 Live from Las Vegas, it's theCUBE. Covering VMworld 2017, brought to you by VMware and it's ecosystem partner. Hello everyone, welcome back to live coverage. This is theCUBE at VMworld 2017, our eighth year covering VMworld, going back to 2010. I'm John Furrier, co-host of theCUBE, and my co-host is the segment, Justin Warren, industry analyst, and our guest, Alan Cohen, chief commercial officer, COO for Lumio. Great to see you, CUBE alumni, special guest appearance, guest analyst appearance, but also chief commercial officer at Lumio. Security startup growing, thanks for coming over. I haven't a startup anymore. It's technically a startup. Well wait, after five years it's not a startup. Yeah, a startup, right? You raised $270 million, not exactly a startup. That's true. Well welcome back. Thank you. So welcome back from vacation. Justin and I were talking before you came on. Look it, let's go to get you on and get some commentary going. Okay, you're an industry vet. Okay, again, security, some perspective, but industry perspective, you've seen this VM wear cycle many times. What's your analysis right now? Obviously stocks 107, they don't do a cloud, no big cat-back, so okay, good. Right. Made a decision. What's your take on this? Well, you know, I've been coming to VMworld for a long time, as you guys have as well, and from my perspective, this was probably the biggest or most significant transition in the history of the company. So if you think about the level of dialogue, obviously there's a lot about NSX, which came from the Sarah, I'm always happy about. But if you hear about talking about cloud and kind of talking about a post-infrastructure world, about capabilities, about control, about security, about being able to manage your compute in multiple environments, this is, I think, the beginning of a fundamentally different era, right? So if, I always think about VMware, this is the company that defined virtualization, right? No one will argue with that point. So when they come out and they start talking about how your compute's going to operate in multiple environments and how you're going to put that together, this is not cloud washing, right? This is fairly, all right, they have fully acknowledged that the cloud's not a fad, the cloud's not for third-tier workloads, like this is mainstream computing. So I think this is the third wave of computing and VMware started to put its markers down for the type of role that it tends to play in this transition. Yeah, I agree, I think that the- We have to argue if you're going to agree. Oh, okay, I'll mostly agree with you, how about that? All right, that's good. Yeah, I agree, this is, at this show, VMware stopped apologizing for existing. I think previously they've been trying to say, no, no, we're a cloud too, we're acting in fact, we're better than cloud and you shouldn't be using it and it forced customers to choose between two of their children, really. They're like, which one do you love more? And customers don't like that. Whereas at this show, I think it's finally VMWare's recognize that customers want to be able to use cloud as well as use VMWare so that they're taking a more partnership approach to that and it's more about the ecosystem. And I agree, they're not about the infrastructure so much, they're not about the hypervisor, they're about what you run on top of that. But I still think there's a lot of infrastructure in that because VMWare is fundamentally an infrastructure happening. You've got to get paid, right? Yeah. That's right, and there's a lot of stuff out there that's already on VMWare. So what do you think about the approach of, like with cloud, they have a lot of people doing things in new ways. And you mentioned that this is a third way of computing that we're doing it a new way. A lot of the VMWare stuff is really the whole reason it was popular is that we had people doing things in a particular way on physical hardware and then they kept doing more or less the same thing only on virtual hardware. What do you see about people who are still essentially going to be doing virtual hardware? They're just running it on cloud now. That's not really changing. Well, I mean, so the way I think about it is, are you going to be the Chevy Volt? Are you going to be a Tesla? And what I mean by that, and by the way, now GM has the Bolt, which is their move towards Tesla, which is that if you look at the auto industry, they talk about hybrid. And you talk about it, and you talk to Elon Musk, he goes, hybrids are bullshit, right? Right, you're burning gas or you're using electricity. And to me, this cloud movement is about electricity, which is I'm going to use cloud-native controls. I'm going to use cloud-native services. I'm going to be using Python and Ruby, and I'm going to have scripting, and I'm going to act like DevOps. And so the cloud is not just a physical place where I rent cycles from Amazon or Azure. It is a way of computing that's kind of distributed, dynamic, heterogeneous, and hybrid. So when you're in your virtualization on top of cloud, you're still in your Chevy Volt moment. But when you say, I'm going to actually be native across all of these environments, then you're really moving into your Tesla moment. Hold on, let me smoke a little bit. I'll pass it over to you because that's complete fantasy. I mean, right now, the reality is that... It's legal here in LA, in Las Vegas. I don't think so, is it? Oh, okay, anyway. You go to the Walgreens across