 Live from Orlando, Florida, it's theCUBE. Covering Sapphire Now, headline sponsored by SAP HANA Cloud, the leader in platform as a service. With support from Console Inc, the cloud internet company. Now, here's your host, John Furrier. Hey, welcome back everyone. We are here live inside theCUBE and we are at Sapphire Now. This is SiliconANGLES flagship program. We go out to the events and extract the signal from noise. Want to give a shout out to our sponsors, SAP HANA Cloud Platform. Console Inc, VirtuaStream and EMC and Capgemini. Thanks for your support. We really appreciate it and allows it to get these great events and provide all this great coverage or with over 35 video interviews already up on YouTube, more coming today. Our next guest is Michael Hoke, who's a senior vice president of global system integration at VirtuaStream. Now an EMC company sold for $1.2 billion. Originally started out in the SAP ecosystem. Grude created so much value over a billion dollars and an exit sold to EMC. Welcome to theCUBE. Thank you very much for having me. I'm glad to be here. I really love the VirtuaStream story because to me, we've been watching the progression of VirtuaStream from the beginning and it really, to me, shows the value of the possibilities of what's going on in this ecosystem. You sold for $1.2 billion and that's now a calm but it's out there, it's established. I'm going to argue cashflow and whatnot and all that stuff. But it really shows that you guys started out with an SAP and then pivoted or navigated out to a business model with the cloud and provide a lot of value. This is a lesson to the ecosystem because this is an example where SAP didn't have functionality. What you guys were doing really was an operating model that was underserved. Very underserved. Share the story and how it relates to today's ecosystem. Sure, so when VirtuaStream was founded, cloud was sort of anathema for the enterprise, right? That was the time when AWS was starting to shoot off. Microsoft was just dipping their toes in the water and what Rodney Rogers and Kevin Reed saw as the opportunity was if you could put SAP and large enterprise mission critical applications on the cloud, that's something that could have tremendous value in the future. At the time, everybody was skeptical. Security concerns, availability concerns, management concerns. It'll never work. It'll never work. They said that about Amazon Web Services too. A few years earlier, that would never work and now they're what, $10 billion or something. But so they focused on that market segment for two reasons. One, there was a huge value if it could work and two, they knew SAP. They came from a joint, which they sold eventually to Cap Jim and I. They knew SAP and system integration. White Glove Service was critical for enterprise applications to run in the cloud. So the company was built with a White Glove Service that we started, as well as our technology, the Xtreme platform that was really designed to host IO intensive stateful apps. From there, we grew, we did well, we plowed our way through the VC era. The reason why. Good word, plowed. It was a slog. Yeah, I've been there for over five years and there were some days, some days. But in the end where we got to was over 200 SAP production customers. EMC very interested because of the technology, as well as the White Glove Service. And that's where we, about two years ago, started opening up to SI partners. We were proving that this could work. We were winning customers against them and giving it in a small way the types of hand holding that they do on a day to day basis. So we started partnering early with some SIs to show that they can run it as well. Take a minute to explain the relationship that Vergestream, now EMC-EMC Vergestream has with SIs and how they engage with you and the value that you provide. Sure, sure. So we work with SIs in a couple of different ways. So SIs are known for high touch, high management, application services generally. When it came to where is it going to be hosted? Some SIs are asked that light and they'd say, well, here's your respects, go buy data centers, go buy your own servers, whatever, once you've got the hardware provisioned, we'll come in and do the application work. Other SIs built their own data centers. Cap Jim and I runs our own data centers and they had their application management work. So you had asset heavy, asset light. In the cloud world, we were able to come in easily to those asset light situations and now we actually, through our software, can help those asset heavy companies to build a full cloud model to support it. In an asset light model, we would provide up to the IaaS, maybe the OS management, and the SI would handle basis, database support, all of the work that they're very good at. We did what we were really good at. And this is a big trend. We put this up yesterday on theCUBE. This asset light, and basically, if you could take a minute to describe that, is the new normal for operations management on the cloud because you don't want to have heavy assets. You want to be more elastic, more agile, if you will. Agile and responsive, and it ties very well into the current trend of enterprises saying, how much of my data center do I need to keep? We're in a hybrid world. We're going to be in a hybrid world for the next several years. So there's going to be a large portion of on-premise and a large portion of off-premise. How do you build a hybrid environment that's scalable where you can pay for what you use in the cloud while still making use of whatever assets you have? So the SI's look a lot like IT. So if everything's asset light or no assets, everyone uses the Uber example. Well, they would back now do self-driving cars as reported today in Pittsburgh. You need a