 Okay, we're back at VMworld 2011. I'm John Furrier, the founder of SiliconANGLE.com, SiliconANGLE.tv, and we're here at the CUBE, our flagship telecast, where we go out to the events here with VMworld 2011. We get all the knowledge, extract it, and share it with you, and I'm here with my co-host. I'm Dave Vellante of Wikibon.org, and we're here with Alex Williams, the man behind services angle. Alex, welcome. We're going to do a wrap up of the show, and Dave, I just want to just share with the folks out there as we wrap up VMworld 2011. Day four, we've had eight hours of programming plus every day, Monday, Tuesday, Wednesday, half-day today as they break down, but we had over 70 guests and 19 spotlights. We had Pat Kelsinger, Todd Nielsen, Steve Herrick, Jerry Chen from Cloud Foundry, Tom George, the CEO of NetApp, David Flynn, CEO of FusionIO, Rich Proberg, IO Turbine, Sony, Jinjani from Cisco, Jay Sri, Artal from Arista, Rick Jackson from VMware, CMO, Mark Eagan, John Thompson, Scott Jennero from Nervonix, and many more guests. We had a start-up spotlight. We had all the hot start-ups. We had big data spotlight with Amarawa Della from Cloudera. We had a blogger spotlight, a VC spotlight, virtual storage spotlight, hybrid cloud spotlight, open data center spotlight, convergent spotlight, VMware integration spotlight, networking spotlight, and many more, and it wouldn't be possible without our sponsors. I want to thank HP, EMC, Broadcom, IBM, SolidFire. Did I miss anyone? Let's see, Intel, get Intel? Yeah, got Intel, IBM, HP, EMC, SolidFire. Without our sponsors, we would not be able to bring you this in-depth coverage, and it's been a fantastic week. I want to thank the team, Marcus and Hopkins and Keen for production, Michael Sean Wright for being a creative director, Mark Oster for doing film, filming of all the spotlights and more, all the footage. Your team background, David Floyer, Stu Miniman, Nick Allen, our team back home. Team back home, Chris and Nicole, Art, Clint, Bert, Jeff Kelly, and all the bloggers out there, combining massive coverage. We get the videos, they write about them, all the stories, great- Clint from- Clint Finley. Yeah, great lineup, and great team effort, and without all cubes, great event. We're learning, we're getting bumps in the road, I'm really proud of the team, and it's exciting, I want to thank VMware for a great event and hosting us and allowing us to do our independent, organic coverage with the new spotlight integration. It's been a huge success, and Alex Williams was out on the floor, scouring the landscape, talking to all the people, getting video, Dave, we'll share what we learned, but I want to go to Alex and say, Alex, you did a great job this trip, and congratulations, your first real PowerCube day. What did you learn out there? Tell us what you've learned. You know, it was one of the most interesting tech events I've been to, and just talking to people, and kind of seeing these mega trends that are emerging with virtualization, and one of the realizations that I've come to is how virtualization is kind of like having this vaporizing effect, and so I went over and talked to the bloggers just a few minutes ago, and I said, what are you guys excited about? And they said, App Laster and Octopus, and I'm like, okay, why? They're like, well, essentially, I can publish any app, you know, immediately with App Laster, and I started thinking about that, and I think that's really significant, because what that shows is a few things. It's demonstrating of how the networks are changing, how storage is changing, how really everything is being disrupted in many ways. Is that the enabler for the app store of the enterprise in your view? I think, you know, we'll see. You know, the interesting thing about it is it can go to any device, right? It's HTML5, right? And so there are issues with HTML5, so I think there will be some slowdown. Those guys in particular mentioned security as a problem, because when, you know, because a hacker what they can do is they can get into the cache, then they can, you know, without the user knowing, and then the hack can be reassembled and cause havoc. So there are security issues, but that's more of an industry-wide issue, and I think that's what's interesting is like, we're seeing issues here, topics here that have far-wide impact across the entire sector. Dave, I got to say, you know, it's been a great, another great cube working with you up here, and you know, I had a little problem with my voice on day two. Got a little cold, but you know, we persevered like we always do with the cube, but with all these guests coming in, one high-level theme that I saw was that, again, VMware here at VMworld 2011 is about disruption, and this mega trend that we're seeing with cloud, mobile, social, and this new architecture is about a disruptive element. And to me, I want to break it down in three areas. At the kind of the hardware, maybe even down to the silicon level, that all the hardware that powers network storage and the hardware is actually being forced down and being commoditized. So there's a whole big disruption at the hardware layer. That virtualization affects. Take it up a notch, you're talking about applications. So as Alex mentioned, the application market's very disruptive, meaning new applications on the enterprise and the consumer. We saw a social cast on that side to others. And then finally, the user. The user experience is tying it all together. These are the perfect storm variables. And these