 Hello everyone, welcome to theCUBE's live coverage here in San Francisco, California, for VMware Explore, not VMworld. It's VMware Explore, I'm John Furrier, host of theCUBE with Dave Vellante. We're here with two sets. 12th year Dave covering VMworld now, VMware Explore. What a journey, I had a little reminiscing from Paul Moritz in 2010 who predicted the future, but the timing was off. Ragu predicting the future, but is his timing right with multi-cloud or super cloud? We're going to get into it. We've got three days of wall-to-wall cube coverage, two sets, all the top execs from VMware coming on, including the CEO Ragu himself, Vittorio, Kit Colbert, the whole kit and caboodle of the executive group to talk about the future of VMware, where it's going, and of course, the appearance of Haktan here from Broadcom, Dave made an appearance, Michael Dell was also in presence. I get the vibe that there's something going on with Broadcom and VMware beyond just the acquisition. So a lot of people are curious. This event, again, is notable and historic from the sense of it's VMware Explore, not VMworld, so they changed the name and Broadcom's intent and they're going to be buying VMworld. Dave, the keynote was anticipated by all. How it was going to go down, what was going to be said. Ragu set the table, I got a ton of notes. I know you do. What's your take? Well, you have to start with the Broadcom acquisition. You're right. In the audience, he stood up. He got a little clap. Dolph clap. He's paying $60 billion for VMware. He better be able to be recognized. And he was here yesterday with Michael Dell at the executive sessions. And their purpose, I'm sure, I mean, it didn't let us in, but I'm sure the purpose was to make sure that customers were calm. They were comfortable with the direction. Of course, the narrative coming out of VMware is that, hey, they're investigating, they're going deep into our portfolio and they like what they see. It's going to be all good. It's not going to be like the CA acquisition and de-levering and all that stuff. I mean, I still stand by what I wrote in my breaking analysis back in May. The fact is Broadcom has promised $8.5 billion in EBITDA within three years. That's the only way they get there is to cut. So that's going to happen. But the interesting dynamic in the market, I don't know if you've noticed this, VMware stock is trading at a 20% discount to what Broadcom is paying for it. Okay, so there's a big amount of fluff if you want to, you know, do some arbitration. But, and I think it's a due to the fact that it's a stock and a cash deal. You know, it's a combination deal and it's not going to close for a year. So there's maybe some skepticism around that. But that was an interesting dynamic. The keynote will get into it, but it's all around multi-cloud and what we call super cloud. Yeah, I mean, I have my conspiracy theories on Broadcom. You make chips, you look at all the waves right now in the technology industry. Silicon is hot. Anyone who's doing custom silicon and putting software on the chip, making purpose-built, you know, vertical applications, has seen performance gains, you know, in cloud and in these applications. So one, I'm really excited by the dots connecting with there. But also the VMware story, Dave, is pretty interesting in the sense that timing's everything, the Broadcom acquisition, EBITDA focus might drive behavior. But notable for VMware is Raghu has been on this vision for years. I remember in 2016 when I interviewed him with Andy Jassi, who was then the CEO of AWS, they had moved everything to Amazon Web Services. And that was the beginning of the vision of multi-cloud and cloud-native. VMware invested a ton. And so we're seeing some fruit come off the tree, if you will, bearing some fruit from that VMware investment in cloud-native across the board, which was their bet prior to Broadcom buying them out. So the question is, does Broadcom harvest that continue that nurturing of that, quote, plantation of goodness that could come out of that VMware? And again, it's probability. It's not guaranteed. Commentating on Twitter is pretty heavy on, can they win the devs? Can ops, the new ops bring it around the front? So VMware's in Broadcom's in a tough position. They bought more than they thought, in my opinion. And I think a lot of people are saying, does Broadcom recognize strategic value of what's coming out of the oven, so to speak, or what's blooming off the tree from VMware? And is it real? That is the number one question I talk to people in the hallway. That's what they're saying. They want to know what's going to happen with what's around the corner. That's on top of mind of everybody. It's a really important question because VMware's future is multi-cloud management, what we call super cloud. And without Tanzu, and I speculated that Tanzu was probably going to be under the microscope and potentially on the chopping block because they spent a lot of money marketing it, but they're probably not today getting a lot of returns. But without Tanzu, without a cross-cloud pass, what we sometimes call a super pass, that the strategy doesn't work. It basically fails. And I think what a lot of people are missing, and I saw you chime in on Twitter, is can they win the devs? Can they win the devs? This is table stakes. If you don't have a cross-cloud pass, and it's really about not necessarily just the devs, it's about the ops, right? Because now it's about security. Yes, shift left, but shield right. But the dev ops