. Alec basically tied into the complete software stack. And regardless of the timing on which you're going to go and deploy that, right? If you're going to deploy the full stack today, that's a VMware Cloud Foundation, awesome. If you want to go start with vSAN, great. And then add in other pieces, or you can start with NSX. In any event, the common management is the piece that we really think is going to go and set us apart, right? As a part of a, it's an infrastructure play, not just a point component. So, we're, hold on, I won't let them finish. I mean, I think three years ago, if we sat down here and told you, you're going to encrypt yourself or define storage in software. No hardware requirements. We probably would have, you know, I probably would have said I was nuts for saying that. You definitely would have said I was nuts for saying that. So, look, this is critical. And we are hyper focused on solving this problem. And what customers have to recognize is that you have to make some foundational architectural changes in order to fix this problem. And if you don't, it's not going away. It's only going to get worse. So, I took a peep in at FutureNet. First off, VMware does an awesome job of this conference within a conference. It is fun. A little bit over my head at times. Which, you know, we have to be getting that same reaction from the CIOs that this stuff, even when we're taking stuff that we know very well, VMware, vSphere, starting with that, adding on vSAN, again, the conversation time, we can encrypt at software, both network, in compute, in storage, that's a little deep. But now we're talking about this cross-cloud conversation that FutureNet is most definitely addressing. How's that conversation going with customers? Are they finally starting to get their arms around the complexity of this issue? Yeah, absolutely. Keith, because when you look at our multi-data center functions of NSX that we had introduced back in NSX 6.2 at VMworld three years ago, two years ago, three years ago, I'm getting along with the tooth here so I can't remember even some times anymore. Those were the foundational elements for the components across cloud today. So many customers who started the NSX journey with one use case and one data center and expanded it horizontally and then down through a number of use cases and then across to another data center are already taking advantage of those cross-cloud functionalities from private data center to private data center. Now we've just taken them and extended them into Google Cloud, Azure, and AWS as well. So the customers who've been on this journey with us from the beginning have seen this step by step and it doesn't really seem like such a big leap to them already. Now obviously, if you haven't been on that journey, it seems like, hey, can you guys really do this? And yeah, we've been doing it from private data center to private data center. Now we're just bringing that capability to do it with public data centers. And certainly the partnership with Amazon has a tremendous help to that as well. Yeah, when customers are buying into these solutions, I know you like to look at it as a platform. So let's look out a little bit, wanting to talk a little bit about what we expect from the futures and the one I'll tease up if it makes sense. Edge computing, kind of IoT as a big one, I have to expect that both of you have a play there. So, you know, let's- Yeah, and I guess I'll touch on that in two pieces. So I think you sort of see us extending this up a little bit initially with PKS, with Pivotal Container Services, with Kubernetes on Bosch, and the ability to do rolling upgrades, and NSX is embedded in that solution, right? It's not a belt-on offering. It's natively part of that for all the reasons that we talked about earlier. And I think we see a lot of opportunities as it relates to edge computing, right? And I think this is something that, wasn't it fog computing like seven years ago, Stu? I think about it. Your former employer was one that was pushing that, yeah. What happened to that? Yeah, I have heard it come back because from data center to the cloud, from the cloud to the edge, but, you know, terminology does matter, but I hear your point. So I think, A, IoT is the biggest security challenge that we face, right? That's number one. If you think it's bad now, it's about to get a lot worse with the wholesale adoption of IoT. I think that when you look at the remote office, the branch office, what's going on with the transition with wide area networking right now, I think there's a tremendous opportunity there. Clearly, we have a play where you can provide sort of a branch in a box with our technology, but I think there's a lot of things that you'll see coming from us in the near term and as far as innovation that we could do there to really enhance edge computing as it relates to IoT and certainly use a computing platform with Horizon Air and our, you know, of the legacy air watch nature is an important part of securing those edge devices as well. So, Lee? Yeah, the VCN side, so this week we announced the HCI acceleration kit and so that's basically a way to take care of, take advantage of single socket servers, right? And one of the things we're seeing, right, is for bandwidth reasons and economics, you don't want to have everything centralized. So the ability, particularly in an IoT environment, but also in retail or robo, if you've got hundreds of stores, right? There's no way to put a sandbox and a fiber channel switch and separate storage and scale that, right? So what we're doing is we've got a very cost effective license, right? Incredible where you can get with hardware now from our set of partners, you can go and drop in a three node, fully configured VCN plus vSphere for under 25K. Drop it in. Now I've got a virtualized environment, unlimited VMs. It's this sort of thing where we're helping bring the, basically accelerate the adoption using HCI of enterprise modern infrastructure outside the data center. So last question around customer adoption and again, acceptance of this model. The push, I think A16Z said that the edge is going to eat cloud computing. Where do you guys see the real world, the ground? Is it a push towards the cloud or is it this combination of doing? You know, in my experience, right? I mean, this is like an accordion, right? It goes in, it goes out, it goes in, it goes out. Why? Well, it goes in and out based on economics and bandwidth, right? And so you start looking and saying, now until HCI came out, just wasn't really feasible to put enterprise infrastructure at the edge, right? So things were centralized, right? Well now, right? Now we start distributing again, right? The cloud is an example of more centralized, right? But I think we're going to see both, right? And you're going to see this, what's particularly interesting right now is right, the new advances in media, CPUs, low latency networks, makes it possible to use these, I call it the serverization of storage, but really it's a serverization of the modern data center, right? And which, by the way, is common to how clouds are built. But does that make the overall IT management more complex as I build out that control plane? I'll give you an example from this morning. I was meeting with one of the largest banks, right? And they were looking at HCI, I think people used a lot of sand storage in the past. You know what his ask was at the end? Could you give me the org charts of customers of my scale who are using HCI? Because I want to go figure out how I hyper-converge my team. We'll never be fast until we go and get teams that are working more closely together where they start from the VM level and then they look at the network attributes and the storage attributes and the compute attributes. And that's going to speed up everything. And I think Lee is a 100% spot on there and every customer I've talked to this week, you have to make the transition to an infrastructure team, not a network team, a storage team, a server team, a security team, you're an infrastructure team. And this is why the app developers have been going around you, right? And this is why you have shadow IT. This has been, it's because they want fast and simple and they don't want to have to deal with four different people, right? They don't want to have to deal with a serialization of a deployment that they're left waiting for the lag for. And I think, you know, in terms of the edge computing, I think, you know, you related to one of the conversations by Andrews and Horowitz, I think that might differ a little bit in the consumer space and in the enterprise space as well. So it may be the case in the consumer space that it erodes some functionality from the cloud, particularly on the IoT side of things as well, or driverless cars and things of that nature, where it makes sense that if you get disconnected that you still need to have some computing capacities so you don't crash, right? Crashing is not good. But I think the behavioral change, the people change, the mindset change is much more challenging than the technological change. Everything you haven't done before seems complicated until you actually do it, right? All right, well, I've talked to lots of customers, actually, some of that organizational change is helping them to tackle things like those new architectures. Security is one that they set up. I've been leaving it for too long and now absolutely front of the table. Dom Delfino, Lee Caswell, always a pleasure to catch up with the two of you. Hope it lived up to your expectations that, you know, we brought the heat. Keith Townsend, I'm Stu Miniman. You're watching theCUBE, back with lots more coverage here from VMworld 2017. Thank you for watching theCUBE.