 Live from Las Vegas, Nevada, it's theCUBE. Covering AWS re-invent 2016. Brought to you by AWS and it's ecosystem partners. Now, here are your hosts. Okay, welcome back everyone. We are live in Las Vegas for day two, our day one, day two of theCUBE, but day one really of Amazon Web Services, AWS re-invent 2016, their annual conference. 32,000 people, the hallways are packed. Stu Miniman and I are co-hosting. We have special kick-off segment. We have the chief operating officer of VM where Sanjay Poonan, CUBE alumni. Sanjay, welcome back to theCUBE. Thanks for taking the time to swing by theCUBE and do the kick-off. Stu, great to see you. We break down the editorial kind of narrative what's happening and sharing that with the audience. So appreciate your input coming on. Certainly want to get the update on VMware. But Stu, we heard Andy Jassy up there, classmate of yours at Harvard Business School, really kind of had a spring to a step. You can see the moment now where the world is kind of crossed over to seeing what Amazon's all about. And I've always said to Andy, he's misunderstood. A lot of people are misunderstanding Amazon. I don't think anymore. Not a lot of people giggling about the relevance of AWS. Your thoughts guys on where we are and what Sanjay, your view here, what is the awakening moment here? So John, if I can start, one of the things I think is an industry we've just understood, this term hybrid been thrown around a lot. And what we've looked at is, most applications don't live in seven places. It's like, okay, I have lots of applications. I have lots of things I use. SaaS is huge. I remember the first time we talked to Sanjay back when he was talking about the huge explosion of mobile back at SAP. And Amazon's definition of hybrid didn't mesh with the way most of us looked at the world because customers have data centers. Lots of customers are using VMware and it was like everything's in the cloud. And Andy came out and said, look, it was this by two choices and it was tough. And we've got VMware and we've got Amazon and now we can do VMware on AWS. So they said, here's one choice, take my virtual machines, host them, it's still VMware, everything you like using everything. And then the next step is like, oh wait, and we're going to put this edge device to be able to put serverless Lambda stuff out in your environment, not only for IoT, but also some other applications. So the new hybrid is definitely very interesting and there's a lot of nuance there and that's why I love to get Sanjay's view on that too. Yeah, I know. I think guys, I have two or three takeaways. It's a fabulous show, going from 19,000 to 32,000. I feel it's sort of a continuation of VMworld, just excited to see the momentum. And we're very honored to be not just here, I'm a friend of Andy's, but also that Pat on stage. I never thought, I never dreamt that day would happen, but it was certainly a goal of mine to see that happen. I think I have three takeaways from watching the keynote and sitting up in the front. The one is, it started off as a developer and consumer brands. He talked about Airbnb and Netflix and so on. There's some serious enterprises. When you get the biggest brand in the world like McDonald's, FINRA, NL on stage, so enterprise traction now is legit and Stuart builds on your point of hybrid. Number two, they're really going off the database market. I mean, other than enterprise, some of these things, you could have counted the number of mentions of Oracle. I mean, they are going off the database market really in big force. And no mention of Microsoft, by the way. I mean, there was a few of them, but really the database market for them is a big market. It is very, very clear. And then I was very impressed by their forays in the machine learning AI. They talk about Lex and what's inside of Lexa. So what they're trying to do there to make that a platform. Those are probably two or three of my big takeaways. In the enterprise segment, obviously, we were really excited to be there on stage with Pat and Andy. I want to get your thoughts on your customers that you guys have a VM warehouse to the deal you done with AWS. Pat Gelsinger on stage, laying it out again with Andy. We had that original reporting a couple weeks ago in San Francisco, but you also had a history with SAP. And Vishal Siddhika, going back to 2000, was talking web services. Really the beginning of that API vision. SAP had that and then he left with the Infosys. But no, Jassy picked up that building blocks and stayed on that course when it was completely against conventional wisdom. How do you see that now playing out for customers? Because the world is certainly API driven. The database and APIs are now seem to be, quote, sticky, lock-in spank, if you will. I mean, competitively that's an advantage. Your thoughts and where VMware sees that cloud. Yeah, you know, ironically, the last time I was at AWS here in 2012, I was on stage with Andy announcing SAP HANA on AWS. And you know, I think when we sort of thought through our cloud strategy, which I think our customers told us last year was sort of cloudy, it was not clear enough. We began to rethink things. I have had a strong friendship with Andy as a classmate of mine at Harvard Business School. Pat, myself, Ragu, who's really been the author of a lot of the software defined data center, began to start working with AWS. And what formed over the last nine or 10 months in lots of good discussions behind the scenes was this vision that he talked about today where in that sort of platform, you don't have to choose between on-premise and cloud. You have the ability to get the best of both worlds. He showed it as two doors, both of which could be open, and VMware cloud on AWS now brings the benefit as we launch it. We had five or six good logos on there. So I think this whole world of developers and IT operations coming together is really what we want to see happen where you can take an existing application, extend it into the cloud, and then build a bunch of the developer services that Andy and the team are doing such a prolific job of expanding. Yeah, so, Sanjay, you've been here since the beginning and you know Andy. We bumped into, you know, we were talking to James Hamilton last night and the tech community, it's a small group. We all kind of talk, we know each other. And, you know, but James said is it was, you know, just kind of how humble those guys are. He said Andy and James were walking. People are snapping photos with them all over the place. They're asking for autographs. You know, this is a rock star. This is like the Super Bowl of what's going on. We've asked Andy to ask, you know, did you expect that this is where it was going? They were like, we expected big things, but wow. You know, what's your insight just kind of personally seeing Andy? It's 1997 when we graduated. So it's almost 20 years