team, the ops team, needs consistency. It's like Adrian Cockroft says, the devs, they love to get married. The ops, they got to clean up after the divorce. And so they need standards. Implying that they'll use any tool for the job and not really worry about locking them. And I think today on the keynote, one of the Deshaunans up there who submitted a comment, you kids have it easy these days implying us old guys, when we coded, you had to do everything yourself. And Kelsey Hightower mentioned a support back desktop edition. The old days when I had to build everything by hand, now it's all automated, all goodness. But in all seriousness, the focus there was dev ops has won. Dev ops is what the developers are doing. The developers are in the clear right now, as far as I'm concerned. They have, they're sitting on the beach right now, sun glasses on, sun shining, everything's shift left, CI CD pipeline, cloud native goodness. If you're a dev, things are much rosier than an ops person. So dev ops is developer. Security and data ops is where the action is. So it's not so much IT operations as it is security and data leveling up to the velocity demand of developers and also ease of use. So self service, in the motion of coding, in the pipelining, that's what the developers have to have. And if people don't build that experience from the ops side, the new ops, it's not going to enable the development. It won't be adopted in my opinion. You know, you mentioned Paul Maritz before, his whole thing was any workload, any cloud, the software mainframe, they're talking about any Kubernetes, any cloud. And we got to go through some of the announcements real quick here. VMware Aria is the new multi-cloud management platform. That is the fundamental strategy for going cross cloud or what we call super cloud. The vSphere and vSAN 8 are big deals. And as it relates to compute with vSphere, they're really pushing that whole DPU. You might remember Project Monterey. Well, Project Monterey is essentially like AWS Nitro. It's the future of computing architecture, you know, seven years after AWS introduced it. So AWS is a huge lead here, but it's critical that a company like VMware is able to offer that capability with XPU optionality, GPU, CPU, ARM based, you know, Pensando capabilities, eventually NPUs, other capabilities to bring in and support new workloads, new data-driven workloads. So there's a lot of talk about the whole DPU thing. You know, as I mentioned, Tanzu, new version of Tanzu, they talked about Edge. You know, they're basically bringing VMware to the Edge with an eventual consistency model and a horizon cloud. On the vSphere thing, just to jump in there real quick. I always thought that that'd be higher up in the keynote. Clearly in the keynote, they flexed their cloud native positioning. They had to address the Broadcom thing, talk about modern applications. So it felt like they would sell them the dream on the front end. And they kind of buried the lead, in my opinion, which is vSphere 8. They don't do a lot of vSphere 8 announcements. If you look at the history of VMworlds, it's very, every few years they got a new release. This was packed with a lot of goodness. And I thought they buried that in the keynote. I don't know. I mean, you know, Raghu mentioned it. And yeah, I mean, they had a lot to cover. But, and then the other thing was they announced support for Red Hat OpenShift. So everybody's like, ooh, wow. And then, you know, Tanzu for, you know, all the Kubernetes versions from the cloud guys. So, you know, a lot of announcements, you got to always give VMware props. It's not like they stopped, you know, engineering. They're a great engineering culture. And so it's nice to see Project Monterey in particular go from R&D to actual product. And so, you know, we like to see that. Even towards the end, now that we're doing a keynote review, he's, Raghu said, as proud as we are, kind of, this is when they start talking about the sustainability, implying they're real proud engineering. I mean, that's a good, good call out there. And I think that's what they're trying to get across the hop 10, it was sitting in the front rows. But, you know, Dave, I mean, in terms of keynote, my analysis is clear. Raghu was nervous, you can tell, but he's not, he's a product guy, he even said that on stage. He set the table at the beginning, I thought really well, with modern applications. He had to address the name change. I thought that was interesting. He actually said, we built a community with VMworld, but now with multi-cloud, we're going to recall and explore. Not sure I agree with that. I mean, I think VMworld community is still vibrant and that's why they're here. So I thought that was kind of a nice, ready balance that out. The messaging is good, the graphics and the branding of Explorer is world class. I think it's phenomenal. You know, I'm not a big fan of the name change, but I never go well with change there. Haktan didn't speak, he did stand up and wave, but he didn't. There's no way he's going to get up and speak. He didn't speak. So I thought that was interesting front end, so they got that right out of the way, and you actually were saying last night. And then they got into this digitally smart concept, which I thought was kind of on point, did not like the great replatforming message. I didn't, not a big fan of that because it reminded me of the great resignation. I think there's going to be a lot of memes on that, so not a big fan of the great replatforming. I did like the