 It's theCUBE, covering VMworld 2015. Brought to you by VMware and its ecosystem sponsors. Now, your hosts, John Furrier and Dave Vellante. Okay, welcome back, everyone. We're here live in San Francisco for day one wrap up of VMworld 2015. This is SiliconANGLE Media's theCUBE. It's our flagship program. We go out to the events and extract the signal from the noise. I'm John Furrier with SiliconANGLE. Dave Vellante with Wikibon.com. We are looking at a day one, Dave, of a setup really for day two and three, which is going to be the big day. Tomorrow is a heavy hitter day. Tomorrow is the day that Elliot Capitol's clock is expiring on the EMC Joe 2G, kind of peacekeeping kind of agreement. We're going to hear what that's going to look like. We're going to also have Pat Gelsinger on tomorrow, Carl Eschenbach, Steve Herrod, a bunch of VCs, Robin Matlock, the CMO of VMware. Huge lineup. We got David Flynn's going to kick it off tomorrow. David Flynn, former Fusion IO, current CEO of Primary Data. Like you said, Pat Carl Rodney, who would give a keynote today. Rodney Rogers is coming on. Jay Shree. Jay Shree Ula, a rockstar, a risk to smoke and hot. Brian Biles is coming on. Brian Biles is the founder of Data Domain, had a huge exit with the EMC. He's back, his company came out of stealth. So you have an ecosystem that's in flux. We have startups that are disrupting. We heard Mark Lewis from Formation Data. We're going to hear from Primary Data tomorrow. Again, and these are industry veterans. These aren't like guys that went to Y Combinator and decided to do a startup. These guys are like heavy hitter players. Seizoned. Seizoned executives and entrepreneurs in the enterprise space. The stakes are very high. Sanjay Poonan was on today. EVP from VMware announcing that tomorrow at 9 a.m., he's got a great keynote. And then tomorrow at four o'clock in the Merritt Marquis, VM Women, which is going to be a women in leadership, Cheryl Chamberlain, and Paul Koch are going to be down there. They're going to be really, really interesting to see all that stuff play out. Again, culture, diversity, DevOps, and user computing. It's all happening, Dave. And I think we are seeing the first VM world where the stakes are very, very high. And I would call today the calm before the storm where VMware really didn't say much. And they announced some stuff. They put some pressure releases out there. Yeah, we got some momentum. But I think the game really starts tomorrow. What does Pat Gelsinger say? What's going to be on the keynote? What does VMware do? How do they position themselves to make some good calls to grow the market? And are they committed to the ecosystem? Are they committed to DevOps? Are they committed to this disruption in the enterprise? And again, storage is a big topic. What's your take? Well, the problem is you're going to hear yes, yes, yes, yes, yes to all of that. Of course, they're committed. The question is, they're fighting a lot of battles on a lot of fronts, as I've said before. So I think they can win in many of those battles. I think what they're doing in the enterprise, the way they're embracing, again, quote, unquote, embracing open stack, containers, Docker, et cetera, that's all good. The blind spot, and we talked about this last year, continues to be the public cloud generally in Amazon specifically. Amazon grown at 80%, you know, last quarter, $7, $8 billion a year. They're bigger now than VMware AWS is. They got way more momentum. How do you compete with that? And they have a strategy, but it's not working, in my opinion. So they've got more work to do there. So their ace in the hole is that enterprises are nervous about going to the public cloud. They understand that renting is going to be more expensive than owning, even though Amazon will show you some IDC data that says it's not, but it is. So I think that, but that is something, that is a tiger that VMware really doesn't have by the tail yet. So that's something that I want to hear more about. I want to hear Pat's response. So, you know, John, what are you hearing? You're out here in the valley. What are people saying about VMware? Well, I think what I'm hearing and what I reported early on in the queue is kind of breaking news here in Silicon Angle is that there's a conflict within VMware. And I asked Sanjay Pune in the direct question, are you committed to DevOps? He said, absolutely we're committed to DevOps. I mean, I asked all the senior executives committed to DevOps. He said, absolutely we're committed to DevOps. Among other things, which is codeword for other things. So ultimately, I believe that VMware has to be committed to DevOps. They have a DevOps show Eric Mielsen put on. Certainly they're putting the toe on the water on DevOps. I believe there's a fraction within VMware. Okay, from my reporting on the streets and hearing the talk on the streets of San Francisco and the valley is that there's a company, a groundswell of support within the trenches, tech community within VMware and the community for DevOps support that the senior executives who are very sales driven, which is true, aren't fully embracing DevOps. Now that