theaters, in each of those theaters, Dave, there is massive disruption. And the center of it is virtualization. The center of it is innovation, startups, investors. All this is going on. And to me, it's explosive. And it's causing the big guys to really rethink their architectures, how they sell, how they do services. And ultimately, the applications will rule and it's a massive transition. And we're just at the beginning. You know what impresses me, John? I didn't know Paul Moritz when he was at Microsoft. I first met him when he took over at VMware. And he was at an investor conference, I think it was three years ago, and he put out this vision of a software mainframe. And I got excited, you know, an old mainframe, right? But the idea, you know, people don't like that term inside of VMware from a marketing standpoint because a mainframe is this big hairball and it's expensive. But the concept is based on commodity components. And he put out that vision there. And basically that vision was, we're going to be able to run any application at any workload. And we're going to build out platforms. We're going to support new applications. And we're going to, at the time, he didn't talk about doing it in the cloud. That came later. But essentially, VMware has executed on that vision really, really well. And I'm extremely impressed with that. And they've innovated, right? So last year they rolled this out and they rolled out the concept and they laid out the architecture. This year we're seeing more fill-in, more products, more labs. We heard from Chad Sackack and others like, hey, we're seeing these amazing face-melting demos. You're seeing those products. But ultimately what I heard here, Dave, is the disruption of this ecosystem validated by a massive solutions pavilion. Everyone's buzz, it's going to get packed every year. And this will grow into a massive conference. But ultimately the winners and losers this year are going to start to emerge. And to us, that's great for Silicon Angle and Wikibon as we get to watch for the front row seat and in the trenches with these guys. So it's really exciting. Scott McNeill used to have this analogy of car dealers and car makers. I don't know if you ever heard Scott talk about that. And he said, hey, we're going to be a car maker. And his father was from Detroit in the car business. He said, the big guys, GM and Ford and Chrysler, in the day, they made all the money. The car dealers had a great business. They went out, they had big boats, they had nice cars in the lake. But the billionaires, the big Titans were the car makers. Now, of course, son went for being a car maker. They didn't really quite make it. Oracle is now the car maker. The point I'm making is that VMware is the car maker. Yeah, and their ecosystem is early. We heard from Nirvana, which is the start of this delivering solutions. We have incumbents like HP delivering solutions. But ultimately, as VMware starts to grow with their ecosystem, as these products mature, we talked about the next year, we're going to see PowerPoints move to case studies and best practices. So that's going to be the evolution of this next year. We're going to see it still early. People are making changes. There are some cloud solutions out there with kind of incumbent solutions we heard from HP and others, so it's going to be very exciting. The business angle. I'm sorry. I just want one more point I want to make on that. The business angle on that is that, well, for every dollar spent on VMware licenses, there's 17 spent in the ecosystem. That 17 is very distributed. So one company is going to make a whole boatload of money. What did Pat Gelsinger say? If you're not out in front of the wave, your drift would. Your drift would, right? And everybody else is going to fight after that white space and find innovation. A lot of money to be made, Alex. But one guy is going to get the super huge prize. Go ahead. I totally agree. And what you're also starting to see when you're talking about that ecosystem, you're seeing, you know, you go on the show floor and you're talking about a lot of collaboration that's going on back there, right? And then you have like this new ecosystem that you're seeing here for the first time. You know, the people who like I listen to and who I really follow, the cloud of Roddy, so to speak, where did they show up this year? They were here. They were here. Randy Bias, George Reese, Chris Hoff. They were all here, right? Why were they here? Because there's some interesting developments that are happening, especially in the platform space with Cloud Foundry. And in addition, we're seeing this battle go up the stack. We are, it's increasingly going to move to the application layer. And I mean, just look at what's happening between VMware and Salesforce. They're going head to head. Yeah, well, we had those Cladirati on theCUBE, which is fantastic, because they share them. They're available on SiliconANGLE.tv. But let's guys, let's talk into some of the trending items that we saw at the show here. Kind of put a little Twitter metaphor here. I'll start, I'll just say, Dave, I saw data mobility as a big issue. I'll see security, storage, virtualization, SSD, Cloud Foundry, all these were buzzing items. And these were areas that were rapid with debate and conversations. What did you see? I mean, same thing, what are your observations? For sure, I mean, I would add to that. You know, one of the interesting subtext that I picked up here at the event was when you talk to the IT