 from Las Vegas. It's theCUBE, covering AWS re-invent 2018. Brought to you by Amazon Web Services, Intel, and their ecosystem partners. And welcome back once again here to Hall D in the Sands Expo, where the AWS re-invent for the third day of our three days of coverage here on theCUBE of this fantastic show, Justin Moore and John Walls. We're now joined by Prashant Shedrasekar, who was the SVP and GM of Managed Public Cloud at Rackspace. But Prashant, good to see you this morning. Absolutely, thank you for having me. You bet, and Ajai Patel, who was the SVP and GM of Cloud Provider Services at VMware. Good morning. Glad to be here. Good morning. All right, first off, let's talk about Rackspace a little bit if we can, Prashant. You're kind of going through this metamorphosis, right? This transformation of sorts. So kind of get us up to speed a little bit about your journey, about where you've been and where you're going. Yeah, absolutely. I'd love to. I think Rackspace has been on a phenomenal journey over the past 20 years. So this is our 20th year anniversary as a company. So obviously we've been known historically for our managed hosting DNA and we came from that a long time ago. But over the years, we very much are very, very focused on customers just like Amazon is and VMware is. And we really thought about how do we make sure that we're where our customers want to go. And so we evolved effectively to support the leading technologies in either the public cloud space like an Amazon, Microsoft, Azure, Google, Alibaba or in the private cloud space with VMware and even our own open stack private cloud deployments along with our traditional managed hosting business. So over the years and also with a very, very phenomenal new owner in Apollo we've been transforming as a company that's truly a next generation IT services company looking to take enterprises into the future at their pace, by the way, meeting them where they are and really making sure that we bring to bear of really best of read services, cloud services to really kind of manage that transition to the cloud and to make the most of that investment. They use that carrot approach, right? Not to say you're bringing along gently which many people need. All right, so each of you has your expertise. I'm talking about the companies here. But now this partnership, this synergy that you have it's kind of like peanut butter and chocolate in a way, right? Great combination. Everybody's going to love it. Talk about that partnership and how it's come together how that's playing out right now. So from a philosophy perspective we're both goal aligned, right? We're starting to see this world being a multi-cloud world and more importantly it's all about the customer on their journey. They're going to have existing assets, existing data centers for a long time. They're going to need support in terms of the legacy applications but also as they replatform, re-host and modernize the application. And they need a strategic partner. So RackSpace is the same way, right? Starting to provide that set of choice and help the customer on their journey at their own pace enabled by a common technology platform. And so as a company we've also transformed ourselves from going to be a v-sphere only company to starting to embrace public clouds. Whether it's VMware cloud on AWS or a recent cloud health acquisition which allows us to start managing a native public cloud. So in this journey we're seeing ourselves as peanut butter and chocolate as you said. Working together hand in hand for the benefit of our customers. Yeah I really love that analogy and thank you for it because in some ways VMware and RackSpace are very much our philosophies are exactly the same in terms of where the customer journey is but we approach the problem with two different angles. You know one we come from it from a technology services angle because we're a service company at heart, right? We're a fanatical experience and we're known for that. And VMware is obviously a phenomenal technology platform company but we both believe in a multi cloud and a hybrid cloud world where we see that hey the journey to the cloud is a very very long standing one we're in the early innings of this where customer workloads are actually moving and you know this is you know you can talk about the projections you're literally probably over a trillion dollar a spend over the next decade or so that's going to move. It is very form factor so it's a really exciting time and you know we are really really aligned with our partners with VMware and of course AWS and the other public cloud partners. Yeah so you mentioned there we are at the beginning. It's just the start of how things are working so with customers who are looking at this transformation journey and trying to make this decision about what do I keep on side? What do I transform? What do I replatform? What do I just completely replace with something new and let the old one die? How do you help customers make those decisions? Yes absolutely. So this is the heart of what Rackspace is doing for our customers today, right? So we are very much a company that's basically taking a very unbiased approach we're taking about literally thinking about the planning stage and assessing their workloads going through an application assessment and doing all the work that's required to understand you know what which workloads need to go on each of the public clouds which one runs well on Amazon which ones actually should be better leveraged on a VMware and AWS sort of scenario and so on right? So there's a very deep assessment that's done up front and then we go through the process of architecting and deploying based on best practices that we've gained from by the way thousands of these you know customers that we've actually moved and then actually managing and operating these environments which you know we've been talking about at Rackspace that's our DNA and optimizing those environments for cost and the greatest and latest of features that you know any of these providers provide. So you know that's the journey and the way we do that is using a true next generation cloud services instead of you know kind of capabilities which we announced a couple of weeks ago in a press release and that includes something with the notion of service blocks as we call it Rackspace service blocks where you're literally able to mix and match all the things that I just mentioned along the journey dependent on where the customer is on their journey so you know we could say let's focus just on architecting, deploying and migrating apps and that's it, that's what the enterprise wants because they want to enable an internal focused motion to manage these and they want to skill up their internal people to do that or you might encounter a company that actually wants us to actually manage the whole thing and that's fine too and they may be by the way nine months into their experience that they realize that or later down the line they want us to help them with cost optimization or Kubernetes expertise to actually move into the container world so that whole, you know the curve and the transitioning through that process is our job to make sure meet the customer where they are and make sure we deliver value very specifically at that point in time for them and not be, not put customers into some long-term monolithic sort of contract so we're very, very being agile around us. Yeah, it's very interesting because as you see the complexity's only gone up it hasn't gone down as long as we talk about cloud benefits the amount of services being launched the complexity of all the different technologies Rackspace is uniquely set up we're going to have the VMware expertise and the AWS certified partners that we can start to bring the value together so we're excited about kind of mixing and matching and kind of this modular set of services and capability that you