 Live from the Mendeley Bay Convention Center in Las Vegas. It's theCUBE, covering VMworld 2016. Brought to you by VMware and its ecosystem sponsors. Now, here are your hosts, John Furrier and Stu Miniman. Okay, welcome back everyone. We are here live at VMworld 2016. This is SiliconANGLE, media theCUBE, our flagship program. We go out to the events and extract the signal from the news. I'm John Furrier, my co-host this week, Stu Miniman, our next guest is Steve Herrod, who's a partner at General Catalyst, VentureCable, former CTO of VMware, who's been on theCUBE seven straight years. We've been doing theCUBE seven, Steve Herrod. Welcome back, good to see you. Not tired of me yet, I love it. Cube alumni and proud of it. Seven years, Chad Sack was just on earlier. He's been on all seven years as well. You were there at the beginning when we had the little booth and the small little cameras now. We've got the whole set here. We've got a double set here. It's fantastic. The content has gotten really good. We were just talking about this, in terms of covering a lot of different pieces, and we're calling it Twitch for the Enterprise. A good way to end the stream. Yeah, we'll wait for that buyout offer from Amazon for like a billion dollars. Maybe get some funding to help out. Seriously, we're investing now. This is a quiet year on the VC front with the market. A lot of unicorns are already out in the marketplace, but Enterprise is still hot. A lot of action going on, certainly around the VMware ecosystem, the shift to the cloud. You're seeing a lot more inter-cloud conversations going on, multi-cloud, dogma by the certain vendors like Amazon, Microsoft, with their perspective. I mean, Annie Jassy would say, hey, you know, why would anyone want to build a data center? And that's their pitch. So, what you're taking out of the landscape, you're looking at deals. What's the VC future look like from an investing connected dots? Yeah, absolutely. And I think this time is, as it has been for the last couple of years, it's a confusing time. There's all kinds of options. Is it SaaS or my own applications? Is it on-premises or is it in the cloud? And I think that's a world that's really good for investing and finding companies that can help. It's very good for analysts and people who can go deep and explain it. And I think we saw it in the keynotes today and I think we're seeing it certainly in my own investment strategy. It's about how do you take the customers from where they are now to the right destination? And sometimes you want to evolve, sometimes you want to throw out everything you have and go whole hog into the other ones. So whether it's containers, whether it's SaaS, these are all the things that you have to deal with right now. So the stack, obviously, is changing, right? You're seeing Sanjay Pune talking about end user computing, the unification almost reminds me of the old days of dial up and network access and authentication into the network. But at the top of the stack of the unification, then you got the container madness and now you got the DevOps underneath with CloudOps now with VMware. Where's the pressure coming from? Is it coming from the infrastructure? Is it coming from the apps? Where do you see the enablement coming from? The good news is that, well, the hard news is that there's three pressures all at once. There's the classic infrastructure stuff we've always lived with, which is do more with less money, be more efficient, manage complexity. You have the developers, which is everyone has talked about for a couple of years now, have more power than ever because they are the lifeline to revenue and to profitability. And then you have the end users and whether they're internally or externally, they have to have the great experience and they have to be secure as they're doing it. So these forces are all hitting each other. And again, whether it's, I think Sanjay had a really nice way of talking about it all and I think that the pieces are in place to use identity and to use the other aspects to combine them. But it's super hard. And I've seen companies that have tried to evolve and do it all in one infrastructure. I've definitely seen a lot that create an entirely different greenfield silo or a greenfield area for trying out these new ideas. But this next couple of years, I think it would be the same way. Just a lot of tumult and a lot of experimentation. South team was talking earlier about hacking phase of the creativity now. It's hard to standardize what you don't understand. So what's your thoughts on that? Satcham's great. He's one of my favorite people to work with over the years. And obviously interesting things ahead for Pernex and Nutanix, both great companies. You know, at the end of the day, my world now is finding the people who are doing the innovation and thinking ahead of time how they're going to get there. And as you always hear about in the venture world, it's you have this great plan. And who's it? I think it was the philosopher, Mike Tyson, who said you have a great plan till you get punched the first time. So I think the real smart startups now try something. They find out what's working and they're very quickly able to move to something else. And whether it's