 Live from Las Vegas, it's theCUBE. Covering Dell Technologies World 2019. Brought to you by Dell Technologies and it's ecosystem partners. Hello everyone, welcome to Dell Technologies World, this is theCUBE's coverage, our 10th year covering EMC World Dell World. We're here with Pat Kelsinger. Pat, it's not your time yet, but you're going to be coming on later. I'm sorry. Great keynote. Thanks for coming by. Thank you. Appreciate it. We'll see you back tomorrow. We'll see you later. Thank you Pat. Pat Kelsinger kicking off the Cube coverage, three days of wall-to-wall coverage. We've got two sets, shotgun of content. We've got two Cube cannons blowing out the content. I'm John Furrier, Stu Miniman, Dave Vellante. Keynote, really kind of the tectonic plates in the industry kind of coming together. You had on stage is Saty Natela, CEO of Microsoft, Michael Dell, CEO and founder of Dell Technology, and Pat Kelsinger, legends in the industry, captains of the industry, really a critical juncture for Dell Technology Worlds. And a slew of other announcements, but the Dell Cloud Unified Workspace, but showing Microsoft on stage, this is a game-changing move for Dell Technology Worlds. Sure, Dell Technologies, but also VMware. VMware in bed with AWS, we know that covered that relationship. Now going multi-cloud all the way with Azure and seeing the CEO on stage, pretty incredible day. I think you nailed it. It's a VMware story, John, and the numbers tell it. VMware's market value is 83 billion. Dell owns 80% of it, that's 66 billion. What's left? Dell's market value is 47 billion. That says that Dell Core is worth negative 19 billion. If it weren't for VMware, Saty Natela wouldn't be here. And you're seeing Michael Dell really drive the integration. He said that several times on stage today. How much collaboration? I love the collaboration across the divisions. You saw Jeff Clark with Pat Kelsinger talking about new desktop management, talking about VMware Cloud on Dell. It's a VMware story, you're right on. And Pat Kelsinger's too, really key message up there, simplicity, simplifying IT, the common operating. I felt like we were in a CUBE interview four years ago because that was the basis of hybrid cloud now, kind of coming to fruition. Clear visibility, at least on the tech stack side, on the operating side. This is an operator world and a developer world and simplicity and ease of operations is going to be the critical differentiator for the winners. So John, first of all, I think we're getting some clarity on this multi-cloud world. Look, one of the things that VMware did so well, not just that wave of virtualization, but vCenter was the center of IT management. And the question is, can they extend that into a multi-cloud world? When VMware made the partnership with AWS, it's like, oh my gosh, what does that mean to Dell? We got the answer today, what that means to Dell. VMware Cloud on Dell EMC hardware. For me personally, that relationship between VMware and Dell, I think it's closer from the top executive all the way on down to the field, go to market than it ever was. I was one of the first people working with VMware at EMC. I watched that relationship. EMC always kept them as kind of the, we own you, but you're going to be independent and work across the board. Across the board, you hear, you know, VxRail and NXX and PKS and all these wonderful products, Dell and VMware developing together, going to market together. It has ripples, but Amazon likes it, Microsoft like it, that's a big deal to see. VMware and Microsoft partnering together, there are some challenges with some other partners vis-a-vis Cisco and some of the others like IBM and HPE, that have historically partnered a lot with VMware, but a lot of exciting news and definitely tons of things. And VMware knocked down Google last month, yeah. So guys, this is the theme we're seeing. We see Zoom went public, that was a video conferencing, disrupting an existing industry. People thought it would never be disrupted. You heard Satya Nutella say on stage here that the new generation of new apps need new infrastructure. So a revamp, a reset, a revitalization of infrastructure to power apps via cloud. It's kind of the same game, computing resources, software apps, but with a whole new distributed architecture. A boom is coming. We see the stock market is up, it's huge. You see the tech earnings last week, across the board, solid results. This is now a game changer. This is not a bad business to be in. Not, you know, what was once going to be a declining business, sees more remote workers, people working from multiple locations, mobile unification with cloud computing, the complete renaissance across the board. Dave, I mean, this is a big revenue opportunity. Well, Michael Dell's keynote wasn't just about products. It was about innovation. He talked about solving world problems, a big picture stuff. And then he let Pat and Jeff get down a little bit more into the product weeds and you'll