 From Las Vegas, it's theCUBE. Covering VMworld 2018. Brought to you by VMware and its ecosystem partners. Welcome back everyone, it's theCUBE's live coverage in Las Vegas for VMworld 2018. It's theCUBE, we got two sets, 24 interviews per day, 94 interviews total for the next three days. We're in day two of three days coverage. It's our ninth year of covering VMworld. It's been great, I'm John Furrier with Dave Vellante. Our next guest is CUBE alumni. Number one on the leaderboard right now, Sanjay Poonan. He's a great job today on stage, keynote. COO for VMworld, great to have you back. Thanks for coming on. John and Dave, you're always so kind to me. But I didn't realize you've been doing this nine years. It's our ninth year. That's half the life of VMware. Awesome, congratulations. We know all the stories, all the hidden, nevermind. Let's talk about your special day today. You had a really, so far, an amazing day. You were headlining the keynote with a very special guest and you did a great job. I want you to tell the story. Who was on? What was the story about? How did this come about? Tech for good, a big theme of this conference has really been getting a lot of praise and a lot of great feedback. Take us through what happened today. Well, listen, I think what we've been trying to do at VM where it's really elevate our story and our vision, you know, elevate our partnerships. You've covered a lot of the narrative of what we've done with Andy Jassy. And we felt this year, we usually have two 90-minute sessions, day one, day two, and it's filled with content. We're a technical company, product, and we figured why don't we take 45 minutes out of the 180-minutes total and inspire people with somebody who has had an impact on the world. And when we brainstormed, we had a lot of names suggested. I think, you know, there was a list of 10 and 15 and Malala stood out here because she's never spoken at a tech conference before. I loved her story and we're all about education. You know, the roots of VMware were at Stanford Campus, Diane Greene and all of that story. And you know, you think about 130 million girls who don't go to school, we want to see more diversity and inclusion. And she'd never spoken, so I was like, you know what? I mean, usually you go to these tech conferences, you've heard somebody who's spoken before. I'm like, let's invite her and see if she would come for the first time. And we didn't think she would, and we were able to score that. And I was still a little skeptical because you never know if it's going to work out or not. So thank you for saying it worked. I think we've gotten a lot of good feedback. Well, but in your first line, I mean, she was so endearing, you asked her what you thought of the tech conference. She said, too many acronyms. I mean, she just cracked the place up immediately. And then you heard my response, right? If somebody tells you a lot of acronyms, why don't you just tell them V-motion rocks and she'll look at you like, what? Who, tell them about our story, whatever, real quick, our story. I want to ask you a point in question. Her story, why her, and what motivated you to get her? I mean, her stories, for any of your viewers, you should read the book, I'm Malala, but I'll give you the short version of the story. She was a nine-year-old in the Pashtun area of the Scott Valley in Swat Valley in Pakistan. And the Taliban set it out of a edict that girls could not go to school, your rightful places, whatever, stay at home and become a mom with babies or whatever have you, you cannot go to school. And her father ran a school, Mrs. Iodun Yusufzai, a wonderful man himself, an educator, a grandfather, and says, no, what, we're going to send you to school, violating this order. And they gave a warning after warning, and finally, someone shot her in 2012, almost killed her. The bullet kind of came through her head, went down, and miraculously, she escaped, got on a sort of a hospital on a plane, was flown to London, and the world was, if you remember 2012, the world was following the story. She comes out of this, and she's unscathed, she looks normal, she has a little bit of a thing on the right side of her face, but her brain's normal, everything's normal. Two years later, she wins the Nobel Peace Prize, has started the Malala Fund, and she is a force of nature, an amazing person. Tim Cook has been doing a lot with her in the Malala Fund, so I think that actually also caught my attention when Tim Cook was working with her, and you know, whatever Apple does often gets a little bit of attention. Well, great job selecting her. How is that relevant to what you guys are doing now? Because you guys had a main theme called tech for good. Why now? Why VMware? A lot of people are looking at this and inspired by it. Tell us the story. There are milestones in companies' histories. We're at our 20-year birthday, and you know, I'm sure at people's birthday, they want to do big things, right? 2030, 40, 50, these decades are big ones, and we thought, let's make this year a year to remember in various different things we do. We had a 20-year anniversary celebration on campus. We invited Diane Greenback. It was a beautiful moment internally at VMware during one of our employee meetings. It was a private moment, but just with her, to thank her. And man, there were people who were emotional, almost intersting, thank you for starting this company. A way to give back to her. Same way here. You know, what better way to talk about the impact we are having in the community than have someone who is of this reputation. Well, we're behind your mission 100%, with anything you need. We love the message, tech for good. People want to work for a mission-driven company. People want to buy from mission-driven companies. That state is clear, and the leadership you guys are providing is phenomenal. We had some rankings that came out around the same time. Fortune ranked companies who were changing the world, and VMware was ranked 17 overall of all companies in the world, and number one in the software category. So when you're trying to change the world, hopefully, as you pointed out, it's also an attractor of talent. You want to come and work there, and maybe even attractor of customers and partners. You know, the other takeaway was from the