 Well, let's bring in VMware, we're going to come in, good? Parag Patel, who has been on theCUBE before, welcome. Good to see you again. Welcome back. So, VMware is growing and changing. Everyone who has been on theCUBE has either been promoted or has this chief title. What's your current title today? My current title, there's no chief in it itself. Vice President of Alliance. So you're involved with the ecosystem. You were on theCUBE when we did our first VMworld 2010, we talked about the ecosystem. You've been on a Hitachi event, you're out there, you're at VMworld again, we were in Las Vegas. Give us an update, the ecosystem is really important for VMware. What's going on in the ecosystem and what's changing? And I'll see Oracle is the show here and let's get right into Oracle. Okay, so the ecosystem is more vibrant than ever. So we have over 25,000 channel partners, we have over 2,000 technology partners, and that grows by 50, 60 a month. The interesting thing is that the virtualization ecosystem is doing a lot more. So we've opened up the platform, there's a lot more APIs for security, systems management, storage, networking. So the integration to create the software mainframe is getting tighter and more efficient. So there are things happening under the covers that many customers don't even realize that makes the overall data center a lot more efficient. The other thing that's happening, just the second dimension, is that we now have many more product lines. We almost have four distinct product lines and we're developing ecosystems for all of those products. So give us the overview on the economic opportunity for the ecosystem. White spaces that you're seeing develop, you mentioned the four product lines. I'll see you guys have laid out your map, I'll see infrastructure, middleware and user experience. Talk about the different layers and opportunities and will you see a lot of traction happening today? So at a macro level, we estimate that for every dollar that's spent on VMware, about 15 or 16 is spent on the rest of the ecosystem. And that's hardware, software, services, the whole thing. In fact, that's one reason why all the systems integrators are really ramping up their VMware expertise. That they're seeing tremendous opportunities to go and build out private public hybrid clouds. Will that ratio grow over time? Will it shrink? Why, how, why would observers expect it to grow? I'm presuming it will grow, but why? Yeah, so it has been growing for the last five years. So, widening. Widening, yeah, so if we were to go back four years ago, I think the ratio was one to 10, one to 11. And now we're over one to 15, one to 16. You know, we are probably in the early innings of the cloud build out. Middle innings of just core virtualization of the data center. So there's still a lot more to do. And customers have gotten to a point where they're 45, 50% virtualized and they rapidly want to get to 70, 80% virtualized, but they need a lot of help to do that. And they're buying the latest hardware. They're buying security now, that security software's available that's optimized for virtual environments. Same thing with networking systems management. So I think we're still in the early to middle innings. We're here at Parag Patel, Vice President of Alliances. I'm John Furrier, the founder of SiliconANGLE, Dave Vellante with wikibond.org, research analyst, open source research. We also have a new site that we launch called servicesangle.com. And there, in services angle, we profile the changes in the services business. So the question I want to ask you is, you mentioned consulting and ecosystem revenue. That really is a channel kind of environment where software developers, software system integrators, consultants are doing a lot of work. Where are you seeing the challenges and the biggest opportunities being solved by these new services players? Because you have the essentials and the deloids, doing their normal thing, doing the high end consulting. You have boutiques emerging. We saw some ones getting like cloud scaling, getting some funding recently with Randy Bias' company. What is the landscape like? I mean, in this new channel of cloud and now big data where virtualization is kind of in the center of all this. It's changing pretty quickly. You see the, historically what happened with the global systems integrators is that when a market forms and starts getting pretty large, that's when it makes sense for them to jump in. Because they have the law of big numbers they have to manage. But at the same time, we're getting into a cloud build out, a big data build out, where there's new skills, new technologies that people are feeling their way through. And that's creating a lot of opportunity for startups, new mid-sized boutique companies to come in and provide the expertise that you're not able to get elsewhere. So, managing in a cloud environment, security in a