 Live from the Austin Convention Center in Austin, Texas, it's theCUBE at Dell World 2014. Here are your hosts, Dave Vellante and Stu Miniman. Welcome back to Austin, everybody. This is theCUBE, we're here live at Dell World 2014. Todd Surty is here, he's the Vice President of Strategic Alliances and Emerging Partners at VMware. Todd, welcome to theCUBE. Thank you very much, it's great to be here. Emerging Partners, Dell. It's kind of this new animal in the industry. We've gone private, and here we are. So what do you think of Dell World? I think it's phenomenal. Coming off the backs of VMworld, we had one in San Francisco, as you guys know. We had Barcelona, we've got our V-Forms going on right now all across APJ, and just stepping into this is my first Dell World, and it is a very similar vibe. It's just electric, so it's great to be here. Very exciting. So what's happening in the VMware ecosystem? We were at VMworld in San Francisco. We didn't make the trip to Barcelona, but San Francisco was really interesting. Pat and Carl clearly have a strategy in place, executing on that strategy. You got partners coming in, doing the converge thing. How would you summarize what's going on in the ecosystem today? Yeah, it's in a very exciting time for VMware. If you look at the ecosystem and what's happening right now, we've got a convergence, if you will, of us and still our growth path of all of our virtualization products. At the same time, we see this significant upward swing in our next generation or our products around that, like end user computing, our Evo Rail, our VSAN, our VCloud Air, which was formerly VCHS, but we see this massive trend that's happening and what outside analysts are telling us and consultants are now is the time to explode these other products and other solutions into the marketplace. We've got it measured by billions of dollars that we see over the next three years that we could gain in terms of that growth and that growth is going to come out of the impact that we see with our channels and our partners. So we've made some significant changes internal to VMware to address that. Let's talk about Dell for a minute. They're an interesting partner in a lot of ways because while guys like HP and IBM move a lot of VMware licenses, so does Dell, of course. I don't know who's number one. They all claim they're number one, but that's fine. You let them fight over that, you know, Monica. It's great, but Dell doesn't own an operating system. They're not trying to own the software world like some of the companies. And so it seems to me they're a clean partner in that sense. I wonder if you could comment on that. Yeah, you know, it's a great segue to the fact that our relationship with Dell has been, as you know, about 10 years and that 10 years has been at the birth. Really, if you look at this last big chapter VMware's had, and it started out with an engineering, you know, focus and really collaboration between the companies. If we look at your comments on it, Dell to us or to me in my new portfolio of partners here is one that's extremely, you know, just in terms of the changes they've had, very agile, very quick. You know, I've seen them make decisions where we're now trending towards additional areas where we're growing, not only from a product and solution, but we're trying to define that by solutions straight up the stack and into our customers. So, you know, very different view that I see with Dell as opposed to the other partners. Not that they're not all great and we're going to, we have trends and acceleration points, but this one's really special to me and the team. Yeah, so Todd, you know, I think it's a great point you make there. Transitioning from, you know, Dell always was, you know, a good OEM kind of view for your licenses. As you move into the Evo family and vCloud Air from a cloud standpoint, how does Dell engage with VMware and how you guys have quite a few partners? How do they really differentiate themselves? You know, maybe start with Evo Rail. I mean, the configuration is very specific. So, how does VMware look at that of, you know, there's Dell and, you know, Supermicro, EMC, Hitachi, a couple of, you know, Asian companies? Do you guys look to allow them to differentiate and add value on top of that? Absolutely. And you know, so to your, to first your point, you know, Evo Rail specifically and what we're doing there, we launched, Dell was actually one of the first partners that made that commitment with us. So that's huge. Anytime, even though we both have great big brands, this is a new product, a new offering, it's this mini startup sitting within VMware. So first and foremost, they made that commitment. They made that commitment as well. They had a time to market advantage. So us just playing through how we're going to come in with Evo Rail. When you start to really get down to where we are, when we come in with our sets of software and those assets there and you look at the power behind Dell and their servers and the compute, now we have an opportunity to go into marketplaces that we're already seeing like the government and Fed and things like that. So we're gonna focus in and double down. Right now the world is kind of our oyster when you think about how we're going to segment and make it special in terms of what Dell and VMware are gonna do. We've got this mini collision, if you will, that's happening in the field with our channel partners, with our direct sales reps on how we can actually sell, go to market, and good things are happening. They're happening though in terms of just collisions. Now we got to be thoughtful about it and start to build out how do we want to go to market? What are those key examples, those key kind of go-to-market attributes that are going to make it special? But to one last point to your question really around what we're going to do here, we're actually now in the process of going, fundamentally what is Dell going to be different than some of the other partners that have made the same similar investment and we're finalizing those real-time right now. Todd, cloud is another interesting example that again relates to the sort of clean relationship with