 from Las Vegas, it's theCUBE. Covering VMworld 2018. Brought to you by VMware and its ecosystem partners. Hey, welcome back to Las Vegas. Mandalay Bay, Lisa Martin with Dave Vellante at VMworld 2018, day one. Dave, this has been an awesome day. Yeah, jam packed and almost one third of the way through. 94 guests, I think our biggest show ever. I think I'm going to say I'm going to make a board and say it's going to get awesomer because we have one of our distinguished alumni, Vaughn Stewart, VP of Technology Alliances and Strategy at Pure Storage. Vaughn, great to have you here. Lisa Dave, thanks for having us back. Great to see you again. Yes, ditto. We had a blast hosting theCUBE at Pure Accelerate just a couple months ago. We got t-shirts. We're sporting our, yeah, in the context of the Bill Graham Civic. We, I feel too dressed up actually for talking to Pure Storage. So some great momentum that you guys had when we were there a few months ago. Great momentum continues. Quarterly revenue earnings just announced 37% year over year growth. Almost 400 new customers. Gartner, fifth year in a row. You guys are a leader in the Magic Quadric for Solid State Arrays. Wow. Yeah, a lot was shared last week with the financial results, right? Couple more just points of color commentary, if you will. 309 million dollars, you know, 27% new quarter over quarter. 35% penetration of the Fortune 500. Roughly 30% of the revenue comes from the cloud providers, say like clouds number eight through 500. On the Magic Quadrant, right? Five years in a row being in that upper right quarter, a quadrant. And if you look back at it historically, just the players that have come and gone and their positions have changed and we've kind of been the foundational element in that corner, I think speaks to what we've been able to bring to market. On top of all that, right? Pure Storage's first acquisition, right? Store reduce. So for those of you who may haven't, maybe haven't heard of store reduce startup, their focus is on providing data de-duplication across the object stores, born in the cloud, pure software play. I think we're going to continue to leverage that with in its current focus and market area as well as expand our, as part of our cloud strategy. And even maybe bring some of it into the current on-prem product portfolio. Lots of opportunities available to us with that IP. So, you know, when you look back at the sort of, well, first of all, flash, you know, solid state, upper right, but there's life beyond flash arrays, right? And so if you look at some of the early guys, you remember S-Tech, if that's even how you say it, S-Tech, whatever, they were hot company, Fusion and people, a lot of people predicted, oh, you know, same thing, everybody's going to catch up to pure, but you guys kept innovating, cloud is now a flywheel for you guys. You really, I mean, went hard after it. So I wonder if you could talk about the evolution of sort of phases as you guys see them of the company. Yeah, yeah, so for your audience, I think one way to look at this with a startup is when your founders have an idea of bringing a product to market, you have to be very laser focused, which means there's trade-offs, right? There's a lot of things that you can't do so that you can bring your technology to bear, your product, you've got to be able to gain market share, customers' revenues kind of like the lifeblood early on. And we've evolved past that, right? There's been the passing of the torch last year with a change in CEO from Scott, who moved on to be chairman of the board, bringing in Charlie, and I think we're really at this phase of the beginning of what I'd call Act Two. Along the way, flash array, which is our flagship and our initial product, has helped customers adopt technologies through different business models, right? The evergreen storage play, us introducing non-volta memory, expressing to all of our products, you know, half of our customer shipments in Q2 were all NVMe, right? So allowing customers to adopt technologies in new models that they didn't have before that aren't ripping replacements has been a key to our success beyond the tech. Flash blades often up and running in net new areas of business opportunities for us, like AI and ML. And now you get store reduced, right? This cloud component. I would say that the legacy of Pure, that Act One that Scott built, is going to continue to run for the next couple of years kind of on autopilot, and that's not to be dismissive of the field that's got to go out there and execute every day, every quarter, but Charlie's vision about what we're going to evolve into, I mean, really, if you used a baseball analogy because someone was talking socks before the cameras went on. Who could that have been? Yeah, yeah. You know, we're in the beginning of the first inning, you know, store reduces just, I think the tip of what we're going to do. We got 1.1 billion in the bank. You know, we've got a little bit of capital to continue to invest in the portfolio. So right now the focus is on still, I think there's two ways to look at this. There's what I find most enterprise customers want to talk about is how do I merge three modern technologies, right? All flash, hyper-converged in cloud. Give me a strategy that unifies them, not one that divides. And we can have a whole conversation around that. Then there's this whole other segment around analytics and AI, which you heard it here in the keynote this morning with Pat, right? Focus area, you know, for VMware, you know, AI is the modern version of what analytics were six years ago. And so this is something that I don't think all the practitioners here are aware of. It comes from a data science or the application side into the infrastructure. And right, we're trying to help people make a turnkey, you know, AI-ready infrastructure, you know, through the RE product with Nvidia. So there's just a lot to talk about. Where do you want to take the conversation? And you can see those worlds coming together with, you know, take cloud, take AI, take data, which is what you're all about. That's kind of the innovation sandwich of the next 10 years. It ain't Moore's law anymore, right? It's AI applying machine intelligence to the data and scaling it cloud. You know, one of the things that SiliconANGLE, I think may have been, at least the largest analyst firm that I saw jump on this early, was around the notion of bringing