 Good afternoon everybody. All right. We're live That's right, we're here at the HDS event and They invited us and so we accepted to come and speak on stage and help launch the new VSP so we're talking off camera just Start set the conversation. So you live in Palo Alto and you live right around the corner from Steve Jobs You see him walking around the neighborhood a little bit He's a healthy everything's going good. Yeah, he looks great great coverage in the neighborhood with the iPhone I think it's safe to say that AT&T will make sure Steve Jobs He's probably saying why is everyone complaining about AT&T? I have no problem in my neighborhood Well, hey great to have you on obviously I'm really excited to talk to you right now about when Hitachi at a great event to your deal with the relationship there But we had a great time at the York show VMworld the cube was a centerpiece We had 60 guests on and now he had Todd Nielsen all your partners all the top executives and customers And we heard a lot of great conversations One of the things that Todd Nielsen was bragging about and talking about and I'd be talking about it, too Is he said that for every dollar license of the mware license? He throws off $15 in ecosystem revenue So of course that's going to attract a crowd So what's the update on that? Well, so and you know, it's actually What that is it's a testament to the fact that we are fundamentally a platform and we are a next-generation Platform that's ushering a new architecture if you will that combines the best of what we've done on the web as well as in private data centers and when you have a platform of such magnitude it has impact up and down the stack and That creates a lot of opportunity for the ecosystem because customers say you know what? This is a fundamentally new way of doing things a new way of architecting and delivering my IT and Therefore I'm going to rethink. I'm going to rethink the servers the storage the networking the security How I write my applications how the middleware behaves and and when you have people fundamentally rethinking things like that It creates opportunity up and down the stack and they're willing to to evaluate new vendors new approaches And I think what you're seeing is a testament And you know, this is not necessarily new if you go back last 30 40 years major new platforms that have come along have had a pretty significant ecosystem around them and What's really surprising is that one to $15 number about two three years ago was one to 11 which shows you The investments still pretty big number significant numbers. So let's talk about the VMware's culture. The VM world was a very How do I say this woodstock like environment? It was intoxicating people were just it was energy around Compare that to last week. We're at Oracle open world. Some were saying closed world Oracle's got a different vibe. I mean their clothes are saying this is the box. It's fully integrated I didn't see a lot of excitement and you you manage the Oracle relationship Do you did you one did you see the same thing and and how do you compare and contrast the two views between Oracle and say SAP or Hitachi and say, you know, someone who's got a close architecture, you know, I think it's it's a fundamentally different approach I think Oracle's message is they'll provide every layer of the stack They'll integrate it and they will be you know, the one stop that everybody goes to But I think and what we and you know vendors like SAP and Hitachi and others talk about is well We are going to be the best at our layer. We're going to do certain things extremely well We're going to do it in an open and pluggable way so that you can plug in pretty much any other vendor or technology That you like and I think what this speaks to it's it's two fundamentally different approaches and and you know It forces customers to go down to make that decision But what we find is a lot of customers will buy into a vision But they'll have different philosophies and how they want to implement it especially at different layers of the stack So that's why we think in the long run the open approach giving customers a lot of choice at different layers of the stack In terms of service providers private versus public hosting options I think giving customers a lot of those choices is a lot more attractive Yeah, and I think you know that for me, you know I'm old enough to remember the client server revolution and the PC revolution and you know a lot of companies made a lot of money I mean a lot of wealth was created during that whole you know PC kind of grew organically and people started networking together with Novel and you know and you had print servers and next you know like hey You know we should actually put this all together. We'll run the mini computer when that hey We'll run this SAP Oracle stuff on it boom Centres were born all these consulting firms were doing deployments and you know it transformed businesses We're seeing that same dynamic now. That's why I'm so focused on that ecosystem number because I Believe you guys were in a great position to be that next catalyst and I think that was what was so exciting about VMworld is that Actually with Maritz and say gelsinger at EMC and you know Tom George is at NetApps and among others here, you know we heard from you know here at CEO and Hitachi You have an ecosystem of big