the street, yeah. Whatever you're smoking is good stuff. No, I agree, cloud, obviously, as a future scenario. There's no debate, but the reality is like the Volt, Tesla's one-trick pony. So, you know, Greenfield... Well, no, but once again, I'm not disagreeing with you, John, but my point is that VMware, and most of the IT industry is not there. Most companies don't have DevOps people. You run up and down, you go to all of these shows, ask how many of these guys, how many guys do Ruby, Python, real scripting, they don't do that, right? They still have... Well, I ask them. UIs and management consoles, and they have the old IT, but this is the beginning movement. Yeah, legacy baggage. I mean, we call it legacy baggage in the business. We know what that is. Yeah, heritage systems. Well, Gelsing was here, I held him in my one o'clock, and I kind of like, sometimes VMware, they make the technical mistake in PR. They don't really kind of get sometimes where to position things, but the Google announcement was very strategic intent. But they kind of made it a land grab, and they try to overplay their hand, in my opinion, on that one thing. It's a strategic intent. This audience, they're not DevOps ready. They're ops trying to do dev. Yeah, they're not truly ready. So, it's okay to say, here's Amazon. Great, that's today. If you want to do that, it's getting going, checking the boxes, we're hitting the milestones, and then to dump a headroom deal announcement, that's more headroom. Which is cool, but not. But here's the opportunity and here's the risk, right? If Amazon is a $16 billion a year business, it's a rounding error an IT spent. Yeah. Right, when you take the hype away. I'm nothing against it, and I love that prices are cheaper in Amazon, and you could buy a dot in the fruit aisle. Like that, it totally would. Margin's are like 60%. Yeah, and it's just like, my wife took a picture of a rib steak, and it said $18 now, $13.99. I said, fantastic, thank you Jeff Bezos. We're eating well, and we're going to have a little extra money. But what I think that this transition is not about infrastructure, it's about how IT people do their job. Right? That's a great point. That is a big, big change. I stumbled into it. But okay, in this show today, doing your job, Justin, I want you to comment on this because you were talking with Stu about it. Yeah. I'm a VMware customer. What do I care about right now in my world? Just today. Well, in my world, I've got conflicting things. I need to get my job done now. It's not, there's nothing different about the IT job, really, which is a shame because some of it needs to change. But there is a gradual realization that it's not about IT. It's not about building infrastructure for the sake of because I like shiny infrastructure. It's I'm being paid by my business to do IT things in service of the business. I have customers who are buying apples or, you know, using apples. You're laundry. In IT, you're paid for an outcome. Yeah. You don't create the outcome. Right, this is the way, the way IT works is business creates the outcome, IT helps fulfill the outcome. Yeah. Right? Unless you work at a digital. Is IT a department today? Or is it not a department? Yeah, it's still a department. It's still a department? It is. But it's a department in the same way that, well, finance is important, but it's not actually the business. You know, sales is part of, they're all integrated, like in a really well-run business. Do you know what a real business is? You go to a building, you go to the main offices, you visit the marketing floor, you visit the IT floor, tell me what the decor is like. They'll tell you what they care about in a business. Right, I've been in a lot of IT shops, not the beautiful shiny glass windows in because it's perceived as a back office. Cost center. Cost center, yes. But the thing that, look, the thing that we're- Digital transformation is always about taking costs out. That's table stakes. But now, some of the tech vendors need to understand that as you get more business focused, you got to start thinking about driving top line. Well, but you're awesome. You have to think about being in the product, right? So for example, my company, we have three of the four top SaaS vendors as Illumio customers. We do the micro segmentation for them. We're not there micro segmentation. We're a component in the software. They sell you guys. Yeah. And- You're an input. Yeah. You are a commodity in the mix of what somebody's building and I think that's going to be one of the changes. So the move to cloud, it's not rent or buy. It's not per hour per server or call Michael Dell and send me a bunch of Q series or whatever the heck it's called. It's increasingly saying, we have these outcomes. We have these dates. We have these deliverables. What am I doing to support that and be part of that? And- And that's it. It's a support function. It's a very important support function but there's very few businesses. Digital transformation, I don't like that as a term. What the heck does that mean? It doesn't mean, it means something to do with fingers. You use a lot. What does it really mean? Digital transformation. I mean, I think to me, I mean, first of all, I'm not a big hype person. I like the buzzword in the sense that it does have a relevance now in terms of doing business digitally means you're completely 100% technology enabled in your business. That means IT is a power function, not a cost center. It's completely