practitioners, you know, VMware is extremely well entrenched now in virtually every organization worldwide. You heard Maritz show the data, well over 50% of the servers are now virtual servers. More than half of the applications are virtualized. That means that VMware is sitting in the driver's seat with a lot of these users. I heard a lot of little, I mean, people love this show. They love this event. They love being with their practitioners. I did begin to hear some grumbling about pricing, you know, where we're headed with, you know, future pricing and end user license agreements. And you're starting to see, as VMware grows, they're starting to gain more influence over that user community. Obviously, they're a for-profit company. You heard some interesting subtext. They're still very passionate, very, very much in love with the platform. Like you said, my observation, I'll reiterate that is that what's surprising to me and looking at it now is really not that surprising is that VMware literally is number one on the enterprise. They're in all the enterprises. To some degree or another, every enterprise has a little bit of VMware in it. And so what they've done is they're sitting in the middle between two layers, the networking side and now the cloud side. So as clouds start to explode, VMware's in a pole position to really expand the innovation. And we heard that from folks last night when we were at that event about, they sit on the buyer's side on the network and the buyer's side on the cloud and app side. So very interesting position to be in. So VMware has to walk a fine line between locking in and let's be honest, because there is lock-in, okay? There's always a lot. Anytime somebody's making big money, there's lock-in. But they have to walk a fine line between being too aggressive and being too greedy and being very ecosystem and customer-friendly. And I think they've done a masterful job of walking the cloud. Well, they have to grow their ecosystem, which is partnership and alliance-based at the same time, build out their platform. And that's going to pose some challenges. We heard that from Chris Hoff at Beaker on Twitter. You can follow him. He's been tracking. He's now the chief security architect at Juniper. He kind of called it out and said, hey, you know, it should be at a point where there's not a lot of co-engineering involved around working with VMware. How about you, Alex? What'd you see? Well, there's a credibility factor here for IT. I had a great conversation with Dave Lawyer yesterday about this, and he really talks about IT as a service, right? IT, that's where IT is moving. IT is a service, but there's this fine line as those remaining 50% of servers become virtualized and we start virtualizing those critical apps. Now that there's greater risk, there's much greater risk for IT because if you have any kind of failure for a critical app, you're going to have some trouble. And then what you have in the lines of business, they have an issue because if they go too far with using free services or whatever and really kind of embracing shadow IT, they have a problem if their systems go down. So there's still some issues that need to be sorted out. And I think that's what you see in an event like this and the people I talk to that we can't get too far ahead of the game. We can't get too far in talking about private cloud, public cloud, hybrid cloud because there are issues that people face inside the enterprise that are really critical for credibility in all camps. Dave, let me ask Dave a question. Dave, you're an analyst, so you've been covering the horses for many years here in the IT space and obviously on storage and virtualization, which is our wheelhouse. Why is it that so many people here behind us in the Solutions Building are into working with VMware? Why is it so intense? I mean, VMware still has got a lot of work to do. It's still work in progress. I mean, obviously transformation, IT as a service that Alex pointed out are right on the money, but what's your analysis? I think my analysis is that I go back to the first time I ever saw a VMware demo and the impact that VMware had on organizations. It was so transformational, going from siloed servers that are utilized at 10% and having to launch a new application and buying a new server and provisioning new storage and just building everything in this vertical silo to what VMware did. It completely changed the lives of virtually every IT person, dramatic. And that was, there was built up so much affinity and it's been going on for now, the better part of a decade. And so as a result, there's a tremendous loyalty here. And then of course VMware has done a phenomenal job of bringing in this massive ecosystem. So I think that's why people are so excited about it. Guys, I'd like to get your outlook for next year. We'll start with Dave and then Alex and then I'll finish it up to have an opinion. But what is your outlook for VMware and VMware's ecosystem here as they sit in the center of IT for next year? I think Steve Herrod's keynote really framed the issues for me, the performance, availability, mobility and security. And I think that on the performance and availability front, absolutely phenomenal job. I mean, I can't say enough about what VMware has done there. Mobility, what a difference, John, between this year end user computing, the mobile vision that's being put forth and last year with the VDI do over. So I think, you know, while there's clearly not there yet, they're now on the right