players Mm-hmm who would ignite consulting firms a new way of doing things. So the question is What is that new way and now see the framework and abstracting way the complexities, but for the folks out there deploying the consultants What's the mindset and what are they doing right now and for the folks who don't know what to do? What would you recommend? Yeah, well, I think I think The clear-cut observation is that the train has left the station in the sense that the vision that we've been outlining for the last Few years is something that customers have en masse Adopted and they're moving systematically, but surely to Implementing that in different ways and I think when you speak with systems integrators and the ecosystem You know they see the value and the power of that vision and they're also rallying around it Coming up with their solutions for their layer And helping customers kind of get that that destination point You know there's been some criticism folks out there saying, you know crapplications have heard that term much of times by some bloggers The reality is they are moving there and we talked about proof points at VM world Is there anything that you're saying the same? Hey, this is you know without a doubt the trains left the station But here are examples of bona fide Environments that that's a no-brainer to be virtualized on. Mm-hmm. So, you know, it's so We call it up the customer journey There are three phases we believe to the typical customer's journey to getting to a hundred percent virtualization to some of the benefits We talk about of cloud computing. You know the first step is they start implementing virtualization in test and dev environments Those are safe environments are not very demanding. The next is to go into what we call it production. So This is where you take your IT Resources file and print servers domain controllers Active directory DNS and you virtualize them and the third and final stage is what we call business production So this is where you take your business process applications your mission critical apps and start virtualizing them now With each successive generation of technology both the VMwares and our ecosystems Customers able are able to go through those phases with much more confidence So today for example, if you look at the performance of any application on VMware We can virtualize, you know just about any app and handle and show no difference compared to physical Now there are a lot of skeptics out there and they have to be you know taking to the lab and we demonstrate that to them But we've got customers running intense databases. We've got customers running SAP We even have a lot of customers running Oracle application database on VMware and he runs as well as if not better than Physical and on just to give you one proof point We just set a world record for database performance. So the previous record was set. I believe last September by Oracle rack We just set a record in conjunction with par Excel, which is an up-and-coming Column or database vendor. We went to the TPCH benchmark They came and did the audit and we set a world record for I for database performance But we also set a world record for cost performance So the previous record was something like five dollars or six dollars per query Including all the hardware and TCO our record was at something less than a dollar a query So that that takes that whole price performance kind of concept It says hey, you know we can blow it away and lower price, right? So not only can you run extremely demanding things on vSphere 4, but you also get the economic benefits I mean, it's the thing I mean this is the thing that's intoxicating is that you know that those numbers do resonate with the ecosystem and You guys have been dealing with an ecosystem for a while and VMware has changed. So there's been you know good things Hey, you know there's obviously a lot of praise with VMware, but your business has changed Yeah, I've been some criticisms in the partner ecosystem around, you know, hey You know that they told me they're going to do this But you know you guys got to make a business and you're making changes What you know what Paul laid out at VMworld was this is what we're doing. It was a clear Communications and so as the Lions executive you got to communicate and that's a core part of your challenge Absolutely communicate to the folks out there about the ecosystem strategy. What are the safe zones? And because that's all they want to know you know one we're the growth areas Tell me what the growth areas are and where do I play and then also tell us we're not to play Well, you know fundamentally Let me let me lay all that out step by step the the philosophy You know as a starting point is that we want to be an open platform. So we will continue to Interoperate with as many vendors up and down the stack as possible So you know here I am at a Hitachi data systems event. No problem at all So we support all the hardware vendors all the software vendors equally Secondly we want to being an open platform means we're going to start opening up the platform So more API's more enablements So this morning one of the things that was mentioned is the vStorage API's and how they allow a storage array to Do a lot of core processing in the at the array level rather than at the virtual machine level and that makes the overall setup