needs to be confirmed. We're going to have them on tomorrow. We'll ask the direct question. The other thing that I'm hearing is hybrid cloud is certainly- Oh, it's not that they're against DevOps. They just don't know how to monetize DevOps, right? Being committed to DevOps means you're all in, right? Not halfway. Is IBM committed to DevOps? I believe IBM's committed to DevOps while preserving their other proprietary stuff like Watson and their databases and they have some other things. I mean, but it's different. You can't say I'm a committed to DevOps all in and not pay attention to your legacy businesses. That's like turning off the revenue spicket. You got to have the stuff out. Then by inference, you're saying, I'm inferring that you're saying they're in conflict. If you're all in on DevOps, you're going to threaten your legacy business. Well, what do customers want, right? Customers are actually, and I highlighted with a Mark Lewis presentation in our interview with him, developers are downloading stuff. They're actually getting dirty, down and dirty, developing the next generation cloud native. Sure. So you better be cloud native if you want to have cloud native apps. So that means DevOps. Now call it cloud ops, whatever you want to call it. Hybrid cloud is the key to all this. Hybrid cloud makes it all happen. Hybrid cloud is the outcome of successfully implementing on-prem and private cloud working together with public cloud. That's clearly the pattern coming out of all the answers we ask all the guests on theCUBE. So VMware's got to get behind that. Not get behind the dogma of specific product lines that have some legacy. I understand legacy, you got to deal with that, but you can't let the dogma of legacy drive the reinvention of the next wave. But hybrid cloud is this vision of, I'm going to be able to have my on-premises infrastructure and my public cloud infrastructure and I'm going to be able to impose the same security, compliance, governance edicts across that infrastructure and sort of this virtual nirvana. There's very few of any examples of that existing. Now, in order to see that through, I think you're going to have to have homogeneity. And the problem with homogeneity is the world isn't homogeneous. That's why Amazon says screw the hybrid cloud, it's a false concept in a way they're right. But that's why VMware says no, Amazon's wrong, we can achieve that hybrid cloud, certainly with vCloud Air and I believe they can. The problem is vCloud Air doesn't have any presence in the marketplace. So you've got the classification of the application world. So you've got all these stovepipes of apps. You've got a mess in your application portfolio on-premise, you've got Amazon, you have Azure, you have a highly fragmented market. It's going to be very difficult to impose corporate edicts across that cloud fragmentation. So where does that leave you? That leaves you with a lot of pockets of innovation, good stuff going on that's driving revenue for organizations. And I think at the end of the day, that's what's going to win. IT's not going to win in cobbling together this vision of a hybrid cloud. I think it's a false hope in my opinion. Well, one of the things that came out of OpenStack, Silicon Valley last week when we bought the cube there was a couple of interviews. One was with Craig Mikluck from Google and I asked him directly about the hybrid cloud. And one of the things that he came out in his answer was, it's still elusive, but the tooling needs to be consistent in all environments. But one of the things he mentioned, Dave, was this notion of API-ification. And if companies go too far on API-ing everything, they end up putting themselves at a disservice because you can't just go out and disrupt that API. Not everything can be API, especially in legacy environments. So if you're a cloud-native company, of course you're going to be API-based. Everything's going to be asynchronous, no problem. But that's really where customers now are sitting on the fence going, okay, what do I do? And the one thing I'm seeing here at VMworld is, customers are looking around at other customers, hey, what are you doing? Hey, what are you doing? There's a lot of discovery going on in the customer mindset and directly and explicitly saying, hey, what are you doing? That means the market is real. That means it's still open and up for grabs. And I think that's an opportunity for whether you're a startup like Formation Data, Primary Data, whatever startup's out there and or the big guys, the pecking order of leaders will win. And I think Mark Lewis really nailed it when he said, commenting on our pre-VMworld analysis video was, there's really two innings, two games going on, a double header. Game one, one by Amazon, which is all cloud-native. And then two, game two. Jump all. Jump all, rules are changed, Amazon isn't winning. So to that point, I do think, you know, I've got to say in Hybrid Cloud is BS before, I do think Hybrid Cloud can exist, but it has to be built. It's not something that you're going to buy. It's not an off-the-shelf solution. It's going to require a lot of heavy lifting, potentially