 Welcome back to VMworld 2013. This is theCUBE, our flagship program where we go out to the events, extract the signal from the noise. I'm John Furrier, the founder of SiliconANG. I'm joined by co-host Dave Vellante of Wikibon.org. Hi, everybody. Praveen Akharajah was here. He's the CEO of VCE, a multi-time Cube guest. Praveen, welcome back. Yeah, pleasure to be here. Good to see you again. So yeah, this is a big show for you guys. I mean, it's the V and VCE, obviously. And you're seeing the VMware really sort of make its move from a position of strength. You're talking about 500,000 customers, to 20,000 plus people here at the event, so you got to feel really good about that. Absolutely. VMware is a critical technology partner for us. Key ingredient of the V blocks, obviously. We're partnering with them extensively. Actually, Pat highlighted some of our technologies in terms of VDI delivery, as well as the integration with the whole vCloud management suite that they announced. So, really excited to be here. The boot traffic's been just marvelous, getting a huge amount of interest. It mirrors, in a lot of ways, the traction we're seeing in the marketplace. Talk about the boot traffic a little bit. What are customers, I mean, this is, I remember, in 2009, you guys announced, people were like, what is this again? And then you guys really nailed that, smoothed out some of the rough spots and then really hard to market. What are customers saying at the booth? Are they saying, who are you? Are they saying, hey, I got another problem? Are you still in that sort of introductory phase? Where are we with that conversation? I think this year is really unique for us because we feel like converged infrastructures cross the chasm, if you will, to kind of use an industry term. We've seen customers now understand and get the fundamental concept of converged infrastructure and the benefits. So, they really want to poke underneath the covers and say, okay, well, how can I actually use converged infrastructure to deliver the results you probably see people walking around with the 5X and the 83X badges, which essentially denotes the results we've been able to deliver, 5X faster deployments, 83X faster high availability. So, they want to understand how can they actually achieve those results in their specific use cases. So, we actually have some of our customers at the booth who are sharing their stories in order for us to truly can explain what the value proposition truly is about. Yeah, that's important because you guys had to go through a kind of show me phase. First it was like, what is this? And then it says, you know, can three companies really work together and service me? And then, all right, but what can it do for me for real? You didn't have enough experience and now you've got those data points. Absolutely. I think we've got credibility now. We're on a billion dollar run rate, over 600 customers, three years of, I would say, scars on the back, right? Which have been very instrumental in shaping the direction where we're going. I think most importantly for us, customers want to have a relationship now with VCE. Not with Cisco, not with EMC, not with VMware, right? They believe and they understand what they can get from us. Both in terms of, you know, the amount of customer support we can give them, the technical expertise on things like, you know, how do you stand up an infrastructure as a service? How do you re-platform to X86? How do you, you know, optimize your infrastructure for an SAP HANA type deployment, right? So we're at the point where, you know, convergent infrastructure is accepted. We're at the next step of helping customers actually deliver, you know, their application use cases on top of convergent infrastructure. That's one of your priorities, obviously, is relatively new CEO, bringing that brand identity to VCE, and you guys may have made some announcements, I want to get into that, but where are you at as far as, you know, the company itself? I mean, what can you share? You mentioned a billion-dollar run rate, any details you can give on there, it'd be great by headcount, et cetera. Yeah, so, you know, we're at a billion-dollar run rate, we exited our last calendar year fiscal quarter at a billion-dollar run rate, so we're well on our target to achieving that. 600-plus customers, you know, growing pretty much, you know, we're almost adding about, you know, 100 customers, new customers, a quarter. And, you know, when we talk about customers, I think it's important to kind of qualify what we're talking about. These are Fortune 500 large enterprises in the energy, healthcare, education, financial sectors globally. Cross the board. Right, and, you know, we're expanding, we expanded to Japan, we expanded into Germany and the Nordics, so these have been new theaters that we went into this year massively successful for us in terms of penetration and the acceptance of our value proposition. You know, employee-wise, you know, we'll continue to grow, we're about 14,000, 1,400, how long was it? Wow, I missed something. 