next year is our, you know, our reunion event. I'll probably see him again that. But I'm a very good friend of his and I couldn't be proud of him. Because I think even as his classmate, I wouldn't have thought that he would have gotten so into tech. I mean, he was a smart guy out of Harvard undergrad and then at Harvard Business School. But, you know, he went in as a TA and he's told the story very well. A technical assistant to Jeff Bezos. Experiment with this idea, I think 10, 12 years ago. And if there's one thing that I respect about Amazon is there's that maniacal focus on the customer. And one thing that also unites us with some of the things we value at VMware is the focus on innovation. So you put those together and just sort of a down to earth humility where if you approached him, you know, even with all the success, he would probably say there's so much more that they want to achieve. That type of combination is an inspiration to many people. Because there's a lot of smart people today. There's a lot of hardworking people here. There are very few people who are smart, hardworking and humble. And I think that's a rare combination and it's great to see tech leaders like him and many others I respect. Well, the thing about Andy though, I want to encapsulate that. The thing about Andy, I want to get your thoughts on how that's playing with the VMware because your relationship of a VMware with AWS is not a culture clash. It's a synergistic combination of very geeky. VMworld is a show where a lot of learning, a lot of super geeks. Amazon, again, developer, super geeky now enterprise, kind of colliding together. But one thing about Jassy that I noticed and sitting down with him so many times is that he's got a great ability to take chances and he's very agile mindset, both on how he manages and the products. This is the new normal to lower the price for customers, increase the amount of services, be agile, not bureaucratic. They double down where it works, kill what doesn't work, move very quickly. Is VMware taking that same approach and how do you guys adjust? COO, why does VMware adjust to the new normal in cloud management execution, product leadership, differentiation, your thoughts? I mean, we're very fortunate if I could talk to just a few seconds about Pat Gelsinger, Pat's an innovator himself. I mean, you know, you look at his 30 year history at Intel, there's a CTO there. So he brings that same deep rooted innovation culture and that goes back behind him to Paul Moritz and to Diane Greene. So we have a very strong innovation culture. The leaders within the company celebrate innovation. And you know, quite frankly, as we began our collaboration with AWS, there's probably no company between the two of us that know more about compute and then you extend that into areas like storage and networking. I mean, the talent between our teams as we designed this together has been fabulous to watch. We're completing each other's sentences. So when in this new world of cloud you have to combine that innovation spirit with speed. And that's one thing we've sought to do a lot more with a lot of the ways in which we're doing things. I certainly drove that in my last three years in the end user computing business. We've gone really fast from about 300 million to over a billion. You know, so speed and innovation, whether you can combine that with being a class act of a human being, I think that's really very special. Sanjay, Pat had some great Lighthouse customers that he talked about for VMware on AWS. When I talk to the community though, there's a lot of people that don't understand it. It's like, number one, why do I want to take kind of VMware and put it in the cloud? That's why we created things like Cloud Foundry. Number two is, isn't this just a straw that Amazon's going to kind of suck all the services and migrate them or use other things? So, you know, I know the solution is really not GA till next year, but what do you say to the people? What are we missing? Those that don't get it. I think, you know, here's a good picture to think of minds too. Think about this continent called VMware which had 50 million workloads and 500,000 customers. And around this continent, over time began to appear a bunch of islands that got bigger and bigger. Cloud providers. 4,000 of them are called vCloud and network partners. And then the biggest three, AWS, Azure and Google and IBM Cloud started to appear. We're building bridges from this continent into those clouds so people can come on and off. And yes, there's a toll that we charge for our software management security. Now, if a company decides to build purely on that continent without any ties in the enterprise, they're a new age company. We have solutions like NSX and Photon and Pivotal Cloud Foundry that will serve them. They, I would call a cloud native customer. We have solutions there. But there's a significant part of the world like Merck, like McDonald's that have got data centers and want to bridge into the public cloud, what we call hybrid cloud computing. Those cross-cloud services, we think are extremely monetizable. We're the only company that can do that well because of our base. And if we do that very effectively, there's a long life of VMware to get from $7 billion to significantly bigger than we are today. Sanjay, thanks so much for taking time to kick off day one, day two for us, but day one for the event. Great to see Pat Gelsinger up on stage with Andy and congratulations to all the work you and Raghu and the team have done with VMware. Parting comment real quick, your thoughts leaving VMware, the VMworld, I'm sorry, AWS re-invent. It's all feels like one connected show, right? It's all Vegas. I kind of slept that in there on purpose. Okay, but seriously, walking away from this show, what's your take back to the ranch in Palo Alto? I think at the end of the day, innovation and customers, you innovate really fast. You combine that with customer focus, anything is possible. And if you can also do that while being a fantastic human being that's approachable, humble, I think you can build great business. And then you look at this ecosystem, you have many of them are common partners. We didn't talk a lot about the ecosystem. The ecosystem is super important, whether it's SIs or many other partners. And we want to build a platform where many, many partners can be successful. John and Stuart's always a pleasure to be on your show. I'm glad I could squeeze it in for ten minutes, as your first guest. I have a good time with the show. We're very, very proud, big on your announcement, very pro VMware with AWS, great relationship. And again, again, VMworld, AWS re-invent, DockerCon, open source, all coming together into the enterprise. theCUBE is here covering it all, more live coverage day two, day one of re-invent here at theCUBE. Right back with more at this short break.