hear more of that. But Michael is laying out a huge vision. What ejects the position between, that's what it was, four or five years ago, you had sort of Joe Tucci, the chairman up on stage. Michael was there, you had John Chambers there. Now Michael owns the whole Kitten Kaboodle. He's calling the shots and people want to do business with them, VMware again, as you pointed out. Well, let me ask you a question. You've been following EMC for a long time. When we interviewed Michael Dell years ago when he was, when private, then he bought EMC. One of the things he said, a lot of people were poo-pooing the whole deal. Oh, and why they want to buy that? It's like a boat anchor. He said, scale matters. So are we seeing a new generation? Let's do it like you did the way in on this too. Of competitive strategy where scale matters. Because if you look at what Dell Technologies has done and is doing, they're essentially rolled up the global IT business and are competing at scale with synergies not even looked at before early on. We kind of, we talked about it, but we're starting to see some fruit off that scale. Amazon proved scale cloud, Microsoft moves to the cloud, scale up, now the earnings are up, thoughts. Well, what strikes me, John, is that, you know, they always talk about end to end, companies talk about synergy. Synergy is a code word for cutting. What you heard today, you had B of A up there, you know, talking, they had a video, and talking about the end to end capabilities that Dell Technology brings. Dell, by acquiring EMC and of course VMware, is a much way more strategic partner for corporations. Way more than many of these startups can be. So that is their linchpin. You can maybe criticize them on innovation and oh, maybe they don't have the hottest product, but end to end, throw in financial services and other services, people want to do business with this company because of trust. It's two, scale, cloud scale, Dell scale, IT scale. Yeah, so we heard Tom Sweet this morning talk about that Dell maybe had missed a couple of turns in the marketplace and they needed to go private to kind of rearrange things. When they bought EMC, we knew that there were a couple of tailwinds that they could ride. Hyperconverged infrastructure, absolutely one. We've been watching that trend since day one, that they are outpacing the industry, they are the leader, if you talk from a software standpoint, VMware's there, if you talk from a hardware standpoint, Dell's there, who's number two in the space, Nutanix, which also is a complicated relationship, but Dell sells that and VMware still is the primary hypervisor on that environment, so they are still beating the market in growth, but they're doing that by gaining market share and taking it. Michael always loves to talk about when he's taking market from the business. So the question is the overall macro, how long can they keep that double digit growth going? And Dave, I know you're looking to dig in with Tom Sweet to take on that. 90 billion dollar business that grew 14% last year, so this company, in order to grow, it has to gain share because the market is not growing that fast. You can't rely on repatriation, I'm sorry. The people aren't going to just disappear from the cloud and come back, so you've got to gain share. The other thing I think to their favor is, let's face it, they really didn't have their act together in storage. They were kind of missing the boat there and took their eye off the ball. PCs stayed strong, they got their act together in storage, which helped with the product niche, mix higher margins. So last year was a very, very strong year. 2020 is going to be a tougher compare, but it seems like they still have some knobs to turn. Guys, let's talk about competition in front of Nutanix. What do they do? VMware relationship with AWS, I'm sure Andy, Jesse looking at this and getting words like, chaotic, complex, the bane of our existence, kind of talking about cloud in general when you deal with multiple clouds, where Pat Gelsinger say that. Kind of public cloud losing flavor here? I mean, Stu, you got the public cloud dominating. Now all this talk about on-premise and you got Nutanix out there. What happens in Nutanix here? Yeah, so look, Nutanix is doing well and Dell is a very important OEM, but we just saw Nutanix made a big partnership with Hewlett Packard Enterprise, which of course, I'm sure Michael doesn't like that happening. Nutanix needs to keep growing. They are a software company. It's interesting, you talk about the other competitor I mentioned, Cisco. Cisco is transforming themselves into a software company. Dell, Dell Technologies, the core business wants to be the leading infrastructure company. They have VMware, Boomi, and Pivotal. Are there software brands? But the core business is really around that scale, that whole infrastructure piece, and it's a different chunk of the market. Chuck Robbins at Cisco, the CEO of Cisco has not yet made a big bold move, like