1,400-plus at this point, you know, continue to add, you know, technical talent engineers, you know, we're primarily hiring a lot of, you know, folks who have data center expertise or database or application expertise because, as I said, we're now transcended from just an infrastructure player to being able to actually help our customers deploy and utilize the benefits of convergent infrastructure with applications. Yeah, because you're not making the underlying products of the system. You're leveraging that in terms of integration with applications and, of course, you know, vision, your vision announcement as well. So, talk about that a little more. That's really where your engineering talent is going. Yeah, so one of the key things, as I came on board, that we're really focused on was innovation, right? Innovation is obviously, you know, the heartbeat of any, you know, technical company. And at the end of the day, we were fortunate enough to get, you know, the $20 billion investment that collectively Cisco, EMC, VMware put out there and offer that in our products. At the same time, I think what differentiates us is, you know, innovation, we're bringing to the table with vision intelligent operations software. You know, it's unique in the sense that it's the first sort of convergent infrastructure management software that truly allows you to manage a scaled VBlock deployment. A lot of our customers now have global footprints of VBlocks and they want to be able to see all of that in a single instance. And then we offer a REST-based APIs to plug into a vCenter or, you know, if the customer has a different management orchestration system, they can program to it. In addition to that, the other part of the innovation we think about is the services side. You know, we, you know, we have the fortunate, you know, I know trusted advisor is often misused term in the marketing parlance, but a lot of our customers truly look to us to give them recommendations on choices they make on management orchestration, right, on, you know, re-platforming a major core data center workload. We had a customer of ours in the Northwest, you know, they insourced their IT, put up a brand new data center in Minneapolis and the entire data center was built off of VBlocks and we helped them basically transition their environment from a, you know, traditional sort of, you know, well, I would say risk-based architecture to x86 over the weekend, right, without an outage. So those are the kind of things where we have built a set of innovation in the services side, set of tools, set of processes on which we're filing patents, which is going to continue to help us differentiate in the marketplace. I want to ask you about that innovation strategy. So what's the bumper sticker for the innovation strategy? Or the short version of the innovation strategy, high-level strategy for your innovation strategy. And two, you guys led the way on this, on the VBlock, it was really visionary at the time. And now everyone's kind of following. Which is obvious, it's natural evolution. And we just had io.com, George Lessman. They basically are talking about the data center, like the real data center, the one where the software will live in. So that's essentially going to be smaller and more efficient. So talk about the innovation strategy at a very high level, kind of like layman's terms. And then two, talk about what is really going on, the data center that you guys are engineering with VCE. Yeah, you know, I think if there's a tagline that drives our innovation, it's simplicity, right. You know, we did, we had a launch in February where we basically created the tagline, unleash simplicity. And if you think about the journey for VCE, our first entry into the market was essentially to say, hey, let's combine and break down the silos between compute network storage with virtualization to create a unique, converged infrastructure offer. So that was basically simplifying the infrastructure. With vision intelligent operations, we took the next step, which is essentially all about simplifying the operations off that infrastructure. And then we also launched this notion of specialized systems where we said, there's some certain key workloads like SAP HANA, like some of the data bases or some of the use cases like VDI, which customers are willing to buy as an appliance. So if we're able to create a specialized system, we can further accelerate the adoption of those technologies. Right, so today a customer can come to us and say, hey, I want a thousand VDI seat, you know, installation. We could just rack and roll that straight out of the factory. So it's up and running in 48 hours. So the IO guys are on the right trend. You're basically the same way. You're basically rolling in a turnkey solution. For high-end known use cases. That's really the big deal. Absolutely, right? So it's essentially, as I said, the underlying theme is simplification, right? Simplify the infrastructure, simplify operation, simplify application onboarding. So our unique signature in the data center is, the reality is, look, you have a lot of green fields and God bless their soul, they have a clean sheet of paper. They can start with the right technology