Dell. You were involved in VCloud Air, I guess at the time it was VCloud, you know. VCS, yeah, yeah, yeah. VHS, right, good name change. We'll have to question you on that later. Yeah, thank you. But for example, some of your other large partners have gone all in on cloud, they're owning their own data centers. They're competing with VCloud Air. Dell doesn't, Dell has a different strategy. Dell wants to enable clouds. Now, of course, the heavy, it's OpenStack, which you guys are now putting your toe in that OpenStack water, but I wonder if we could talk about the cloud dynamic. Generally, what's happening in the cloud market, hybrid cloud, and then specifically where Dell fits? Yeah, so I appreciate the question. So, you know, what we see in the cloud, first off from a VMware perspective, is that we've kind of termed it as hybrid. So most, if not all enterprises right now, love the ability to think about or be in a public cloud sense, but can't do that quite yet for a whole variety of reasons. Technology, security, compliance, all those things that you list up. So we've come out and said it's about a hybrid world, not about a public, and it is about taking what you have private. So what we've done specifically with that is we've launched what's called our VCloud Air, or formerly called VCHS. And within that it gives customers choice, it gives our partners choice in terms of how they actually can take and leverage the attributes of what is in the public cloud. Those attributes for them are around all the things that they've trained their teams up on. So the products, the level of what they have from a solution offering, the analysts that they have that they're hired, that work through all that set of products are built and based on virtualization, are based on VMware core products. So we are leveraging that technology. It's exciting to look on a global basis as you see what's happening in the service provider or telco space for us. I've spent the last year flying around the world meeting with most, if not all the CEOs, C-level folks across from SoftBank to Orange Business Solutions, T-Systems, Telstra, CenturyLink, AT&T, to name a few. And there's 4,000 other ones. Yeah, I mean it's huge, it's a huge market, but what they're telling us is this is a massive opportunity for us to accelerate what we're good at and to be a software company we're not. And so they are tending to lean towards our enterprise ready type hybrid cloud service and looking in the same sense, if they want to continue on that journey, we are actually learning and providing that feedback, that best practices back to those companies where they want to continue to build their own clouds. Yeah, so there's some clean examples. There's a lot of VMware customers out there. They want VMware, they want that homogeneity. That's sort of straightforward. And there's some guys that want to go all open source and that's cool too and I'm sure Dell can support them and provide infrastructure. It's that gray area that's sort of interesting. And I'm wondering how you go to market with Dell to help customers understand when should they choose? Because customers are going to say, well, we're VMware shop but we're thinking about this, there's OpenStack coming out, we got Microsoft choices, we got all these choices. How do you and Dell collaborate to help customers squint through all that? Yeah, so I would say how do I want to collaborate at this point with Dell because we're still working through that? You know, to your point, customers need choice. They need choice of on-premise and they need choice of off-premise just if you make it simple and clear and easy. From a perspective with Dell, I see a massive opportunity for us as we look at the baseline of what we built already together and that's working within our customer base. Our virtualization software, whether you call it NSX, whether you call it, you know, some of the things we're doing around vSAN and how we're collaborating together, it gives us this format to actually explode into the cloud and cloud for us can mean a bunch of different things. It's a service that we offer that we can actually work with Dell on. So if you look at the announcements, for example, we did with SoftBank in Japan, it was really around a joint venture that we launched within there. So both companies came together. In China, we both came together with China Telecom. In Australia this week, we just announced Telstra. So we are going to look at Waze and we're already in conversations about how do we leverage our cloud service, our cloud offering, that is really designed at the enterprise, leverage the investments we've made from a technology perspective and really go to market that way. So there's still TBD on that, you know, ask me that question in a few months when we hopefully meet again and I'll tell you exactly what we're doing. What are you hearing from partners generally in Dell specifically about things like vSAN? Because you go to vSAN, you hear sort of Pat positioning it and it's sort of out of the box and it's starting to scale and it's sort of a low end solution and of course Dell, a lot of small mid-sized customers. What's the conversation like? Well, are they asking you where you're going with that thing? How do we fit in? What do you tell the ecosystem partners about that white space? You know, so first, you know, Flash has changed everything within storage as you know. And so, you know, vSAN for us is a major investment and we're going to continue to scale it. If you look across what we've done in terms of the Software Divine Data Center and that element of how we're working and leveraging storage, we're telling our partners, we're telling our customers, you know, to bet on this as we actually move through and continue to invest into that offering. It is a top of mind conversation for us right now with Dell in terms of how we're going to evolve vSAN today. There's a number of things we're doing across within the vSAN, but even tied directly into our EVO Rails, so that appliance in terms of making it easy and delivering that to our customer base. So, more to come on that as well. Okay, and obviously you still need hardware