a lot of services, a lot of different technologies. I want to address the EMC, Elliott Management, you know, VMware issues. The rumor today that Pat Gelsinger, I guess on CNBC, denied it. I heard two things, John. I don't know what the story is. I heard no comment, but I heard he also, you know, said no, he's not interested in the stock, sort of rebounded a little bit. Here's my take. I think that a lot of these rumors are just signs that EMC is listening. They're open to trying different things. They're trying to placate the investors. But at the end of the day, I've been thinking about this a lot, John. I strongly believe that EMC believes in the Federation model. They think the Federation model is the way to go. I personally actually think there's some merit to that. And so I think that Tucci on his way out, his last act, his legacy, is going to be to preserve that Federation. And essentially, look, damn the investors. We'll keep doing stock buybacks, we'll keep doing dividends, but we are not going to deviate from our strategy. And that would be the ballsy thing, in my opinion, the right thing to do. I think if they capitulate to the markets, they're making a mistake. So I think the Federation is the right strategy. I think that Joe Tucci is under siege from Elliott Capital. I call Elliott Capital the Gordon Gecko corporate raider. And I think he's evil. I think it's evil to dismantle. Elliott is evil. Not Tucci. Elliott is evil. Elliott is evil. I love Joe Tucci. Big fan of Joe Tucci. Elliott Capital doesn't give a shit if thousands of people lose their jobs. EMC, granted, they might be a lagger in some areas. They employ thousands and thousands of people. And it's going to be decimated if they lose VMware in my mind. Also the interesting thing is, how does Gelsinger and Tucci weigh in and all this? I think Gelsinger, a CEO of the combined company, is very interesting. I think Tucci's exit out, and obviously he's going to leave, that's been announced, it's been public information. So having Gelsinger be CEO also has some promise. So I kind of like that. I worry about the corporate raider mentality of Elliott Capital to just decimate EMC and throw one of the bus and throw Tucci under the bus. So I think, in my opinion, the best thing would be for Tucci to build a new Federation model that's kind of a conglomerate of all of it put together and let VMware start flying out on its own. It's like launching a kid to college which I just did this weekend. VMware needs to get out on their own. They need to develop their own identity and really, really develop their own. So again, I'm waffling on this, but I just torn between the whole. I think you are waffling, John. So you did it on one hand, you said that, you think that they've need to develop their own identity. On the other hand, you're saying that Tucci's Federation is potentially the right way to go. So which is it? We're going to put you in the spot. I think VMware. Because I'm kind of waffling too. No, I think if Joe Tucci puts this Uber Federation model together around SLAs to customers and servicing customers, which I think I would do, you could see VMware being separate, but yet still playing ball in kind of a transitional way and give Gelsinger the freedom to do whatever he wants. At the same time, I don't like, because I don't like this Elliott Capital hedge fund mentality of gun to the hegs. I want an increased stock price. I think that's just bad moral fiber in the sense that, hey, I don't give a shit about thousands of families that are out there working. Now, maybe I'm soft there, but I think maybe it's a forcing function to have EMC be more effective, and that kind of forces that. But I don't think EMC's sitting around going, hey, let's kind of milk the market. And I think EMC tries to. No, I agree with that. And so I just don't like Elliott Capital. So I don't think it's about the jobs, preserving jobs. I think it's about preserving value and long-term value. I think you got to play this game to win. I think EMC are winners. They need to keep investing. Do what you have to do for stock buybacks and dividends and keep investors happy, but I think they need to stay the course. And I think VMware does have its own identity. The one thing is, EMC has to let VMware go do its thing in storage and go compete and win on your merits. Well, Dave, I think we're going to have an exciting show today. It was great. We got a great set of content coming in, great acquisition, two sets, real innovative cube this year with our anchor desk here, the ESPN of tech. And we also have a new innovation called the director set, expanding our footprint to get as much content and share that signal with you guys out there. And tomorrow we've got Gelsinger, the big horses from VMware. We're going to ask them the tough questions. We're going to have them explain what's happening to you guys. So stay tuned for cube coverage. Of course, we'll be broadcasting the keynotes as well. So there will be no coverage during the keynotes. So stay tuned here on theCUBE. Join us tomorrow for continued coverage of theCUBE at VMworld 2015, signing out day one. Have a good night.