in 2013 and go build from there. But the reality we face with a lot of our customers, particularly the Fortune 500, these are brown fields. They have lots of legacy infrastructure, you know, architectures that are built a certain way that cannot be flipped on a dime, right? So you have to be able to- So they've already been burned down, burned out fields? So we need to be able to go into those environments and be able to insert the new technology and provide a bridge to this notion of the next generation data center or be able to enable cloud. So I think that's where we truly excel. That's sort of the hard, heavy lifting happens there. Dave and I were talking yesterday, bridging to the legacy is a critical function. Absolutely. And what's your strategy on that specifically? Just the bridging? So how does that- How do you talk about that? It's a combination of two things. One is we simplify the way a technology can be ingested into the data center, right? So when we go in, we sit down with the customer and say, okay, look, what does your environment look like? What is the IP infrastructure? What does your storage overlay look like? We even co-op some of the existing storage as they're transitioning their workloads onto the storage that's incorporated into the Weblock. So we provide a lot of transition services and the capability that we bring in in addition to the product is really competent folks who have experiences with databases and application installations who can help the customer walk through that. So most times, customers want our engineers to stay back and help them not only train up to operating the Weblock, but also be able to get the best practices because you don't get the benefits of convergent infrastructure unless you're willing to also transition and evolve your processes and organizations. So Praveen is also bridging to the future. There are people talking about future proof. You said earlier, you talked about, God forbid somebody wants to use a different orchestration layer than VMware, but it's going to happen. Are you doing anything specifically outside of what Pat talked about yesterday to incorporate some of those other trends, things like OpenStack and other open platforms? So I think we're a very customer use case driven, right? So when a specific use case comes in front of us, we're looking at classic case for us is we have a private cloud based on VMware and you have a customer that has certain workloads in a public cloud, whether it's Azure or AWS and how do you create a bridge between those two, right? How do you ensure that this data flow that's happening or backup and recovery ability to burst, right? So those are the kind of areas we focus on in terms of creating that bridge between existing infrastructure and what's out there in the public cloud. Okay, so let's talk milestones for a minute. So we've heard the billion dollar run rate, so we're waiting for Joe to say, yep, hit a billion. Yeah. That's friendly. It's been a billion dollar run rate. What other milestones should we be watching? What are the things that observers should be focused on as indicators of progress for you guys? Yeah, I think continued evolution of our innovation roadmap. So we're going to continue to focus on delivering new exciting capabilities, whether it's on the platform side, whether it's on our software management capabilities. So I think that's a key metric. The other area I would really watch is the evolution of our services capabilities. So we're going to launch some new capabilities, hopefully in the next month or so. I don't want to let the cat out of the bag here and get in trouble with my marketing people, but the evolution of how we're helping our customers adopt the technology. So there's a set of services suites we're going to be launching. You know, numbers are a good way to keep track of things, right? So I want to be a little careful here. So Joe and John don't pick up on this and set me a new bar. Yeah. But I know that's coming, right? You know, we're well ahead of all our target goals. You know, as a private company, not free to share the specific numbers, but Joe and John both quoted about 50% growth rate. If you look at the market, it's growing anywhere from 30 to 35%. So we're growing well north of what industry analysts predict the convergent infrastructure space to be growing. And, you know, analyst reports have continued to reaffirm our leadership position. So, you know, our ability to continue to maintain that and deliver a great customer experience is kind of how we metric ourselves. Awesome. Okay, Praveen. Thanks for coming inside theCUBE. Really appreciate it. Great to see you. Thank you. Leader of VCE. Really ahead of the market at many levels. We've been following you for our fourth year following VCE. Congratulations. Everyone's catching up with the messaging, conversion infrastructure was once to now. That's what everyone wants. So congratulations. It's theCUBE. We'll be right back with our next guest after the short break day two of three days of VMworld 28 Live coverage from San Francisco, Moscone South Lobby. It's theCUBE. We'll be right back.