 It's theCUBE, covering VMworld 2015. Brought to you by VMware and its ecosystem sponsors. And now your host, Dave Vellante. Welcome back to VMworld 2015. We're here at Moscone North. This is theCUBE. theCUBE goes out, we extract the signal from the noise. Brian Gracie and I are really thrilled. We have A.J. Patel here as the Senior Vice President of Product Development for VMware Cloud Services. Future. It's cloud. Great to see you. Thanks for coming on theCUBE. Appreciate it. So big event here. We saw Monday, the announcement of the hybrid cloud, the strategy, laying out a lot of vision, a lot of products that you can get today, a lot that have a little roadmap to them. But huge crowd. I think the number as Robin told us yesterday, 23,000. Absolutely. Great energy, so congratulations. How do you feel? Feel great. A little bit tired, but feel great. The excitement, the momentum. It's really great conversation with customers, partners. It's been a good VMware. How have you spent your time here? Are you doing customer meetings, presentations? No, it's a lot of press interviews, four presentations. A lot of service provider meetings. I'm also responsible with Bill for the VCloud Air Network business. It's refreshing to see that we've kind of struck the right balance between having our own service but also enabling our service provider community. So talk about the scope of your responsibilities. Absolutely. I work for Bill Fathers. I'm part of the VCloud Air, our cloud services BU. We have two roles. We are a cloud provider ourselves, which is VCloud Air with presence of presence in the North America, EMEA, Japan, and the latest addition being Australia. So in this case, we're standing up a VMware operator cloud and we're running that. We also provide all our IP that we build for our cloud. We make that available to our service provider partners. We have 4,000 service provider partners who leverage VMware technology to run a VMware power cloud. So for us, success is delivering on both fronts VMware VCloud Air as a business, but also VMware power cloud and owning the public cloud market with VMware technology. And that's really my challenge. So you're responsible for strategy, the offering, you run P and L? Absolutely. So with Bill, I'm responsible for running the service of VCloud Air. And then my partner, Jeff Waters, who works for Bill, is responsible for the VCloud Air Network where we take my software and monetize that through the VCloud Air Network to help them power their cloud as well. Okay, so you made native announcements this week. Maybe you could take us through those. Absolutely. And in fact, you know what? Why don't we back up? Can you kind of give us the journey of the offering? Absolutely. So we call there a two-year-old service. When we first started North America, predominantly with three data centers, we extended to five. We added our FedRAM certified data centers. So on one scale, we started to provide the geographic reach. We opened our UK data center in Germany, joined venture with SoftBank, and then a joined venture with Telstra for Australia and Japan. So we got the geographic reach. We were able to kind of serve directly 80 some odd percent of the core cloud markets. So the tier one cloud markets in the regions there, we're going native in those market as a service provider. We also then took our technology, which is VCD, which is VCloud Director, and we were just rolling out an announcement about our 80 product this quarter, which is our cloud stack, our on-demand platform, our cloud platform, make that available to our service provider partners. And with the rest of the partners, we have 99% coverage of the global cloud market today. So VMware today, I'm pretty proud to say, you can get a VMware cloud service anywhere in the world, 99% coverage. So what about the reactions to what was announced this week, and what's the feedback? You know, I think from the tech weenies in us, we love the remotion across on-prem and public cloud. That applause of having the VM move from on-prem live into VCloud Air. I have a couple of customers say, you know what, I've been asking that for three years, it's good to see you finally delivering on that. A hard technology problem, but that was probably the most sexy announcement if you will from a technology perspective. On the second side, it's all about containers. And that example, I asked Pat because I asked him to square the circle for me. I don't know, Brian, if you heard this question, whereas you would always hear, for instance, Joe Chuchy and Paul Gelsinger talk about the advantage that the hyperscalers had because of homogeneity, yet you've said your strategy is to manage heterogeneous cloud environments. Well, how do we do that? And Pat's point was, well, for certain things, we have to have homogeneity. And I'm presuming that demo is one where you've got to have homogeneity. To me, the world's going to be about what I call compatibility. How do I make sure that I have a compatible cloud? And it's going to be infrastructure compatibility and then more importantly, application compatibility. If I cannot make my application workload portable, how am I going to move the workload to where I need it to run? So the big technical challenges are making the workload portable. At the infrastructure level, because of the hypervisor and some of the work we've done on Anisex, et cetera, we're making the infrastructure programmable and abstracting away the