the developer or security or whether it's on the core infrastructure, that's the name of the game for small companies right now. Otherwise you get rolled over by one of these giant VMoths. So Steve, you spent a lot of time looking at the developer space. I want you to bring that to like the VM world environment. Last year, they did an event. I believe you were part of that. This year they kind of moved to the track. You know, when I talk around the show, the general feel is that, you know, VM we're still talking to their base. They're talking to the operators and the administrators and they don't really speak the language of what's happening there. Yeah, I thought Kit did some good things in the keynote. We should talk about some of the open source things, but it's not like VMware embraces open source and does their business model. And we're still not sure how anybody's going to make money on containers other than, you know, say, you know, your company that just got bought today by Cisco. So I wonder if you could kind of expand on that. Yeah, it's a really good point. And I think no matter what being able to speak about developers matters for everybody right now. And I liked, Kit was a hipster today, I thought. It was a good hipster look. But I do think it was really important to pivot a little bit. The people who buy VMware and who implement it for the core section are the infrastructure people. And they have to be able to speak the language of the developers. But the Salesforce, the channel, the product trust, all of that is around the infrastructure and how you enable it. So I think the shift made a lot of sense. I think if you go out and you're talking to infrastructure people about how you build a cool Ruby on Rails app with multi-tier MongoDB and blah, blah, blah, it just doesn't sit there. So instead, what you have to be able to say is your developers want to do this. They want to do it quickly. They want to use containers. And I think what VMware is trying to do is provide a nice set of solutions where they can both speak the language and deliver on that. So VMware has also been struggling, maybe struggling is the wrong word, but kind of the cloud management and orchestration piece. Cisco just bought ContainerX. Maybe you can talk about that layer, which I always said when I became an analyst, it's like I can just every day come on in and say, well, the problem with cloud is that security and management are still a problem. Six years later, it feels like many were there, but are we maturing? Are we making progress there? And any advice for VMware or other ecosystem players? The joke we used to make is that every infrastructure company has to work on efficiency, control, and choice. And I think that actually always holds because there's always heterogeneity. You always have chaos that you have to control and then obviously money or performance matters. And I think that's the case now as well. So everything that I focus on personally investing in has heterogeneity at the core of it. I think that's why VMware got to where it is is by trying to tame the mess of at the time servers. And now it's the mess of clouds or the mess of storage and try to get some layer of abstraction that works across them. So I think that's what the smart investors, smart startups and smart companies are doing right now is how do I make sure that you can take advantage of all these choices that are out there? And right now the chaos in the container space is you all cover a lot of them, right? There's so many frameworks for doing scheduling. There's so many different places to put them. You can have a lot of hubs for grabbing your images. And I think VMware's laid out one vision for doing it. Container X, a really interesting approach from some former VMware people. And they were trying to say heterogeneity also costs in whether you're running Windows containers or Linux containers, or they were also looking at am I going to run this on top of VMware or on top of Amazon or on top of Azure? And so again, I think that the startups that embrace the heterogeneity and whenever you try to create this layer of abstraction, the biggest risk historically is that you dumb down all the interfaces and you make it lowest common denominator. And so the real trick is how do you make it portable enough and abstract enough, but not lose some of the reasons people are going there? So I think this holds across the multicloud strategy as well, obviously VMware laid out their approach for leveraging their core assets to have something in there. A lot of other approaches out there that lets you have security work the same way across environments, core management tools like provisioning have been bought up by a lot of companies because it's trying to do another way of connecting the clouds and I think the next few years are going to be all of these multicloud approaches and a few of them will stick really well and a few won't. So what's the big taming challenge that VMware's doing now that you would say that that would be an opportunity to clarify to the community and to customers? Where do you see that the major, the core taming area is blank, built on the blank? They're trying to do it in a lot of areas, just watching through the