Cloud Universal pitch, but this whole multi-cloud pitch seems to me, and I want to get your thoughts on this and that, that's what it reminded me of Paul Moritz. So when Ragu is clearly betting the ranch on multi-cloud. Okay, the question is timing. Paul Moritz in 2010 here at VMware, BM World Moscone, he laid out the vision. He was right, but timing was off the top of the stack didn't materialize. But at the end of the day, ended up being the right architecture. Is VMware too early with multi-cloud, Dave? And that's the question, that's the question on the table. Well, so a couple of things for Moritz. The mistake, the one mistake Moritz made was he really tried to go into apps, remember? Okay, so now at least, I think Ragu, the current VMware thinking is, we're going to enable apps to be developed, and that is the right thinking. Are they too early or too late with multi-cloud? I think technically it just wasn't feasible. The customers weren't ready for it. VMware moves at the speed of the CIO, we like to say. So I think the timing is actually really good because the technical capabilities are now there. You've got to have a cross-cloud path, which Tanzu is about, and I think Tanzu was too immature before. They've got the pieces on the DPU side. And the other thing about the timing is now with Broadcom acquiring VMware, the whole non-Dell ecosystem has got to be a lot happier, right? You know, NetApp, the guys like that. Why is that? Because Dell had their thumb on the scale. They had the thing rigged. I mean, Dell was sort of first in line for everything. You know, when EMC owned VMware, that was the case, but they were quiet about it. Dell made no concession that they just came out and said, we are going to be VMware first. We are the preferred partner. We do more business with anybody. They really drove a truck through that. And I think it caused a lot of the ecosystem to pull back like HPE and others to say, okay, we're going to find some alternatives here. Now they can really lean in. It's like when HP broken two, that really changed the ecosystem posture with HPE. This is like that, but times 10. What do you think about the ecosystem floor last night? We did a walk on the floor. I thought it was very vibrant. It was not a ghost town at all. No, not at all. We saw Alibaba Cloud was there. We saw a lot of smaller companies. Microsoft. Right? And so I thought it was better than I thought it would be. You know, there's probably what? 7,000 people here, I would say. You know, so well off from the 15,000, you know, pre-COVID highs, but still very robust. It's, you know, it's a good crowd. People are excited to be back in person, obviously. And you know, I think the messaging was right, John. I think cross-cloud, multi-cloud, super-cloud. That is the future with David Floyer. It took a stab at it. I think there's going to be a $100 billion market by the end of the decade. Super-cloud's the thing for sure. And I think that came out in the ARIA announcement, which is basically a rebranding. It's not a new product. Essentially it's the Cobble Together Management Platform. I thought the cloud universal notes here were interesting. The cloud universal is the commercial cloud smart component, meaning they're trying to make that the frame day for the hyperscalers to kind of come in to a de facto consortium movement. I feel like that's next here. If this cloud universal could become the super-cloud consortium, that might give them a better shot. The ecosystem is buzzing, attendance is strong. It's interesting. A lot of people are speculating, will this be an event? I thought they did a great job. I thought they came through well with this. Is this what you're saying about a consortium? Because you have to have the cloud guys in any consortium, but is any one cloud going to drive it? VMware could be the driver. I mean, I'm thinking if I had to make a prediction looking at what I just saw in the keynote, we'll see what the VMware and ZEC say. If I had to make a guess, I think you're going to have customers still double down on VMware stuff. They're going to settle into vSphere and networking compute and storage, the normal stuff that they got, the self-defined data center core, as a cloud operational platform. And then you're going to see a lot more AWS migration. You might see that if Broadcom doesn't nurture the fruit coming off the tree, as we mentioned earlier, I think you might see people go more cloud native. But I think VMware's prepared for that with the hybrid. So it's going to be very interesting to see. I think the winners coming out of this will be AWS, maybe a little bit of trickle into Azure. I like Bob, but mostly for the European, I mean the China side, but I see, don't see them playing. Google is a wild card, we'll see it from them. I think the other big thing about the timing to your earlier point is VMware used to go to market with very bespoke, okay, we got vSAN, we got NSX, we got vSphere, and now they're trying to bring that together. And essentially, remember, they used to go to market and say, okay, hey, your ELA is up. Time to renew, and they're talking to the wrong people. So now they're really, they're going forth with the NASA service model. They're going to move to a subscription model. And I think the timing is right for that. I would have liked to see it a little bit beforehand, maybe pre-COVID would have been better timing. But I think technically the time is right now for that. And I think looking at the acquisition, kind of speculating on that, I