workload from the infrastructure. We're decoupling the binding of the application and the infrastructure from the physical infrastructure. And then the next step is, how do I make it easily available on any cloud? Which is the work we're starting to put in there. When you announced the offering a couple years ago, you made a big deal that, look, we are going to share the IP with our ecosystem. You really laid down that commitment. We got a lot of questions about it. I probably got some heat, too. But how has that worked out? How has that evolved? You know, it gave us a passing grade. I think we could do better there, to be honest. Where we've done a great job is we've invested in the people. We've come up with something called a V-Cloud Air Technology Kit. We've taken our best practices in how to build it. We released VCD 80, which is a capability. But our customers want that remote and capability tomorrow. So the lag between us having something we demo to getting in the hands of service provider, we need to shrink that time. So the work we need to put in place is really delivering on the agility and the speed by which they can absorb this technology and stand up in their own cloud environment. The area we've done better is we've made possible a new program called an MSP program, a managed services provider program. Where a smaller cloud provider doesn't want to stand up their own cloud can resell a V-Cloud Air service. So it's, I would say, a good passing grade. More work to be done. Yeah, one of the big themes this week is one cloud. It's any application, anybody in one cloud. That one cloud for you is not only V-Cloud Air, it's the V-Cloud Air network. Help us understand how big is the V-Cloud Air network? Not just the number of partners, because everybody's got lots of partners, but put it in proportion. We know roughly how big V-Cloud Air is that VMware runs. What does that partner network look like? Is it the typical 80-20 model where 80% of that business, what does it look like? How big is that? So I don't have the exact numbers to share, but if I were to do a back of the napkin, I'm going to speculate, right? I would say the V-Cloud Air network plus V-Cloud Air together is probably bigger or as big as Azure or someone like then a public cloud market. It's a significant public cloud presence. If we're not number two or number three from overall public cloud market span. So let's assume it's a $50 billion market span. I would say, let's say Amazon's 30% of it. The next 20% of it is a V-Cloud Air network plus V-Cloud Air. It's of that size and scale. Representative, it's a major provider. So in the mix today, V-Cloud Air is growing fast and is a big portion, but the numbers will always be, I believe V-Cloud Air network would be a bigger portion than V-Cloud Air at any given time because the whole pillars need to grow in parallel as the market is exploding. You might correct that the differentiation really is kind of what you talked about Monday is the ability to take that huge install base that you have and enable it to do what the vision of the promise of the hybrid cloud has always been. I mean, nobody else really does that. I mean, Amazon refuses to do that. Microsoft kind of has... Trying to do that. So maybe can do that at some point and that's really your wheelhouse. Can you talk about the differentiation? Yeah, so when we first started, our first customers would kick our tires, right? And they would use it for dev test. And they say, you know, the stuff looks pretty good. They said, what if I take some of my VMs that are not protected and protect them in V-Cloud Air? And we started to see DR really take off for us. That was kind of a killer use case. Now, IT is being asked to really look at not building out any more data center spaces. They're saying, guys, we cannot afford to build infrastructure and a natural choice for IT as they're starting to come into the age of cloud is, who's the best choice? I'm already using VMware on-prem. They're starting to think about a data center extension use case or data center replacement use case. They're looking at V-Cloud as that strategic cloud. So the exciting news for this week has been the number of customers saying in the next two years, I want to be out of the data center business. You're my destination cloud. Let's solve those hybrid use cases to move data between VMs between the clouds is really what we're seeing the most exciting part. So it's that ease of moving workloads is really the exciting bit. So at SiliconANGLE Wikibon, we have some experience. We have a, you know, the crowd chat relationship. Crowd chat platform is an app. It, we used to run it and, you know, the Kolo, buy our own servers and it was a nightmare. So we decided to go to the cloud. We went to Amazon and our developers, you know, took some time to get it up there. It was painful. But once it was up and running, it worked well. So we have some experience with the various clouds and one of the things we found, cause people always cause we're SiliconANGLE and theCUBE and they're, hey, we should run in our cloud. And when we go to investigate, we find that certain things aren't there. You know, things like elastic bean stock are mature. You know, other little things are just in beta, et cetera. I wonder if you could give us an indication of how mature the cloud area is from that standpoint. You know, and how you can, you know, expect what gives you confidence that you can