Much more efficient so we need to continue doing that now This is something we started just a few years ago So it's a relative we are relatively early in the cycle Maybe we're in the third inning of learning how to open up the platform and there are our Starts and stops. There's learnings along the way, but you're better down in the lower parts of the stack That's where your core competencies may be moving up. Exactly. So but that's the thing I tell the ecosystem is we are learning how to open up the platform open up to everybody You know not just a handful of vendors and we'll get better over time number one Number two is we certainly have a direction or roadmap and We are articulating and we're getting better at articulating where we're going and where the opportunities for the ecosystem If I could just explain a few of them, you know security as people move to the cloud They're very concerned about their data and the security of the overall system So there's a lot to do in that realm We announced a couple of products, but there's a lot more that can be done And we're in active discussions with a lot of security vendors about what those things look like Same thing goes with management. That's a tremendous opportunity as Environments get more complex as people move to a hundred percent of virtualization center We have v-center, but we've designed that to be an open framework So you can plug in your management product into that or you can plug into the v-center api's and extract information out About virtual machines and manage them through your pane of glass So, you know, it's pretty much trying to project your view of the world. You're saying hey Here's v-center right if someone comes up with a better mousetrap God bless God bless them and let the customer decide and the fact of the matter Is we have 200,000 customers and we hope to gain many many more and each of them will have different requirements and preferences Sometimes v-center is the answer. Sometimes it's something else. Sometimes it's a long-term view. I mean, that's right So let's take a little kind of like go back in history Microsoft final question I'm getting that getting the hook here final question Microsoft has always was great in the early days You knew if you were on their side everyone made a lot of money if you were an enemy They killed you so Not that vm was going to be that evil But you know an ecosystem you got to articulate the boundaries where shouldn't people play can you talk about that publicly or no comment Well, what I would say is, you know Fundamentally we're a very different company than Microsoft and we also live in a different era than when they really You know came to life in in the 90s and 80s We live an era where open source Is critical you have to support it you have to play in an open source way You know, we've made a lot of our stuff open source You have to You have to be open and to all there's a lot of standards out more transparent more transparency There's more vendors out there than there were in the 80s and 90s So I think we so I think it's apples and oranges number one Number two, I think we have to earn that trust of the ecosystem So we have to every day every quarter every year You know demonstrate that there's opportunities when you feel good about that right now Just kind of on a on a on a 10 being high satisfaction Where are you at in terms of your level of? Well, you know I the way I think what is our ecosystem is larger than ever before You know, we have something like 25,000 partnered worldwide dozens and dozens of new ones sign up The amount of investment the partners are making you know as you as an example at VMworld is tremendous So they continue to read the economic rewards of investing in VMware Investment areas going forward any new initiatives that you want to share with folks Well, I think you know the desktop is a tremendous area of growth You know we laid out our vision of end user computing rather than just desktop virtualization There's lots to be done in that space whether it's management or security or storage or networking There's lots of opportunity there You know, we also laid out our vision of the applications platform You know people want to write a whole new generation of applications call them cloud based apps Well, there's a lot of opportunity for the underlying applications platform And the other thing I would say for the ecosystem is the fact that the opportunity for them keeps growing So three years ago, you know for a dollar spent on vm where there was 11 dollars spent on the ecosystem Today that 11 dollars has become 15 So we are growing the opportunity for the ecosystem. We're here at the cube. I'm getting the hook I want to go all this this is a worthy segment for 30 minutes But uh, you're in Palo Alto. You can come to our cube. We can check in with you guys Absolutely really exciting area growing on the ecosystem side I think, you know, we called it vm where a hundred billion dollar market cap And we think they're going to be there in a few years So, uh, park Patel, thank you so much for coming on. We got to go to another guest. Thanks for stopping by Unannounced, but we love vmware partnering with hitachi data systems with their new Uh, big platform. So, uh, we're going to come back with David shepherd from iowan demand. Thank you park Okay We love vmware vmware is great