mean think, let's discuss kind of how we see things, how they might move forward. Again, we'll ask the guests as much as we can and the best they could answer. But let's take this forward, okay, based upon what I'm seeing here. If I'm Hock Tan and the audience, I'm saying to myself, okay, I got more here than I thought I was buying. Maybe I thought I was getting some great EBITDA. I wonder if his outlook changed on how he goes to market with the new VMware post acquisition. So that means in around February timeframe, I would probably, if I was advising him to say, okay, let's keep it as is. Let's not do the cut, cut, cut. Maybe trim a little bit here and there, but for the most part, he's got the solid base, customer base, and he's going to have to keep the event. And I think- Here's the problem with that. You know, they have a very high do say ratio. They do what they say they're going to do. And as a result, they've promised 8.5 billion in EBITDA by within three years out of VMware. And they return 50% of their free cash flow to investors. If they break that promise, their stock will get crushed. So I don't think they're going to break that promise. So I think they're going to run, that's something I believe in their playbook that they're not going to change. Now, could they get there without massive cuts? I think it's going to be hard. Can they get there with price increases? Yes, and better efficiency? Yes. But they don't have a lot of go-to-market synergies, John. Broadcom doesn't have a big sales force that they can say, okay, we're going to fire all the VMware sales force, and you're going to go to market through our channel like Oracle would do with their big sales force, or like Adele would do with an acquisition. They can't. And so I just don't see how they're going to run it. The only other thing I would say is, to me, I thought the application development piece, the Tanzu piece was very appropriate, and I think they got it. Whether or not they're going to succeed there, we can debate that. But I thought what was missing was there wasn't enough in my opinion on their security posture, their security strategy. I thought they gave it lip service with, oh yeah, we're going to shift left, and you know, dev security, et cetera. They did not go in-depth. I think when you talk to someone like Tom Gillis who really can go deep, I think they, talking about Barry and the lead, that was not, security is the number one issue of CIOs, CIOs, CIOs, it boards, it's number one. And data is the second thing. And those two stories in the keynote were quasi-non-existent and or weak. Again, and the reason why I believe, and you're discussing it publicly at a high level, is SuperCloud is real because it's not just SaaS on cloud. It's hybrid, it's DevOps, it's developer. And security and data operations are just absolutely now leveling up, and the edge is a complete wildcard. We met the company last night, they're doing the edge cloud. The edge is going to open up all kinds of new use cases and challenges, so I think, you know, and that's on the data security side. DevOps, IT operations is already in the dev cycle. If companies aren't doing that in my opinion, they're not really doing it right. So I think it'll shift to security in ops and data ops, that's going to be the action. In the cloud operational framework, that's SuperCloud. To me, if I'm hocked at, I'm saying VMworld, VMware Explorer, VMware has to be a core component of SuperCloud of the future. Not multi-cloud, that's just a kind of a state. I think multi-cloud is just a description of a state of an architecture and an outcome, but that's not SuperCloud. That's not a functioning operating system. That's not a functioning business driver driven technology. So I think VMware is up to it. So I look at that and saying, I got chip options all the way up to the top of the stack and SuperCloud pass layers. You described that, I think it's the way to go. When you think about how VMware got here, VMware was a $13 billion trailing 12 month revenue company. There aren't a lot of $13 billion software companies. And the way VMware got here is through great software engineering. Okay, they identified problems that the customers had and they went and solved them. They did it with virtualization. They did it with private cloud. You know, they're doing it with, they figured out their public cloud strategy. So I think the question for Broadcom is going to be, okay, how fast can we monetize that engineering? Can we turn that engineering R&D into dollars and how fast can we do that? You know, they have two choices in my opinion. Keep innovating, which of course we hope that's the case or act like a private equity firm and just squeeze as much cash out of VMware as possible. Which I don't think would be the right strategy because eventually that says, okay, what's going to happen to Broadcom? How are they going to continue to grow? Are they going to have to just keep growing through acquisition? So I think R&D is a really good spend when it's VMware. And I think as we wrap up our keynote analysis, one of the things that are going to come out of this is the conversation. No doubt in my mind will be VMware isn't CA. And the question is, does Broadcom go off their playbook with VMware? Because of the fact that you look at the sponsorships for the show, we got a robust set of sponsorships for theCUBE with two sets. We're booked, fully loaded, conversations high, that Floor is all about next level cloud operations. This is not a dying market. I