can bring to bear for the customer so I think Rackspace was in a unique position in some ways, right? To be that trusted partner as we move on this journey. And to put some numbers around that very specifically that Ajay said, you know we have over a thousand 1100 Amazon, you know certified certifications at Rackspace we have probably a very similar number on VMware, right? Over a thousand kind of VMware people that actually service customers and that's always one of our biggest- With enterprise DNA and enterprise support, right? That's correct, that's right. And then ultimately we know so that combination of expertise is very material and at scale for our customers to be able to leverage, right? So Ajay, you've got a long history with enterprise customers you've, people have been using VMware for a long, long time. What are you seeing from your existing customer base? What kind of technologies are they interested in? What are they moving to? Where is the momentum? So clearly the excitement and hype is around containers, Kubernetes, serverless, et cetera. But the bread and butter workloads are existing applications. They're looking to optimize the data center costs sometimes eliminate data centers. They're looking to lift and shift entire landscapes of application, move them to cloud. They're looking for expertise, building a center of excellence, right? Starting to provide a common operation model around a multi-card world. So they're now starting to hit what I call real world problems where the experiments are working they need to now create a operational model around that and they're starting to go back to the trusted partners. VMware is a platform provider. Rackspace is a trusted managed services provider. Whether it's up front in design or to help operate. So we're starting to see this maturity is coming in place and cost is not really the driver. They're starting to find that public cloud costs are actually an issue. So cost management tools. If you just walk around the shelf floor it's all about cost management, security, visibility. These are all signs of a maturing market, right? And because of that, and you talk about a maturing market if I'm just now making my entry, all right? I've decided, we're running our company so it's time to jump into the public cloud. Is there benefit to us being maybe a little more- I'm a follower. Yeah, and others because there've been other growing pains. You've already kind of, you've found where the wrinkles were and so we will benefit by those past experiences. So I'm giving you a chance let me talk to somebody who hasn't made that commitment yet. And they're thinking I'm so far behind. Yes. But they're not. I think this is a spot on point, right? So when we work with enterprises what we've really seen is that let's say a company has got 10 divisions within the company. And you know, generally speaking you've got maybe a couple of divisions that have gone ahead of the pack. They've already done it because they actually went with the cloud curve. They're leading the world internally. They're being these internal sponsors and the champions for the movement. And you've got some laggards along the way as well. So Rackspace, our job is to really bring true up if you will the level of kind of capability with the groups that are actually lagging, right? And also not to do it in an artificial way but actually do it on their terms. To say, listen, you know what? You may not be ready for the kind of a containerized world tomorrow. Maybe you actually start leveraging basic EC2 and S3 to get started, right? Which is, you know, a few and fewer number of companies that are not there already. But, you know, the ability for you to, you know move along and use advanced services. That's our job to keep moving them and encouraging them to do it by enabling them through our tooling that we've built and leveraging through partners like VMware or even on the top of each of the public clouds that we've built for price or tooling or through the expertise that we're bringing to bed. So that's the combination. It's never too late to get started. Yes. So for customers who might have just decided that actually I've decided, yes, it's time to go to cloud. I'm ready. How do they begin? How should they start on this journey? How would they start to engage with you? Yeah, so I think for us, it's what we've noticed is that it's very important to just make sure that you take a success based and phased based approach. And so starting with a place in the organization where it actually makes a difference. There's a differentiated set of applications that are going to make a difference with the customer that they're trying to serve. Or it could be, listen, they have actually a problem where they have 27 DCs as a customer that I was talking to yesterday that is about to join us. That's why they're trying to consolidate down to six data centers over the next two years. So how do you go about that problem of doing DC consolidation? And how do you figure out which workloads go on, which platforms, et cetera? So starting with some very specific problems could be as big as a DC problem or it could be as specific as let's go work on this very specific differentiated critical application on the cloud, et cetera. And that really creates a mushrooming effect because you notice the difference it makes in terms of developer productivity, your agility, your ability to deploy code into production multiple times. And that just drives, it gains the attention, what we've seen is that finally gains the attention of the CIO and the company. And then the CIO is like, listen, I better get control of this because in some situations we have hundreds and thousands of Amazon accounts within these organizations but they're ultimately now on governance and visibility. And so that's when it starts creating a more holistic enterprise-wide kind of strategy around cloud and adoption and one of the various form factors they should use to actually keep moving on. So really it's mushrooming with a center of excellence and a sponsor or a line of business that's really starting and that's really where we've seen success. You know, one of the things I'll add to that is the guys who are fast followers now are getting the benefit of hindsight of other partners, as you just said. And a couple of things I'm starting to see in the market. They're starting to make some strategic bets. They're picking a strategic technology partner from a technology platform perspective. They're looking for a strategic service provider partner, a managed service partner. And they're starting to look at them as trusted partners. The conversations are moving away from being transactional to more success oriented. Now, even Andy talked about that. It's really about outcomes. And in this journey, I think you're starting to find the right partners, building the core competency within your organization and finding kind of those kind of sustaining technology platform choices that guide you through this hybrid world. That's where the world goes. The battlefield now is all about hybrid. It's no longer about private or public. Everyone's just, even Amazon finally recognized the world is a hybrid with their outpost announcement, right? It's starting to look at how do I work in this hybrid world and what's the right operating model, right? So it's a really interesting time to kind of imagine, look, the world is going to be public and private. How do I operate in this, right? Cloud all the things, makes sense. I do want to say before we say goodbye that when Prashant was talking about laggards, he was really looking at us an awful lot. I don't know what to make of that, but we won't take it too personally. Might be the beach, maybe. Thanks for being with us. Absolutely, thank you. Thank you very much. Thank you gentlemen. Back with more from AWS re-invent. We're live in Las Vegas and you're watching theCUBE.