 And now, SiliconANGLE TV and Wikibon.org present a focus spotlight. Live from Las Vegas at VMworld 2011, host John Furrier and Dave Vellante, a human being, cloud conversions with support from HP Cloud System, the most complete integrated platform for building and managing clouds. Hi, we're back. This is Dave Vellante at Wikibon.org and I'm here with Stu Miniman also of Wikibon with SiliconANGLE's continuous coverage of VMworld 2011. We're here live in Las Vegas. And Stu, we're here for another spotlight. As you know, these spotlights are in-depth segments to help practitioners better understand a particular topic. And the topic here is cloud convergence. So let's get right into it, Stu. We've got a set of slides that we've put together. And the first slide we're going to talk about, Stu, is the CIO outlook on cloud. And you basically got pressures down, some key issues they're facing, and you've got some incentives for cloud. So, you know, let's take off the issues real quick. What do you see, Stu? So, Dave, you know, it's real easy to say that security and management are a challenge in the marketplace. One of the real focuses we've seen in the ecosystem is tackling kind of the lock-in or integration of clouds. So it's one thing about getting your information in the cloud, but how do I make sure that I can get it out if I need or be able to move it between providers, if need be. And that's also an issue moving between my internal cloud and, you know, bursting. So you've got the evil twins of the cloud, security and management, but the incentives, as we know, are the economics, the flexibility, the agility that the cloud brings you. And the last point on that, of course, is that the business units and the application heads are the ones that have typically been driving that cloud adoption much faster than IT can provide. And IT managers need to catch up to that. So all you need to know on this next chart that we put together, this is from an infographic that we did. Shout out to Derek Edmond and his team. The cloud service revenues, you know, it's growing, people are projecting it, no matter whose numbers you look at. The bubble today is small and it's going to get huge. You know, North America leading adoption, as is often the case, but we're talking about many, many billions here. You know, 30 plus billion-dollar business by the... Yeah, 560 or over 40 billion dollars and, you know, measuring it not so much as to hardware anymore, but services are a big piece of what's going on here. Yeah, I think ultimately services are going to be the biggest piece of the pie. Cloud adoption, here's some data from IDC. It's interesting, we showed some data earlier in the week around cloud adoption and people are just getting on the curve, but having said that, a lot of people have cloud as projects and a lot of people, according to this survey, have cloud as a priority project. And it's mixed, right? You've got some public, you've got some private, you've got some outsourced, you've got some traditional IT. Yeah, it's not one cloud. We expect thousands of service providers to be out there as David Floyer, our CTO, always likes to say it's horses for courses and various courses for all those horses. The one thing we have seen, though, is that this notion of hybrid cloud, the marketing is leading the actual implementation and that's why we want to talk to some of these practitioners to get from point A to point B. Yeah, I think we've pretty well defined private clouds, but hybrid clouds, you know, it's taking a little bit of time for that reality to kind of sit in. So, we've put together some thoughts, Stu, on the business angle here of cloud. What are you seeing here as far as the business perspectives? So, one thing is that when you look at the architectures inside our data center, we're sure that they built things built on a solid infrastructure. So, whether they're building best of breed or buying from a single vendor, they're very specific as to what they do. People sometimes look at Google and say, that's what I want to do, but Google is doing things for one specific application and they have, you know, just a much bigger IT budget than anybody else is going to have for that type of environment. So, cloud environments look much more like enterprise environments, and it needs to go to homogeneity and building blocks to be able to help reduce some of the overhead of the cost. So, you're talking about converged infrastructure that essentially is a capability, let's use an obvious example, compute storage and networking that serves not one application, it's not purpose built, it serves the entire application portfolio, right? It needs to be able to be scalable, it needs to be able to be manageable, and it needs to simplify the environments. This slide is a very interesting one that put forth by Amazon and it really talks about the benefits of cloud. The dashed line is the predicted demand, that's the hard part, you got to predict the demand, so what you do is you say, all right, let's buy more than we need, that's the blue line, the step function capital expenditure, and then the actual demand is the red line. And so, if you miss, you're in trouble, that's that red area there, and then you don't have to worry about what's that red area there, and then you don't have enough capacity to meet orders during the holiday season or something like that. And one of the challenges what you look at here is when you're building an internal cloud environment, sometimes you could burst beyond what could be in that internal environment, so that is where, I think in the next slide we're talking a little bit about cloud bursting, and it's been a little bit of a hot potato as to what is cloud bursting and how does this technically work, because from a latency standpoint, speed of light is always going to be a limiting factor for some application. Well, we heard in the cloud service provider spotlight today, that ability to provide granular pay by the drink is the real priority of the customer base. And we're seeing some innovations from VMware this week that support this initiative, right? Right, so one of the ones here, they launched a website at vcloud.vmware.com, what's really interesting about that is how do I find a service provider in my area built for my applications and this is VMware's ecosystem, so partners like IBM and HP, Dell are all building these clouds in these various service providers. Alright Stu, so that's the setup. We're going to be right back and we're going to deep into this topic with some practitioners and some experts in the field. So stay right there, we'll be back with more on VMware World 2011.