keynote, was how many cricket fans there are in the VM world community. Right now, of course, there are a lot of folks from India in our world, but who's your favorite cricketer? Was it Sachin Tendulkar? Clearly, you're reading off your notes, Dave. That's a dead giveaway, man. Our Sonya's like a cricket geek. She's like, ask him about Sachin. No, who's your favorite cricketer? She wants to know. Sachin Tendulkar's way up there. I'll show you the freedom of the person she likes from Pakistan. I grew up playing cricket in soccer, but listen, I love all sports. Now that I'm here in this country, I love football, I love basketball, I like baseball, so I'll watch all of them. But, you know, you kind of have those childhood memories. Sure. And the childhood memories were like she talked about, India-Pakistan games. I mean, this was like, I don't know, LA Dodgers playing Giants, or Red Sox Yankees, or Dallas Cowboys and the 49ers, or, you know, Germany playing England or Brazil, I mean, in the World Cup. Whatever your favorite country or team rivalry is, India and Pakistan was all that and more, but imagine, like, a billion people watching it. Yeah. Well, that was a nice touch on stage, and I'd say Ted Williams is my favorite cricketer. Oh, he plays baseball, he's a Red Sox player. All right, Saanji, let's get you on the hot seat, let's get down to business here. Great moment on stage, congratulations. Okay, Pat Gelsinger yesterday on the keynote talked about the bridges, VMware bridging the, you know, connecting computers. One of the highlights was kind of in your wheelhouse, this is in your wheelhouse, the BYOD, bring your own device bridge. You're a big part of that, making that work on the mobile side. Now with cloud, this new bridge, with how is that go forward? Because you still got to have all those table stakes. So with this new bridge of VMware's in this modern era, cloud and multi-cloud clearly validated, Andy Jassy on stage, doing something that Amazon's never done before. Doing something on-premise with VMware is a huge deal. I mean, we think it's a massive deal. We think it's super important. You guys are super committed to the relationship. On-premises, hybrid cloud, multi-cloud is validated as far as we're concerned. It's a done deal. Now, balls in your court. How are you going to bring all that mobile together? Security, is it workspace one? What's your plan? I would say that, listen on the, as I described my story today, there's two parts of the VMware story. There's a cloud foundation part, which is the move the data center to the cloud in that bridge. And then there's the desktop moving to the mobile. Very briefly, yes, three years of my five years we're in that business. I'm deeply passionate about it. Much of my team now that I put in place there, Noah and Shankar doing an incredible job. So we're very excited and the option is huge. I said in my keynote of the seven billion people that live in the world, a billion I estimate work for some company small or big and all of them have a phone. Likely many of those billion have a phone and a laptop like you guys have here, right? That real estate of a billion and a half, maybe two billion devices, laptops and phones, maybe in some case laptop phones and tablets, okay? Someone's going to manage and secure and they're diverse across Apple, Google, big option for us. And you know, we're just getting started and we're already the leader. In the data center cloud world, you know, Pat, myself, Raghu, really as we sat three years ago, felt like we shouldn't be a public cloud ourselves. We divested VCloud Air as I've talked here in your show before Andy Jassy is a friend, dear friend and a classmate of mine from Harvard Business School. We began those discussions, the three of us, Pat, Raghu and myself with Andy and his team. And as every quarter and year has gone on, they've become deeper and deeper partnerships. Andy has told other companies that VMware-Amazon is the model partnership Amazon has as they describe who they would like to do business more with, right? So we're probably going to do that when we see that happen. And we want to continue that. So when Amazon came to us and said, listen, I think there's an opportunity to take some of our stack and put it on premise. We kept that confidential because we didn't want it to leak out to the world. And we said, we're going to try and try and announce it at either VMware to reinvent. And we were successful. Apart with these projects as they inevitably leak, we were really glad like no press person like sniffed it out. There was a lot of speculation. There was no, a lot of speculation, but no one sniffed it out and wrote a story about it. And we were able to have that iPhone moment today, or sorry, yesterday when we unveiled it. And it's a big deal because RDS is a fast growing business for them. RDS landing on premise, they could try to do on their own, but what better infrastructure to land it on than VMware? In some cases it would be VMware running on VxRail, which benefits Dell or our hardware partners. And we'll continue doing more and more and more as customers desire. So I'm excited about it. And Andy doesn't do deals as you know, Andy, well, as we do. He's customer driven. Tell me about the customer demand on this because this is something that we're trying to get reporting on. I mean, obviously it makes sense technically the way it's working, but you guys and Andy, you guys and they just don't do deals out of the blue. There's customer drivers here. What are those drivers? Yeah, I mean, we're both listening to our customers and perhaps, you know, three, four, five years ago, they were very focused on student body left, everybody goes public cloud. Like forget your on-premise, obliterate your data centers and just go completely public cloud. That was their message. Sweep the floor. Right, if you went to first reinvent, I was there on stage with them as an SAP employee, that's what I heard. I think you fast forward to 2014, 2015, they're beginning to realize, hey, listen, it's not as easy. You're refactoring your apps, migrating those apps. What if we could bring the best of private cloud and public cloud together, enter VMware and Amazon? And he may have felt it was harder to have those conversations at VMware for all kinds of