a red-at move. Couldn't Nutanix be that move, Dave? Well, I don't know. I don't know, I think I just play as an IoT, but to your point about your question about the cloud, the cloud is not attenuating. Amazon's a $30 billion company growing at 41% a year, throwing off 25, 30% operating margins. I mean, that's where the innovation is. That's where the scale is. Everybody wants to do multi-cloud because they don't have a cloud. It's your only path if you don't have a cloud. So, I think the cloud's got a long way to go. Look, and they talked, you know, I tell you, my community got all excited when Michael got up on stage and said, we're all in on Kubernetes and what we're doing with multi-cloud. You're going to hear under the covers here, everything is going from VMware, VM as that unit, down to containerization, you know, talking about that application modernization. That's where they're going to lean on VMware, modernizing some of what they're doing, and, you know, of course, Pivotal and Boomi are the ones that are the tip of the spear in that area. Yeah, I don't think, Dave, to Sue's point there, the Amazon growth will continue because if you look at what Dell Technologies has rolled out today, certainly the Microsoft thing is a little shot across the bow, multi-cloud, nice checkbox, great to see the commitment of the CEO there. But everything benefits with SaaS and the cloud. SaaS is a cloud game, and if scale on the cloud is going to be there, I only see the public cloud getting stronger because the scale's there, the economics cannot be ignored, certainly the data equation will be interesting, but an on-premise infrastructure that's set up operating like a cloud, I think will ultimately benefit because Amazon's weak link, if there is one, is that they really don't have a SaaS business, right? So they have a series of customers that do SaaS, but that's going to be an opportunity for all those workloads to run on the cloud. My question is going to be, how cloud-like is what we hear today? And I'm a skeptic, I want to see it first, show me. Yeah, no, I mean, what do we hear? What are VMware services on Azure? It's the SDDC stack, so we understand what that is. It is more than just virtualization, but we used to say private cloud just can't be virtualization plus plus. So VMware's expanding and changing that model, but is it cloud enough? I mean, Dave, oh, you want to finance it with an OPEX? We can totally do that, the OPEX, it's great, but you know. At the end of the day, innovation and economics wins, and the cloud guys have the scale. I mean, look it, the amount of money, we heard from Google last month, they spent what, $12 billion in CAPEX through April? It would take Oracle six years to spend that much in CAPEX, it would take IBM three and a half, four years to spend that much in CAPEX. Their cost structure is going to be so much lower and ultimately, I believe, that's going to win. Talk about the winners and losers because we heard the Bank of America you mentioned, also you just said there, the future has to be redefined, not how you got here, how you moved forward. What's the competitive positioning posture for a winning supplier in the modern era of IT and cloud? I think it's really smart that Dell is forcing these integrations and getting out ahead of this multi-cloud thing. Like I said before, if you don't have a public cloud, you've got to get into that multi-cloud management business. VMware's there, they're obvious linchpin, they're early in the game, this is going to play over the next five to seven years, but VMware has knocked down AWS, Google, now Azure, they've got a relationship with Alibaba, it's just a matter of time before you see that one happening, so they are in a pole position, the other one is IBM Red Hat. I mean, those are the two favorites in my opinion. And by the way, Red Hat's here, and if you want to run the latest and greatest Red Hat solution on the Dell Ready nodes, of course you can do that. So we love to talk about competition, but at the end of the day, it's what's good for customers and can they pick and choose the option of their choice? How much do I get a full stack if that's the same and how much is their choice? And I didn't hear the word choice a lot because they were focusing on certain announcements today, but absolutely, Dell has done a good job in the HCI space and the cloud space of laying out the top choices that customers want. The choice word wasn't used because the choice is Dell, they'll ship you VX Rails, I'm not sure they'll be shipping other things in there, maybe they will, Stu, thanks for the analysis, Dave, great analysis. Man, this is going to be a great show, three days of wall-to-wall coverage, two Cube sets, two cannons of content coming your way here at Dell Technology World, the Cube cannons. Stay with us for three days. I'm John Rose, Stu Miniman, Dave Vellante, Lisa Martin, Rebecca Knight, all here in Las Vegas for Dell Technology, stay with us, we'll be right back.