your data to the infrastructure, right? And you guys pushed in, you guys leaned in really hard about three or four years ago on that the world is a hybrid model. It's not one or the other, it's all hybrid. And you even talked about the differences in the type of data sets and its computational requirements and where it may or may not be placed, as well as you really leaned in on the inter-op requirements across the different silos. And so kudos to your research. Yeah, thank you, and we've quantified that. It's actually, you know, that whole idea of bringing the compute to the data, for example, wherever it resides. I mean, that's a big, big business. I mean, if you look at the size of the market of those folks trying to replicate substantially cloud on-prem, it's $30 billion business and growing very, very rapidly. And you guys play in both sides of that. I mean, that's what's impressive. You're not just on-prem, you're not just, you know, in cloud, you're hybrid. Yeah, so here's a good example of how cloud evolves. We're really proud of our net promoter score, right? It's 86.6, top 1% of B2B businesses, right? I look at external points of validation, whether it's a net promoter score, or what an analyst firm ranks you at in their Magic Quadrant, or others, as are you delivering to your customers your promise to them, right, in your marketing material? Part of why our score is so high is the product's reliability's there, right, and it delivers. Underpinning that is we've got a predictive analytics technology that helps the arrays achieve greater than six nines availability, right? That component, that's pure one, that was born in the cloud. That was born in AWS. And we talked about this in a session at our Accelerate conference, which is, we've got greater than nine petabytes up there. Every time we do a new, we're working on a new algorithm for AI to make our product better for our customers, we have to download a year's worth of historical data. It takes 45 days to download and stage. So we're moving it to a hybrid model. And what's it going to allow us to do? It's instantly going to help us reduce our cost and accelerate our AI initiatives by six X, right? And it's just a bridging of the technologies. Regardless of what you have, you have an all flash array, you're a cloud provider, you're hyper-converged. Sometimes your product teams look at the world with like, I got a hammer and that's a nail. And what really provides sophisticated outcomes is when you can bridge the technologies based on results. So speaking of marketing messaging, some people, some companies like to say they're data-driven or they will enable their customers to become data-driven. At Accelerate a few months ago, Pure Storage talked about data-centric architecture. Now we all hear data is the lifeblood, data is power, data is currency. It's none of those things unless an organization can harness it and extract the insights and act on them immediately. Talk to us about the data-centric architecture. What is that? How have you seen that, we'll say, accelerate momentum in the last few months? Great question, so thank you for bringing that up. I think on the surface, one may look at a data-centric architecture message as being, oh, that's what you would expect from a storage vendor to say, right? Sounds like something that aligns to your products. And I think there was some inside baseball being shared, if you will, in that message, right? There was some telegraphing going on. Because at the core of the message, what we're trying to say is your traditional applications tend to be more stove-hyped and siloed, right? What you see, and I'll take this through two levels, what you see with taking traditional applications or legacy apps and you virtualize them, and now you want this mobility where you can move the application around anywhere, you know, all flash, on-prem or into the cloud, that's one form of movement. Modern applications are distributed, right? They're a collection of processes, different data sets, and the application's much more like a pipeline. And so when you look at data from a view of pipeline, you have to stop thinking about your silo that's wrapped around your one tool that you as a developer may have a responsibility for in the product or the code. You got boxed as well, right? You've got to figure out how does it work in a pipeline with others? How are you going to ingest data and hand off data? So in a data-centric architecture, we're trying to advocate that there's a value in shared architectures. And in addition to this, there's been this whole market that's grown up over the last decade around, initially around analytics, where their architectures were designed around DAZ architectures. And you have to look back a little bit to get an understanding of where we are today, which was, you go back 10 or 12 years ago, it was really easy with the power of Intel to bury a disk-based storage array, no matter what size it was and which vendor put it out. You could saturate the IO bandwidth. Now we're at a day in age today, shared accelerated storage, fast network interconnects with non-valid memory expressed over fabric, whether we're talking ethernet or fiber channel. I now have the latency that's within 10 microseconds of direct attach storage. I get all the benefits of shared and I get some new architectural models that may help me with costs and efficiencies. And so you're starting to see vendors in the software space, follow-in suit. And so for example, you've got Vertica releasing support for S3 on-prem, right? You've got VMware, right? Adding more fuel around Vvols and interoperability between Vvols, VSAN and VM cloud. There's more partners that have more activity going on that I can't share because I don't, you know, they've got announcements coming through the second half of the year, Cloudera just published in July, a new paper around HDFS on remote storage regardless of the protocol, right? So you're seeing all these DAZ-centric vendors start to say, all right, our customer base is telling us they need a shared model. So shared accelerated flash, NVMe, NVMe over fabric. It's going to fuel new architectures that are more flexible. So I want to follow up on that because you're right, the data pipeline is elongating and it's getting quite complex. I mean, if you're an AWS customer, which we are actually, if you use Kinesis, DynamoDB, EC2, S3, you know, Redshift, et