track. Security is the big area for me. I think that that is the area that the community, the ecosystem is overstating the capabilities. Herrod said that VMware security is quote unquote better. We had a big discussion with Chris Hoff about this than it is in traditional enterprise. I think it potentially can be, it's not today. They use D-Bold as an example. You peel the onions on that D-Bold example and what you'll find is a single application on a single server with a big physical fence around it. What does that mean to the folks out there? Describe what's the impact of that. So what it means is while they're using an ATM company as an example, it doesn't mean that the security problem is solved. That don't buy into that marketing. The fact is that they're solving that problem in the same way we've always solved security. So VMware has a lot more work to do. Chris Hoff said it the best. They're really focusing on compliance. You know, checking a tick box, essentially making Mac a fee better. That's not what this industry needs. And that's where VMware really has to do a lot of work and the last point I'll make on that is they say it's an ecosystem problem. It's really not our problem. I disagree. It is VMware's problem. They have 50% of the servers. They own it. They own it. They own it. More than 50% of the applications. It is VMware's problem. They need to solve this. Yes, they need help from the ecosystem but VMware really needs to step up and fundamentally design security into its architecture. Alex, what's your outlook for VMware next year? It's a good problem to have though, right? Oh, that's a great problem to have. A lot of people would love to have that problem. Yeah, well, we're gonna keep them in check. That's for sure. So, from, you know, in conversations I've had, one of the most interesting things is like this quest that VMware is upon. And in some ways, if you just look it on, you know, in terms of the balance sheet, you know, where does VMware want to be? They want to be a $10 billion company. I mean, and so how are they going to do that? They're going to, they want to virtualize everything. And that means though, that they have to start thinking about what is virtualization enable? And that's always been the most interesting thing for me about virtualization. It's an enabler to do other things, right? The core technology in itself is very complicated but it is an enabler for doing lots and lots of, lots and lots of different things. So that post PC era is directly tied to that. I think that's gonna, you know, we're in that post PC era. The end user computing is gonna be increasingly more critical. Mobile virtualization is going to be a big topic and you're gonna see a lot more competition in that space especially from companies like OK Labs and such. And then there's the price pressure, like you're talking about with Citrix and Citrix and Microsoft both competing there. So that, yeah. My take, my take is that Dave, my outlook for VMware next year is, and going forward is it's complete validation around the architecture they put forth last year, around the networking and hardware disruption, applications and then consumer experience. So all three of those layers complete validation. From this show, I walk away and saying, we're going forward in the world, that's completely validated. The key other walk away is that VMware's got a lot of work to do as you pointed out with security and they're going to run like the wind and try to balance product delivery and ecosystem development. Third, I think we're going to see a massive competitive landscape where people are going to fight for VMware integration and VMware differentiation around VMware and cloud. And what's going to come out of that is going to be winners and losers. And finally, with the emphasis on delivering solutions, I think my final walk away is that the demand for cloud in a kind of a generic sense is so massive that's going to force and keep in check the vendors to deliver real solutions. And I think to me, that's the real walk away. It's exciting. And finally, underneath all that, we heard from the startups and the venture capitalists, huge innovation from the startup community. So this is a very explosive area. It's not just VMware, but VMware's leading it. You're going to see Citrix try to nibble away at that and try to make a play. They're aligning with VMware in a way here, co-opetition, so overall validation, product delivery, winners and losers, and excitement on the innovation side. And we are going to be here covering it like a blanket. I think now's a good time to share with the audience. Go to siliconangle.com. Go to siliconangle.tv. Go to services angle. Check out what we're writing about there. We are covering this show like a blanket. Go to wikibon.org. Look deep into the research. Contribute research, hit the edit key, improve it. We've got all the angles covered. You got questions. Hopefully we've got answers. If we don't, send us an email, send us a tweet, ask a question of the community, and we'll do our best to get back to you. Thank you very much for all your support. We love you. Thanks for watching. You've been tremendous. And again, thanks to the team. Dave, great job. Again, Siliconangles focused on the real-time media. Alex Williams is new from ReadWriteWeb. Clint Finley, new from ReadWriteWeb. We'll be adding more senior writers expanding theCUBE and siliconangle.tv. Great job. And thanks for everyone for watching. And this is a wrap from VMworld 2011. Thank you.