compete with that pace that Amazon has. You know, we often get dinged in terms of the breadth of capability that Amazon offers. It is pretty impressive. The rate at which they're innovating, very impressive. When you go back to the enterprise workloads and look at the customer use cases, there are probably 10 or 15 services that are critical. The two big gaps we had was, we didn't have a database service, RDS. We didn't have an RDS competitor out there. We just announced Sequel Air this week. We didn't have a good object service. If you're starting to build something natively in the cloud, you need an object service. The analytics start to bridge these key gaps. We're doing that today. And Gartner has a metric where they measure the IaaS capability of each of the vendors. I'm happy to say that if we were to benchmark today, we're ahead of Google, right behind Azure to be capability wise, a complete IaaS platform. And what some people would call the PAS piece of that, that database as a service, is part of the infrastructure as a service. Is that right? So we're starting to add these application services. This is my background. I come from Oracle. I ran Oracle's middleware business. We're starting to build both organically our services. But more importantly, VMware is a partner-friendly company. Our customers want their best to breed on-prem ISVs to work in the cloud. So the service is like Jenkins for continuous integration as a service. They want to use Perforce, if that's the source code management system, to be available as a repository on vCloud Air. So our strategy is to enable our ISV ecosystem to make them available. So you won't see everything coming from the VMware factory, but the ecosystem will deliver best-of-class solutions and services on vCloud Air. And those are the announcements we made. Well, Oracle's an interesting workload. I mean, do you have demand from customers? I mean, you certainly have a lot of guys virtualizing Oracle. We were one of the first to say, virtualize Oracle with VMware, dam the torpedoes and it's worked up. We have a lot of interest there. Unfortunately, Oracle has the licensing practices that forces them in more in a dedicated environment. So we can support Oracle, but unfortunately because of the right system restriction, we have to set them in a dedicated cloud. Well, you need specialized hardware to run Oracle. Now they may relax that over time. I mean, it's been their practice in the past to do that. Right? I mean, so you would expect that as that occurs. So our customers today use two things, either leave their data on-prem and take the web tier in the front end and then connect back to a database like Oracle. Sometimes they're just moving out of the Oracle. They're using a MySQL cluster to run their web scale websites. Well, that's the choice though that Larry has to make and the point at which the customer says, okay, if you want to lock me into the whole Oracle approach at the risk of losing my database business, then if that happens, then Oracle will loosen up on those requirements. That's how the Oracle behaves. The customers will drive them. We're ready to catch them when they're ready. What do you think? So if I looked back at Amazon Web Services two years in, only a couple of services, a handful of them, you guys are two years in, a handful of services. But if I look at who their customer is today, it's directly focused on developers. I mean, they're going after developers. The number of services they come out, I mean, it's 10, 15, 20, 30 a year. Who is your customer? What's your developer story? Because right now, I mean, if I'm talking about moving VMs, there's not a developer on the planet who cares about moving a VM. How do you talk to a developer and get them to come to your cloud? So let's address both sides. So we definitely are IT focused and we have an inside out strategy. When it's IT driven, it's about moving workloads from on-prem to cloud. When you have a developer conversation, it's about building net new applications. The application environment in the enterprise is not just about green field, but offering application extension. I want to add a mobile front end to my enterprise application, in front of my SAP, my ERP system, et cetera. We've announced mobile backend service, for example, as a service on top of Cloud Air. So we're starting to provide those selective use cases where our customers, our enterprise IT developers, if you will, that's our target. It's the enterprise IT developer who's looking to put a mobile front end, who's looking to build a digital experience that's integrated back into the use case. And you saw the hybrid extension use case that we talked about is really what's driving this. So developer story driven by a customer demand around mobile as a spearhead and building the red set of service. So we've been talking about this a little bit this week. And we had a good discussion with Pat about it. He's like, look, the operations guys, or the developers really want to become operations guys. It's really a lot of, your guys are really ops dev, supporting the developer community. And that's what you're trying to do, is enable them. It's both providing them the frameworks and the tools. So in the new development, it's not about building an application from ground up. It's composing applications, taking services and putting them together. And we're offering those services, but also giving them the tool chain to build new