cetera, those are all sort of different proprietary APIs. Sometimes you don't know what you should do where until after you get the bill. Can you help solve that problem for customers and simplify that or are you just a piece of that chain? So we have a component within the chain that we're working with our field and our field technologists to help advise customers, particularly around what I'd call like a cloud first strategy. So if we look outside of storage and you're looking in the cloud developers and this function as a service, for example, right? And so we use our own case study, right? Pure one, we got hooked into function as a service within our provider. And what we found was our ability to use multiple clouds, our ability to go hybrid cloud and our ability to actually take our analytics and be able to package it up and deliver it to dark site customers that there's about a third of our customers that won't allow for their units to phone home, okay? Three letter acronyms, right? That rather than the federal space. Cloud first meant that we just take that function as a service and instead of making the direct API call, put it in a container. Now once your container rise, I can run it on any cloud, right? And now again, cross public cloud, hybrid into private and it gives you a lot of flexibility. So we're working on architectures and educational conversations, not just about the data pipeline and how your data has to transform as it goes through these different phases, but also at the higher level, really going to be leaning in on containerization and so the customers can have greater mobility. And again, we'll use our own use case and evolution of pure one as I think part of the front center message there. Look to get your perspectives kind of changed the topic on the just ecosystem evolution. Yeah, you've observed the VMware ecosystem. You remember well, I mean, it's just strange that EMC ended up with this asset, right? It was kind of unnatural and all of a sudden boom, it explodes and you had this storage company, somewhat controlling, you had the storage cartel, kind of which VMware wanted to play Kate. So that was good, that sort of was a bulwark against EMC having too much control. Now you see Dell's ownership, you see the AWS relationship as an ecosystem partner who's now reached escape velocity and beyond. What do you make of all this? Oh yeah. I think you have to look across Pat's time and before Pat to Diane, right? Diane made it clear, right? When there was acquisitions in play for VMware, right? She said, we'll never be owned by a server vendor, right? And so storage vendor acquires EMC and for all the blustering of EMC control, there was never anything that was proprietary towards EMC with VMware, right? The focus was on the entire partner ecosystem. That's a good bet, right? Let the hardware vendors go battle out for who's got best in class, just deliver the VMware software to the market, right? Allow VMware to go innovate on a different timeframe than the storage layer. Now that Dell is in the ownership seat, you have the same message from Pat, right? When he sits down with Charlie, it's like, look, we're going to be independent, we're going to be agnostic, we're going to take you as a partner to help us build frameworks. So for example, we're like, we're one of the lead design partners on NVMeover Fabric, we're doing tech, we're doing technology previews with vSphere in the booth. You know, we're the fastest growing VVol's partner. So I'm not making plugs here, but I don't think anything's changed, right? I think VMware's business model's been brilliant to not become tied to any hardware partner and focus on what you do better than anyone else, which has been delivering virtualization. And what I really like about this show, and tell me if you think so, right? AWS was shared last year, right? Containers have been shared at this show for about four years. This year it was a focus, right? It was AWS, it was containers, it was automate everything, and then inherently bring security as an inherent component of the products, right? These are really bold, strong investments that they've made that are new, right? So you see the evolution of VMware and we're partnering with them in a number of these initiatives and there's nothing to share now. That'll be, you know, next year. Well, and you're right, Vaughn, the picture's getting clearer. I thought Pat's keynote was very good this year and crisper and more cogent relative to the strategy than last year and previous years. It's really starting to come together. Now what about the AWS piece? Because that's also a company with whom you have a relationship. So does the VMware AWS partnership, is that a tailwind for you guys? Or is it, hey, we're trying to get an attention of AWS too? Yeah, so I would say our, so we signed a formal VMware Alliance relationship this year and I would say it's progressing well. What we can share with the market right now is minuscule to what we'll be sharing, say later in the year, beginning of next year. But you know, right now where we're at is, so we're a direct connect partner, gold level sponsor for their conference, right? Re-invent. With VMware and AWS and Pure as a three-way alliance and partnership, VM Cloud, VMC is going to add support for iSCSI, that's a second half of the year initiative or fourth quarter initiative and we'll be there as a lead development partner supporting that framework when it comes online. It's going to open a lot more flexibility for us and our joint customers about adopting either your own on-prem hardware or running it on the Amazon hardware and you know, make it fit your business model, whichever way you want to roll, but make it fully interoperable and move the data and the compute instances seamlessly and non-disruptively. Guys, I wish we had more time. I'm hearing accelerated momentum and maybe some teasers, the fondant. Maybe the cube needs to be, yeah, we'll stay in touch. We'll get some more interviews, yeah. Bon, thanks so much for joining Dave and me and sharing all this exciting news that's going on like I said, accelerated momentum, fun intended by the way. Thank you, thanks guys, great to see you. We want to thank you for watching theCUBE for Dave Vellante, I'm Lisa Martin with theCUBE at VMworld day one from Las Vegas, tick around, we'll be right back. Hi, I'm John Walls, I've been with theCUBE for a couple years.