data center somewhere. I mean, someone's got to have a data center. So there's no diminishing return. There's no race to zero on this asset light. Someone needs to carry the assets. Someone needs to carry the assets and that's where Virtue Stream stepped in. Five, six years ago, someone's going to need to own this but we're going to need to own it at a higher degree of efficiency and at still the scalability and security. So this is the issue, right? If you're going to use data-driven, you need to have a data center. But here's where I want to get your thoughts on this ties to the global channel, AKA the big system integrators who are doing a lot of stuff. There have to be nimble to customer needs so they don't have, and tell me if I've got this right, they don't have the luxury to provision up a data center at the scale that they need in order to get table stakes to start doing business and that it's easier to go to say Virtue Stream and other clouds, possibly, to get the critical mass of resource to start doing business and being agile, developing software. Did I get that right? Well, if we're talking about the systems integrators in particular, they have some solution already. Most of the large ones already either have their own data centers or have co-location relationships, but they're very managed, hosting focused. What they're trying to get to is an agile, responsive way to deliver what they've already been delivering. And that's where the partnership with Captim and I, for example, are extreme software in their data centers. They're able to use our IaaS as burst capability or to reach regions that they can't today. That really gets them into a position of looking like a cloud provider, even though they're owning their own data centers. They can use us, our IaaS, for regions that they're not in or to extend, but they're able to get to that very responsive manner. What Virtue Stream was built from from the ground up, what we've been doing for the last six and a half years, they're adding to their coasting capabilities. You'll see that with other customers as well. You're accelerating their preexisting stuff, giving them the ability to go out and do some of the agile development. Don't lose your current customers, put them in a modern world, because this is another interesting trend. You've got ISVs looking like service providers. All the ISVs want to move to a cloud-enabled something, maybe not full SaaS, but something. And then you've got service providers that need to look more like ISVs, software solution-driven. Everything's flipping around, so the vectors are reversing on all aspects. On all aspects. But either way you look at it, they still want to have a consumption-based infrastructure behind it. So whether you're asset heavy, where you want to convert your data center to that, or you're asset light and you need to access one like Virtustream, it's really the way that is already tipping the industry. It's just going to continue over the next three years. What's the biggest challenge for developers out there and the ecosystem partners that you're working with? Because you mentioned your story about Virtustream, slogging through the VC and being agile. That's the ups and downs of entrepreneurship. We've started companies together. I've done companies in the same way, you have highs and lows. But that culture is moving to their world. It's still turbulent for these guys. It is an up and down for these guys. It's a slog at some level because they got to be agile and that's very startup-like. They start up, they have to be agile. And what I see, even the global SIs, you're talking about billion dollar companies, multi-billion dollar companies, they're getting pressured by their customers to say, I want an all-in-one solution and I want to pay for what I use. And their business models aren't necessarily ready for that. So they're having to really rethink how they're delivering, how they're innovating and what they're bringing to their customers. If they don't do it, that customer's going to go to somebody who does. Yeah, I mean, the enterprise has to become more entrepreneurial. That is the only way, in my opinion, that you're going to see an innovation surge and that's, let's say they be an entrepreneur, just be entrepreneurial, which is a mindset. And you can learn that. Get any tough skin? Tough skin and taking advantage of changing business conditions, ramping down when it's a little slow-seizing, iterating. This is why everybody comes to cloud. Agility being number one. They say we want to respond to changing business conditions. Your business also has to respond. It can't just be your IT. All right, the age of cloud and innovation. Michael, thanks so much. Give you the final word. What's on your plans for this year? What do you got going on? What's the big highlight for Stream? Sure, so we've been doing SAP for the last six years or so. We're branching out into other enterprise applications. You'll be seeing us expanding our catalog. We've always been a heterogeneous cloud but you'll see a more aggressive move into that. And you'll see scale. We're going to be opening up new locations globally thanks to our parent company, EMC. Big deep pockets. Big deep pockets. Private too, so no one gets to know what we're expanding on. Our customers are global. We need to get our offering out in the global market. Congratulations on the success and the acquisition and certainly being a private company. Dell Technologies, the combination of EMC and Dell will give you guys a lot of room to maneuver without under-public scrutiny. We'll come back in the fall and talk about that. We'll come back in the fall and talk about that. Thanks so much. This is theCUBE, live in Orlando for SAP Sapphire. I'm John Furrier. You're watching theCUBE.