reasons, like we had vCloud Air and so on and so forth. But once we divest that decision, the conversations that matured between us, that door opened. And as that door opened, more conversations began, jointly between us and with customers. And we feel that there are customers who want many of those PAS type of services on-premise. Because if you're building great things, relational database technology, AI, BI, maybe IoT type of technologies, if they're landing on-premise in an edge computing kind of world, why not land them in VMware because we're the king of the private cloud. And we're very, very happy to have those. We progress those discussions. I think in infrastructure software, VMware and Amazon have some of the best engineers on the planet. And sometimes we have engineers who've gone between both companies. So we were able to put our engineering teams together. And this is a joint engineering effort. Andy and us often talk about the fact that great innovations built when it's not just Barney go to marketing and marketing press releases, there's true joint engineering at a deep level. That's what happened the last several months. Well, I can tell you right now, the commitment I've seen it from an executive level and deep technology, both sides are deep and are committed to this. It's go big or go home, at least from our perspective. Question I want to ask you, Sanjay, as you're close to the customers of VMworld, VMware, what's the growth strategy? How do you, if you zoom out and look down on stage, you got V-SAN, NSX at the core. V-SANJ. Sorry. I feel you're not like a product that has my name in it, man. So I mean, you got all these things. Where's the growth going to come from? An emerging size, a V-Sphere going to be the stable, crown jewels at NSX. How do you guys see the growth? Where's it going to come from? Yeah, just kind of look at our last quarter. I mean, if you peel back the narrative, John and Dave, two years ago, we were growing single digits, like low single digits, two, three percent. That was the, you know, the maybe legacy loser, description of VMware was the narrative of their license revenue was flat-ish, right? I mean, yeah. And then now, all of a sudden, we're double digits. You know, 12, 15, I mean, it's sort of in that range for both product revenue and so it's a, so it's harder to grow faster when you're bigger, right? And what's happened is that we've stabilized compute with V-Sphere in that part. It's actually been growing a little bit because I think people in the VMware cloud provider part of our business and the halo effect of the cloud meant that as they refreshed their servers, they were buying more V-Sphere. That's good. The management business has started to grow again. Some cases double digits, but at least sort of single digits. NSX, the last few quarters grew like 30, 40 percent. V-San, last year was growing 100 percent of a smaller base, this year growing 60, 70 percent. EUC, you know, has been growing double digits, taking a lot of share from companies like Citrix and Mobile Iron and others, and now also still growing double digits at a much bigger pace and some of those businesses are well over a billion, right? Compute management and user computing. We talked about NSX on our Q4 earnings called being a 1.4 billion. So when you get businesses to scale, about a billion dollar type businesses and there's sort of four trending five that are in that area, and they all get to grow faster than the market. That's the key. You got to get them going fast. That's how you get growth. So we focus on those top five businesses and then add a few more. Like VMware cloud and AWS right now, our goal is customer logo count. Revenue will come, but we talked in our earnings call about a few hundred customers of VMware cloud and AWS. As that gets into the thousands and there's absolutely that option. Why? Because there's 500,000 customers of VMware and 2 million customers of Amazon. So there's got to be a lot of commonality between those two to get a few thousand. Then we'll start caring about revenue there too, right? But once you have logos, you have references, containers. I'd like to see PKS have a few, you know, hundred customers and then we put one on stage today, National Commercial Bank of Jamaica. Fantastic story of PKS, right? I even got my PKS socks for this interview. So that gives you a sense as to how we think. There will be four or five that are business at scale and then a few that are starting to get there and they become the business at scale and a few, the nature of software is we'll always be doing their show because there'll be new businesses to talk about. Yeah, hardware is easy. Software's hard as Annie Pechlisdine said on theCUBE yesterday. Congratulations Sanjay on all your success. You guys are doing great financially. Products looking really good coming out. The bloom is arising from the fruit that you guys have harvested now coming together. John, if I could say one last thing, I shared a picture of a plane today and I put two engines behind it. There's something I've learned over the last few years about focus of a company and I joked about different ways that my names are pronounced but at the core of me, there's a DNA, right? I said on stage, I'd rather not be known as smart or stupid but having a big heart. VMware, I hope, is known by our customers as having these two engines. Engine of innovation, innovating product in a variety of other things and focused on customer obsession. We do those, the plane will go a long way. And it's looking good. You guys, we can say we've been into radio event. We've been doing a lot of great stuff. Congratulations on the initiative and a great interview today on doing tech for good and sharing the story, getting more exposure to the kind of narratives people want to hear, more women in tech, more girls in tech, more democratization. Congratulations and thanks so much for sharing. Thank you John. I appreciate being on the show. Sanjay Poonan, COO of VMware, friend of theCUBE, CUBE alumni, overall great guy, big heart. And in competitive too. We know that from his Twitter stream. Follow Sanjay on Twitter. You have a great time. I'm John Furrier with Dave Vellante. Stay with us for more coverage from day two live here in Las Vegas for VMworld 2018. Stay with us.