cloud environment, operational issues. And then big data analytics. I mean, if you saw Jo Chuchi's keynote on Monday morning, that's this tremendous example of using big data for insurance policy premiums. I mean, they're doing things you couldn't imagine a few years ago. People need help and special services to figure out how to do that for their own business. We're in the evolution cycle, are we on that? Obviously planning, the normal value chain of services, proof of concepts, getting the systems. Where are the clients that the ecosystem partners talking to? Could you put a PEG, a stage, embryonic, developing, production? For big data or cloud? Just cloud and big data, both. I mean, cloud in particular, because obviously private cloud, hybrid cloud is the big focus you guys did that at VMworld in Las Vegas. That's really the core of it. Big data kind of falls under. Let's talk about cloud in particular. Well, what we noticed is, we rolled out our cloud vision in 2008 at VMworld. By VMworld 2009, most customers were talking about cloud. And in 2010 and 11, most customers are implementing private cloud. So again, I think in the early to middle innings of the cloud build out, hence a lot of opportunities for new technologies, new service providers. For big data, I think we're in the very early stages. We're just now realizing there's all these great information feeds available, like Twitter feeds, like all the social analytics, the click streams. We're just now getting technologies that are ready for market to take advantage of that. And I think people haven't even realized the services and the design expertise they're going to need for that. I think that's to come in the next few years. So Pragy, of course, VMware didn't get a keynote speech, Oracle Open World, but you got the next best thing with Joe Tucci and Pat Gelsinger, as you mentioned. Talk a little bit about the whole VMware in Oracle discussion. We all know that Oracle has its own virtualization approach and VMware's not the favorite approach of Oracle. Nonetheless, customers using VMware and are moving in that direction, what's happening out there? What should customers expect and how should they approach it? So Oracle strategy is to sell the full stack top to bottom. And what we're talking about is abstracting out the hardware from the applications layer. So those are two very distinct strategies. It presents customers with a fairly stark choice, which is why I think Oracle wants to keep VMware at arm's length, won't really do much with us. But customers are voting overwhelmingly in terms of the flexibility and the choice and the abstraction that the cloud architecture gives them. So we see a lot of customers wanting to virtualize with VMware, want to virtualize their Oracle estate. We have very healthy and growing numbers of customers who are virtualizing Oracle products on VMware. But Oracle's doing its best to thwart that. So you have a strange situation in that you're owned by a hardware company. And normally a software company would want to commoditize hardware to lower the cost of its platform, yet you're owned by a hardware company. That's not good for the hardware company that owns 80% of you. So how do you reconcile that? And then I have a follow up. Well, we don't explicitly try to reconcile that. VMware is an independent subsidiary. EMC has always allowed us to pursue whatever strategy, partnerships, product lines that we want. We just launched a virtual storage appliance as part of the vSphere suite. And that's available to customers. So we don't really try to reconcile that. We do the best we can to grow our business. And then the EMC product lines do the best they can to grow their businesses. And we cooperate wherever we can. So do you feel as though it's to VMware is the best advantage to have the lowest cost hardware that attaches to that? In other words, is it in your best interest to commoditize the software? And do you have the latitude to do that? I think it's- Oh sorry, you commoditized the hardware. Commoditized the hardware. But we certainly have whatever latitude we need. Hardware commoditization is something that's been going on for a long time before VMware came on the scene. And I think it's something that's going to continue. And if you even look back at trend lines over 30 years. Secondly, our strategy is to provide customers twice. If they want to use EMC hardware or NetApp or IBM or Hitachi or a startup, we have over several thousand different hardware devices on our compatibility list. And I think what EMC is doing just to answer that question is providing customers with hardware up and down the value chain. So sometimes VMware is criticized for focusing too much on the big guys and not enough on the little guys. And I want to give you an opportunity to respond to that. Is that a fair criticism? And talk about that a little bit. It's a good question. We go with