applications in an agile way. Well, I guess it has to be both, right? Cause you're trying to expand your tab. Absolutely. New areas. How do you take advantage of all the assets in the Federation? I mean, we had Rodney Rogers on from Virtustream. He was talking about, you know, going after SAP and maybe you don't need just one cloud. You can use multiple, you announce an object service, but it's not based on EMC. We have an object service, which is EMC as well. Right. We have both and I can tell you why we have two. The cloud, you know, the cloud foundry service, you know, I can, I can install it, but I can't get it in. Why isn't the Federation stuff tighter? Why isn't it going faster? I mean, it is in the Federation. You will see this accelerate. And I think we, if you look at the last year in terms of where our progress has been made, EMC object service available today, our data protection built on Avamar. So very strong leverage around that. In the pivotal case, most of our customers use PAS for private cloud. That's been the design center. We have a PWS enterprise, which is a multi-tenant cloud. That tends to be more a trial cloud. So we're really about the enterprise customer. And the enterprise customer is saying, hey, give me a dedicated PAS on prem or vCloud air. We support that. We're not asking for a multi-tenant, kind of an engineer or a heroku. That's not our base. That tends to be the smaller developer. We're again, focused on the enterprise market. So what's a typical customer scenario? You guys got a hardcore VM where customer, and you start talking to them about the opportunities for hybrid cloud. I'll give you three or four different ones just to give you the breadth of them, right? The simple use case, if it's an IT operations driven one, it's driven around data center migration. It's around data center extension. We have the likes of large university that's looking to complete shut down our data center and move into that. So that's kind of a data center use case. We have Columbia sports, or we're looking at Harley Davidson. Harley Davidson has the entire dealer network, the point of sale system, running on vCloud Air. We have likes of Betfair. They built an application that's more cloud native. That dynamically, when you have a betting, and you're right at the last minute, you need to spike up capacity, their application seamlessly spawns into vCloud Air, takes capacity and delivers that. That's a cloud native application that's built around that. So we see the breadth off from everything from data center use cases, extension capacity on demand use cases, all the way to dev test use cases, DR to really cloud native applications. And that span the spectrum with mobile being the newest addition. We have farmers who started to build a mobile app. If you saw the My VMware app that you're using today for VMworld, that's running on vCloud Air using our Mbass service. So we're starting to get covered in the entire spectrum of enterprise use cases today. Yeah, I mean, just as a piece of, I would say the ability for you guys to tell that story, right now it comes across as being VMware center, you know, very VM center, very infrastructure centric. You're allowing the rest of the cloud industry to sort of define for you what that is. So if that's really your story, if your customers are saying, look, I have a ton of applications, you may want to extend them to mobile, but I want to move them for data center. I mean, that's a huge space. You know, our forecast even out till 2016 only say that public cloud becomes a third. There's a huge amount of enterprise applications that need to go somewhere, you know, move forward somehow and they need to know how to help with that. So I'll leave you with that. If you have SAP as a workload and you can move the workload on prem or cloud and then extend the workload with mobile, integrate SAP to Salesforce, this is direction where we're going. You saw the keynote. It had mobile front and center. It showed a demo of a mobile app that's been built. This is clearly VMware moving from infrastructure to application services, extending their reach beyond just infrastructure capacity to building that new digital application. That's Sanjay's experience, that's Sanjay's background. So AJ, what, last question, what keeps you up at night? Not personal stuff, but business-wise. You know, what keeps me up at night is really how do we scale this business even faster? How do I meet the demand? My challenge is I move from getting customers to scaling the service fast enough to support the customer. The conversation I had with some of my customers today, they wouldn't want to move thousands of VMs in the next six months. How do we ramp up so quickly? How do we support them? How do we advise them? How do we get this scale going? So the challenge is going to be, how do we scale quickly? I mean, that is- With the floodgates starting to open up more and more. It's critical. You got demand on the one end and you got competition on the other. You've got the scale and you, of course, you don't have that lock in at the top end of the apps layer. So you know that game well. It's not your game here. So you've got to be skilled. So service delivery is all about it. Awesome. Great conversation. Really appreciate you coming on the queue. Thank you so much. Pleasure meeting you. Thank you so much. All right, keep it right there, buddy. We'll be back to wrap VMworld 2015 right after this.