to run on it. So, where they fit in. Yeah, Todd, you have some background working on the Federation solutions inside of VMware. I'm wondering how that dynamic works when you're talking to partners in general, especially the big service providers in Dell. Yeah, so, you know, I'll take the elephant in the room first, you know. So, interesting that, you know, I have this Federation in that Federation today. Exist EMC, VCE, you know, Pivotal. Cisco actually sits within that Federation. And it is one of which we approach it the same way that VMware and EMC have always approached the relationship that we are here about offering choice for our customers, ensuring that we put the same level of investments and time and effort behind all these. The Federation, for us, is a way that we are leveraging and actually working closer with some of our combined customers when you think about specifically EMC and VMware. And we're seeing some great attributes in terms of how we're tying together and leveraging the storage elements that they do and how we move forward. It is not a, you know, a completely agnostic world though. You know, so from a Dell perspective, we are adamant about ensuring that we stay focused, we stay committed to whatever we've designed, whatever we've developed, whatever we brought into from a go-to-market perspective. Our next iteration of enabling our teams is going to be critical to ensure that we continue down that same path as we look at the different, whether it's the Federation of Companies or other. The last thing I would say is there's huge opportunity in that Federation as it relates to Dell. You know, you think of Pivotal today. I don't think there's much we're doing with Pivotal and Dell today, which as they look at launching and we do some additional things from a cloud perspective, that hybrid world, here's a perfect way to segment in terms of the developers and some of the things Cloud Foundry, for example, within Pivotal and some of the other big data elements that we can leverage and pull out of that company. I think Pivotal's a huge opportunity for a partnership with Dell. I know they've got the thing going with Cloudera, Tom Riley's up in the stage today, but Dell is agnostic to the sort of software partners that they're working with. You mentioned Cloud Foundry. Internet of Things is another example where I think the Pivotal relationship could actually blossom, in particular with GE's focus. I think Dell and VMware and Pivotal could actually do a lot there. I wanted to ask you, leading up to Dell World, we heard a lot in the trade press. Heard a lot from Michael. Michael wrote a piece about what it's like to be a private company. He addressed it today on stage in his keynote. It's interesting to see IBM giving up its x86 server business. You got HP splitting. You got Symantec splitting. You got Elliott Management trying to get EMC to spin off VMware, which ain't happening, people, et cetera, et cetera, et cetera. And Michael addressed that saying, we don't have those distractions. All of those were driven by the financial community, presumably for short-term gain. Michael's contention is that, okay, we now have more time to focus. We have a longer-term horizon. And, oh, by the way, customers and partners don't really care about that stuff. So I'm going to ask you as a partner, do you care? Do you have visibility on that? Do you see any difference, public or versus private company? What's your take on that? Speaking from my perspective and actually listening to Michael today on stage, I completely utterly think it helps us to ensure we double down on where Dell is going. I mean, he put it so perfectly when he said, it is about our ability not to care about the next week, the next month, the next quarter, that year, it's about where should we invest our time, our money, our efforts to support our customers. And that's really exciting stuff. With anything, when you have a transition like that, it could be a tough transition, and he's changed it into what I believe is a phenomenal transition in terms of where the company was, how they came through it and where they're going. And so, very excited to be a part of that. It's interesting, I mean, you work for a public company and you focus on weeks and months and quarters and I guarantee Dell's folks are still focusing on weeks and months and quarters. It's just different, they can make decisions to shift things around and not have to, he calls it a 90 day shot clock. I guess, you know, what you're doing in your role, you don't have to worry so much about that. Obviously, guys like Pat and Carl do on their quarterly calls. I work for Carl, he reminds me that every single week when I meet with him during my one-on-one that I do care about stuff like that. It does trickle down, right? I mean, so there are those pressures and it's interesting to see private companies these days raising more money, delaying public offerings. It's just, it doesn't seem to be as attractive as it used to be to be a public company. Having said that, if you've got momentum like VMware has, it's not so bad being a public company, is it? We've been a rocket ship, which has just been phenomenal. I've been with the company for five years and to see what's happened from the start, the transition from Paul Moretz to Pat Gelsinger and just look at the future, it is off the charts. We continue to scale. And vice versa, when we look at Dell, we see the same innovation, we see the same things out of Dell, so exciting to be partners with them. Well, in VMware, I've seen and studied and paid attention to their whole TAM analysis that Carl and others have done and Pat included in your CFO as well. And it's pretty crisp, there's big markets out there, a lot of competition, big markets attract competition. So that's a good thing, you guys are in a position of strength, so Todd, thanks very much for coming on theCUBE, really appreciate your insights, your time, good luck in the new role. Thank you, I appreciate it guys, thank you very much. All right, keep it right there, everybody will be back with our next guest, this is theCUBE, we're live from Austin, Dell World 2014, we'll be right back.