customer demand. That's usually the number one determinant of where we make our bets. And the big guys are big because they have a lot of market share and a lot of customers. So even within the customer base, they're spoken for very heavily. And so we have no choice but to work with the big guys. And it's a pleasure to work with them. I mean, they have the market share, they have the resources. When we come out with enablements, whether it's an API or a hardware testing program, you really need to work with a handful of partners to get that right. Make sure it's working so that when we go to customers, it can work well in heat because our stuff is used for mission critical, 100% uptime environment. So we have to make sure everything works well before it goes GA. And then what we try to do is as quickly as we possibly can, take that same enablement and make it available to the entire ecosystem. And so if you look at our history, it's easy for companies to say, we're not getting enough attention from where we want this or that that we're not getting. But every single enablement program we've had in a very short amount of time, we've been able to expand it to just about everybody who's interested. So if you look at our testing and compatibility list, just about every storage vendor is on there, big, small, medium. Our API program is now available to more and more vendors. As VP of Global Alliance, as you have all people understand the importance of the ecosystem, what do you draw any learnings from the way Microsoft built out its ecosystem and back in the day? Are those comparisons fair and what's different? So I think Microsoft in the 80s and 90s did a tremendous job of building out an ecosystem. In fact, they were one of the first ones to realize that if you got developers to build a lot of applications for your operating system, it's going to pull your operating system. So certainly there are lessons there for the entire industry. And I think we've seen a lot of companies take pages from the Microsoft Playbook and implement that in the last 10, 15 years. And I think to some extent you saw mainframe companies do that earlier as well. So it's something that has become prevalent in the industry. So for us, we realized early on from the Microsoft example, from other examples, and certainly from customer feedback that we need to get more and more hardware and software working with our platforms. So you guys look at your business, or at least I look at your business, kind of infrastructure, platform, and applications, and you may look at it in a similar model. End user computing, okay. Can you talk about how you spend your time in the Alliance world amongst those various areas? It's a dynamic tension because you've got three, four product lines of support, completely different sets of ecosystems, very different companies. But at the same time, you know, you've got to respond to what customers are prioritizing. So we go by what customers are telling us, but I would say, you know, we, our ecosystem for the core virtualization is fairly mature. So the programs are well-defined. They've gone through several generations. So they're running really well. We're spending more and more time with ISVs to get and to support virtualization, to support our cloud applications platform, which is a V fabric product line, and to integrate to our end user computing products, which is the view and horizon product lines. So we're spending more and more time on emerging products, but at the same time, we can't take the eye off the core products because that's a very large, complex ecosystem with a lot of programs and dependencies that we have to keep running. And you may have just answered this next question, but we were talking earlier about, you know, VMware's market value. I know you can't comment on that. John and I have said we see VMware eventually becoming a $100 billion market value company larger than EMC in our opinion. That's where the, and that's why Tom Georgins we think is right. EMC's not going to sub-optimize its investment in VMware to sell more storage. It just won't do that because VMware is potentially a much, much larger asset. My question is, you're in a great place. VMware's a very hot company. The ecosystem is tremendous. The customers are so passionately loyal to you. So you must wake up and pinch yourself every now and then. But what worries you? What is keeping you up at night when you look over your shoulder? What are you concerned about? So we do pinch ourselves. I mean, VMworld a month ago was one of those places where you pinch yourself because it was 20,000 people and the passion and the seriousness was just mind-boggling. I've been to every VMworld we've ever had and that one, I was still pinching myself. So you're right about that. And it's a lucky and a good place to be. What keeps us up at night? I think competition certainly does. You see