keynotes and going through it. Obviously they see the network virtualization as a key part of it. They see vSAN as a container that works everywhere and announced a good relationship with IBM. We'll see how that translates over to Google and to Azure and to Amazon where more of the traffic is today, but they're trying to not surprisingly use the core assets that they have to make some level of commonality across them. I've been personally focused as we've talked about in the past. I think security is the number one thing to get right across the multi-cloud world. And so that's been my obsession is what are the key parts around either user experiences or network or anything else that you need to get right there. And I like to cut off kind of a smaller bite than trying to do the whole thing, trying to make it the same. So here's the update on security. We know you last time you were on your fast two times has been a thesis for years for you now, two years. Any change, any movement and any good, clear skies ahead is that what's the status and what's your view? I mean, obviously everyone gets more announcements. We're all fine with that. You know, there are two big trends that are going on right now that are actually fantastic for the space. Fantastic in a bad way. There's plenty of more break-ins and they're getting more and more intricate. But two things going on. One is there's a huge dearth of security professionals and it is one of the hottest depressions. You can get paid a lot, encouraging kids to go into security. But because they don't have enough people, the tools and the things you need to do are getting more important. So all these tools that have all these false positives and make you spend your time are going out of fashion. The other thing that's really interesting though is just the types of problems that are coming. Everyone's a cat and mouse game and so people are trying to get in through, everyone's getting through PDFs now and ransomware is like the hottest topic where they lock your stuff up and you have to give them bitcoins to get rid of it. So trying to navigate all the spaces and provide solutions that are easy for mere mortals to use and don't have a lot of false positives. So the onboarding of people, obviously that's going to happen. But that's not growing fast enough. So the automation behind security seems to be the trend. Do you see that? 100% right. It's the two things you have to do. So in a world where there's less people or more things needed, you have to automate more than ever. So you need playbooks and you need automatic recognition and then you've got to reduce false positives. And until you really spend the time in these socks, the number of events that are raised is like curious things someone should look at are ridiculous and there's a crying wolf syndrome and there's just not enough time. And so they can't go everything. And as a result, the ones that really matter are getting avoided. So give us the update on General Catalyst. Fresh powder left in the funds. You guys are doing a lot of active investing. Give us the update. Partners, any new partners you've added? Any new deals? Give us the update on the VC world. Things are great at General Catalyst. We have four partners now in Palo Alto. The latest is a gentleman named Phil Libin from Evernote, awesome guy. Very colorful and has a real good taste for what's going on there. But now we're in New York, Boston and Palo Alto now. It's a great time to be an investor despite people talking of whatever is going on. And the sky's the limit in terms of interesting companies. I'm still, I'm the enterprise guy and loving it. And as we've talked about, it's interesting times for sure. Yeah, the enterprise is hot. So Steve, you were at VMware when it was acquired by EMC. There was a lot of, you know, machinations as to who controlled what and where it got. Just announced today that on September 7th, Dell's going to complete the acquisition. You know, what's your thoughts on this and kind of for the future of VMware? Yeah, full circle coming around. Genuinely, everyone I've talked to has said that Michael Dell in particular has done a great job of doing what he says and saying what he does. And so I know even at the technical level, the folks have been really impressed. So it'll be interesting and all the dynamics of partnerships are going to play out as we go. But I think everyone's going in with the right attitude. And September 7th, we'll get to unveil and learn a lot more about how it plays out. Great, that's the official date. It was announced this morning. Steve Herrod, thanks for coming by again on theCUBE's seven straight years. theCUBE's been alive and you've been on every year. This is VMware CTO now as a top enterprise VC, former part of the V Mafia, VMware Mafia out there, Pete Lincini, Jerry Chen, yourself. And then there shouldn't have been maybe more. Carl Asherbock at Bitsagoya. Pete Casado. Martin Casado, can't forget those guys. Both CUBE alumnus, by the way. CUBE alumnus and VMware Mafia. Congratulations and good to see you. Always a pleasure, guys, thanks. You're watching theCUBE here. VMware all 2016 inside the hang space at Mandalay Bay. I'm John Furrier, Stu Miniman. You're watching theCUBE.