mean, this is like a growth wave coming. So the question, as SuperCloud becomes that growth and everyone's talking about SuperCloud, there are, you know, some people don't like the name, which is good, keep grace, debate, but there's no doubt that that next wave is the SuperCloud philosophy, the SuperCloud mindset and architecture and development environment. And we've documented that on supercloud.world if anyone's interested, but that wave is coming. And you can see it on the floor, look at the sponsors, look at what people are talking about, Dave. This is not like we're buying VMware, Broadcom buying VMware and talking to get under and saying, okay, hope we can service the customer. There's a real market growth here story. So the question is, what do you do with that? Well, so you start with the base. VMware is a very good platform. I mean, the reason why, they don't have a ton of competition. And the reason why, you know, okay, Nectanix can maybe trickle some away, but VMware is really good. It works, it's stable, it recovers from failures. It's got a super strong ecosystem. So you start by building there and then you identify the places where you can, you know, spend a dollar and make it 10. Well, I was very excited that when we had our SuperCloud event, which is kind of a virtual event as a test, we had great VMware support. And a lot of the catalog sessions up here on Moscone West where we're sitting upstairs is all the sessions. They're crowded and they overlaid, Dave, with our narrative and the industry narrative on the influencer side. We're starting to see the influencers meeting our editorial and just seeing the SuperCloud with VMware and their ecosystem. Kind of agreeing SuperCloud is real. And I think that is an important note because just last December, when we coined the term at ReInvent, hey, Dave, it's ReInvent. Look what's happened. And I want to get your thoughts and your reaction to why SuperCloud has got so much traction. I mean, it's great buzz with the name, but why is it that our SuperCloud, the VMware and the ecosystem are all aligning with this? Why do you think that's happening? Why do you think that the momentum is accelerating? The reason is that, as everybody knows, organizations have multiple clouds. It's a function of shadow, devs, M&A. And so they end up with all these different clouds, all these different projects, different primitives, different APIs, different tool sets, okay. And they call the cloud chaos today. It's accurate. It is cloud chaos. Okay, so what's the problem with that? Well, that makes it harder to secure. It makes it harder to govern. It makes it harder to share data. It creates data silos. What's the answer? Well, if you can create a layer, that's an abstraction layer that simplifies all that cross-cloud data sharing and development and have a consistent set of APIs through a PAS layer. We call it SuperPAS. And you're going to have a metadata intelligence that says, okay, I'm going to put this here, I'll put that there, and I'm going to deal with latency. I'm going to optimize for whatever purpose, data sharing or performance or whatever it is. You're going to solve a lot of problems and you're going to make the CIOs life easier so that they can invest in their own business and their digital transformation and their digital strategy. So that's why people agree. They might not agree with the name, but they certainly agree with the concept that that abstraction layer is the... The name is certainly a better name than multi-cloud. Multi-cloud sounds broken, but I think CIOs and CXOs, CISOs have to get buy-in from their teams. The organic dev relationship with ops and sec ops and data ops has to be symbionic, not conflicting. And I love the CIOs story because as Andy Grove, the legend at Intel, as one said, let CIOs rain and then rain in the CIOs. CIOs is cash. And so in any innovation inflection point, CIOs becomes the complexity, abstraction layers and or innovation takes that complexity away. This is the formula for success. And I think VMware's right in the middle of it. And I think if I'm looking at VMware right now, I'm saying, hey, rain in that CIOs right now and you win, right? So CIOs is not a bad thing if you can rain it in, Dave, right? And that's what they've done. You think about what they've did with virtualization. It was chaotic. It was wasteful. Think of what they did with private cloud. They said, hey, IT guys, we're going to help you not get cloudified. We're going to cloudify your presence on-prem and not just throw everything in the cloud. They did a great job there. And now it's all about multi-cloud. Well, we're going to rain in the CIOs, extract the signal from the noise, super cube here at super cloud event, VMware Explorer, Dave, great to kick it off again. 12th year of cube coverage. It seems like a lifetime, Dave, just yesterday. We were here in 2010. We've been in Moscone South. We've been in North. We've been in Las Vegas. It's now we're here. It's the first time in West. Some of these developers were in elementary school when we started the cube here. It's just feeling old relics. Anyway, we're going to bring more action. Three days of coverage, the cube.net, check it out, join our community, join the conversation as the influences are coming more onto the market. You're seeing a lot more conversations on Twitter, on LinkedIn, on the internet. Check it out, join the conversation. I'm John Furrier, Dave Vellante. We'll be back with more coverage here in San Francisco after this break.