Microsoft, Oracle, Citrix, a lot of companies providing alternatives. I think customers now have choice with public clouds, right? So that's, and we're trying to enable more and more public clouds, but there are public clouds that don't use VMware. And so that's a choice for customers. I think we worry about keeping up the growth rate and scaling the organization, maintaining our culture to drive that growth rate. That's an ongoing effort. You can't take culture for granted. You can't take scaling up for granted and scaling up, it's one thing to go from 50 people to 500, 500 to 5,000 and then now we're over 10,000. And at each stage, you're constantly reinvigorating, reimagining the organization. So that's an important thing. And then it's just new technology. In Silicon Valley, I mean, you could be a giant in one decade and then new technologies come in a surplus. We're always looking out and coming up with new things, and innovating, and making sure we're in tune with customers. Could you share with us Paul Moritz's, he's not very public, he does his keynotes. He hasn't been on the cube yet. So Paul Moritz, you have to come on the cube. When you're ready, you can come on. I'll take care of you. Give some insight into Paul Moritz. He's a charismatic leader internally. He has a technical chops. He's come from Microsoft, and we always talk about Paul Moritz at Microsoft, Pat Gelsinger at EMC, kind of the wind tail thing going on with cloud. But share with the folks out there about Paul Moritz. What's he like? How's he a leader? Does he really have that full command technically? And how does he motivate the troops internally? Well, Paul is a visionary, certainly. But he's also a well-rounded leader. I mean, he understands the business inside and out. Technically, he's very, very deep. I mean, and not just at one layer. I mean, he understands the entire stack, which is why you could argue he's really reinvigorated VMware, and we're now have product lines up and down the entire stack. But he's also very personable. You can sit down with him. He's very humble. He's very, very thoughtful. So he is what I would call a deep, deep thinker. He really thinks through issues from a lot of different angles. And I think a good piece of evidence to his strength of leadership is that really very few people have left VMware since he's come on board. We've grown, it's a lot of great opportunity, but a lot of people say internally that they're still here because of Paul. The question is, are you going to buy the next iPhone 4S? We've been covering the news today. Absolutely. The no iPhone 5. I switched over about a year ago and it's just an amazing device. So you're going to buy the 4S, even those no, did you hear no iPhone 5 today? No iPhone 5, I've been busy with meetings here, so I haven't paid attention to that, but I will go and check out what the latest and greatest is. You like to get the latest and greatest toy? I do, you got to keep up on stuff. I'm in, because I never bought the iPhone 4. I have to admit now, and it's all cracked, and I've just been waiting for iPhone 5. Yeah, I've got the three, so I'm ready to move to the next one. So you and I, but we're kind of in that zone when the iPhone 5 comes out six months from now, we're going to be kicking ourselves. So maybe we'll wait it out, let's see. So we got some news here from Mark Risen Hopkins. The iCloud is free with iOS, Sprint and ClearWire get the iPhone, and then you get a flat rate 4G data as low as $40 a month with the iPhone. Other things is, Sprint's all in. The iPhone 4 has a retooled, complete retooled iPhone, dual core processor, dual core graphics, two times faster processor, seven times faster graphics, 1080p video with noise stabilization, image stabilization and noise reduction, and you get this two antennas. So as I was speculating on the cube and earlier today, that the complete retool on the antennas, GSM and CDMA is actually in this iPhone and iOS 5. So the iCloud replaces mobile me and that's available on October 12th. So I'll see the Apple news going on today. So we're covering that. Well, thanks so much for coming on the cube. We appreciate the update on VMware. It's been great covering you guys. We had an amazing time for the folks out there watching here, Silicon Angle, Wikibon were at VMworld 2011 in Las Vegas and it truly was an amazing event. We had extensive coverage every day. You were on the cube. You guys were great to us. A wonderful location. Really appreciate that. Appreciate the help. We'll be here next year in Moscone. All right. VMworld, you're coming up in two weeks in Copenhagen. Yeah, that's right. We had Rick Jackson on. He told us you guys bought out San Francisco for the next 10 years. So we're very happy to be back in San Francisco. No offense to Vegas, but seven, eight times in Vegas a year is plenty. That's right. All right, great. Well, thanks very much. Appreciate it, bro.