native, like electricity in the company. Unless- So look, so here's the- So let's say I have two customers. I have the Yellow Cab company of Las Vegas and I have Uber or Lyft as a customer. My role as a technologist or a technology provider is dramatically different. What I do- Digital transformation to me is a mindset of things like, I'm going to do blockchain. I'm going to start changing the game. I'm going to use technology to change the value equation for my customer. That's not an IT conversation. Let's buy more servers to make something happen for the guy who had a request in there saying, let's use technology digitally to change the outcomes. So given that, if we assume that that's true, then there's two ways of doing that. Either we have the IT people need to learn more about business or the business people need to learn more about IT. So which one do you think should happen? Because traditionally- I think they're both on the collision course. I mean I see- I don't think you can survive as a senior executive in most businesses anymore by saying, oh, I'll get my CIO in here. I would like to believe that that's true, but when people say that it should be a strategic resource and so on, and yet we spend decades outsourcing IT to someone else. So if it's really truly important to your business, why aren't you doing it yourself? Justin, it's a great question. Now here's my observations, just thinking out loud here. One, just from a Silicon Valley perspective, looking at entrepreneurial as a kind of a canary in the coal mine, you've seen over the past 10, 15 years, recently past 10, entrepreneurs have become developer entrepreneurs, product entrepreneurs have become very savvy on the business side. That's the programmer when we've seen Travis with Uber, okay? No VC, they got smart. Because they can educate themselves. Angel, let's venture hacks. There's a lot of data out there. So I see some signs of developers specifically building apps because user design is really important. They're leaning into what I call the street MBA. They're not actually getting an MBA. They don't read the Wall Street Journal, but they're learning about some business concepts that they have to understand to program. IT, I think it's still like getting there, but not as much as the developers on the dev-out side. Here's a great question that I've learned over the years. When I, and look, I'm coming out of the IT side as we all are, when I visit a customer and I try to sell them my product, my first question is if I didn't exist, what would you do? Yeah. And if you don't buy my product, what happens in your business? And if they're saying, well, I have this other alternative, or it's like, yeah, we'll do it next year. I mean, maybe I can sell them some product, but what they're really telling me is like, I don't matter. Yeah. All right, let's change the conversation a little bit. Just move to another direction. I want to get your thoughts on it. I should have on the intro, gov'n you more props now. And you were also involved in Nassirah, the startup that VMware had bought. You handled this NSX stuff? I was early. Hold on, let me finish the intro. We've interviewed Martín Casada. Stu talks to us all the time. I'm sure Justin's been hearing on the other side. Oh, I interviewed Martín Casada. He's a great interviewer, of course, and he's been here on theCUBE directory. But you were there when it was just developing, and then boom, software-defined networking. It was going to save the world. But NSX has become very important to VMware. What's your thoughts on that? What is the alumni from Nassirah and the folks that are still here and outside of VMware think about what it's turned into? Is it relevant, and where is it going? Well, I mean, look, I mean, I think what it's, look, I could have not predicted five years ago when Nassirah was acquired by VMware. It would be the heart of everything their CEO and their team is talking about. If you want to know if that's important, go to the directory of sessions and one out of every three are about NSX. But I think what they're, what it really means is there's a recognition that the network component, which is what really NSX represents, is the part that's going to allow them to transcend the traditional software-defined data center. So I have two connections. So Steve Herrod's my investor, right? Steve is the inventor of the software-defined data center, right? That was the old Kool-Aid, not the new Kool-Aid. And we've left the software-defined data center, right? We've moved into this cloud area. And for them, NSX is their driving force on being able to extend the VMware control plane into environments they used to never plan before. That's eminently clear. Justin, what's your take on NSX? NSX is the compatibility mechanism for being able to do VMware in multiple places. So I think it's very, very important for VMware as a company. I don't think it's the only solution to that particular problem of being able to have networks that move around. It's possible to do it in other ways. And for example, cloud native type things will do the networking thing in a different way. But the network hasn't really undergone the same kind of change that happened in server or indeed in storage. It's been pretty much the same for a long, long time. Well, I mean, you've had an industry structurally dominated by one company. Yeah. Things don't change with you. All right, security. It still is, yeah. Security, because we got a little bit of time I want to get security. You guys are in the security space. Thanks for noticing. Steve Herrod. Steve Herrod. I still don't know what you did. I'm only kidding. Steve Herrod's your investor. Former CTOBM. We're very relevant for folks watching. Guys, security. Pat Gelsinger said years ago, it should be a do-over. We got to fix this. Nothing's really happened. What is the state of the union, if you will, of security? Where the frick is it going? I mean, what the hell's going on with security? Well, there's two issues. So if we put our industry analysts hat on, security is the largest segment of IT where nobody owns 5% market share. So there's no gorilla force that can drive that, right? VMware was the gorilla force driving virtualization. Cisco drove networking. EMC in the early days drove storage. But when you get the security, you have this kind of... Deluded. It's like the Balkans, right? You know, it's like feudal states. It's a ghastly nightmare. But what I think what Pat was talking about, which we also subscribe to, there are some movements in security, which micro segmentation is one of them, which are kind of reinstalling a form of forensic hygiene into saying there are practices if they occur, they will reduce the risk profile. But I think 50% of security solutions in categories exist today. So I've lost my teeth, I don't get cavities, that kind of thing going on. Well, look, I, you know, like if you're a doctor and you're making rounds in the hospital, you wash your hands or you put on gloves. And that's where we are. That's the stage we are at with security is we're at the stage where surgeons didn't believe they should wash their hands because they knew better. And they say, no, this couldn't possibly be making patients sick. People have finally realized that people get sick and you know that the germ theory is real and we should wash our hands. Your network makes you sick. Yeah. Your network is the carrier of the... Everything that's happening in network is effectively the typhoid Mary of security, right? We're building flat, fast, unsegmented, layer three networks, right? Which allow viruses to move at the speed of light across your environment. So movements like aptive, what do they call it? App defense? App defense, yeah. App defense or micro segmentation from aluminum and VMware are the kind of new hygiene and new practices that are going to reduce the widespread disease. From an evolution theory, then the genetics of networks are effed up. If this is what you're saying, we need to fix some of that. No, and the networks are getting back to what they were supposed to do. Networks move packets from point A to point T. Yes. The dumb are the better. Okay. Dumb networks. Dumb them down. Dumb networks, smart endpoints. Well, smart networks doesn't scale as well as smart endpoints. And we're seeing that with edge computing, for example. There's just network at that, like distributed networking is a hard problem. And there is so much compute going out there. I mean, everything has a computer in it. They're just getting tinier and tinier. If we rely on the network to secure all of that, we're doomed. Better off in the end point. Great. And this fuels the whole IoT edge thing. IoT. Straight up one of the key wave slides up there. Well, what you're going to have is a lot of telemetry points and you're going to have a lot of enforcement points. Our architecture is compatible with this. VMware is moving in this direction. Other people are. But the people that are clinging to the gum up my network with all kinds of crap. Because actually people want it to go the other way. I mean, if you think about it, the internet was built to move packets from point A to point B in case of a nuclear war, right? And there wasn't a whole lot of, other than routing, there wasn't a whole lot of. You still might have that problem. Yeah, well there's always that. It's fingers crossed. Fingers crossed. Guys, we got a break next segment. Alan, quick, I'll give you the last word. Just give a quick plug to Lumio. Thanks for coming on and being special guest analysts as usual. Thank you. Great stuff. A little slow from vacation. Usually a little snappier. Slow off the mark. Back in Italy. Too much Brutella de Montalcino, yeah. Quick plug for Lumio, do a quick plug. So we're really great to be here. So I mean, John, you and I talked recently. Lumio is growing very rapidly. Clearly we are probably emerging as one of the leaders in this micro segmentation movement. I want to be gorilla. What's that? You're a want to be gorilla, go big or go home. We are, well, you know, gorillas have to start as little gorillas first, right? We're not a want to be gorilla. We're just a gorilla is growing really rapidly. It takes a lot more, you know, takes a lot more food at the zoo to keep us going. About 200 people growing rapidly, just moving into Asia pack. We got a guy in your part of the world. First of all, it's not a zoo, it's still a jungle. The zoo is not yet established. That's true. Well, we're going to establish the zoo. So things are, things are greater Lumio. We have amazing things on the floor here today of and basically the system will actually write its own security policy for you. It's a lot of movement into machine learning, a lot of good stuff. All right, guys, thanks so much. Alan Cohen for the Lumio. Thank you. Chief Commercial Officer Justin Warren Analyst. I'm John Furrier. More live coverage from VMworld after this short break.