 Covering VMworld 2015, brought to you by VMware and its ecosystem sponsors. Now your hosts, John Furrier and Dave Vellante. Okay, welcome back everyone. We are here live in San Francisco at Moscone North Lobby for VMworld 2015. This is SiliconANGLE, media is the cube. Wikibon, SiliconANGLE, and theCUBE are all here breaking down VMworld 2015. This is our wrap up for the show. We'll have some streaming tomorrow, Thursday, and maybe a few interviews, so this is the real wrap up of the whole show. We're going to put it all together, roll it all up. I'm John Furrier with Dave Vellante, Brian Gracely, Stu Miniman, we've got the analysts here, we've got the cube team. Great event guys, I want to just say that I feel that this is a transition point, an inflection point for VMware. And my takeaway from the show is just the overall surround sound of the echoing theme, the future of VMware, and can they get bigger with the looming backdrop of Amazon web services. So I want to get you guys to take on the summary of the show. Obviously I just flew a product announcements, NSX showing some nice milestones, Cisco with their approach with ACI, we had them on the cube, we had a lot of startups, we actually had Pat Gelsinger and all the top dogs at VMware, really talking about the multi-cloud world, not a lot of big data, but a lot of DevOps conversations. So to me that's kind of the surround sound themes. Dave, your thoughts, I mean we're kind of, I mean I'm going to have to ask Jeff Frick what we did, but it sounds like 150, but I don't know, what's your take? So John, I came in here with the theme of wither VMware, what's going on, what's the future look like, and I wanted to ask people about that, what they thought, collect data around that. And I thought Nelson Nahum from little startups, Zadara storage summed it up the best, he said, if I were CEO of VMware, I would be very happy. So the point is this company has really done a tremendous job of building an ecosystem and it's incredibly strong. Now, us, when they get to this level, we want to see more. And as I've said a number of times, they're fighting battles on multiple fronts. They are a winning company. The question is, can they win all those battles? Brian and I just interviewed A.J. Patel, who's the Senior Vice President of the Cloud Services Business Unit. I think you're right, he told that story as well, if not better than anybody. He told it better than Bill Fathers. You kind of made that statement off camera. I'm going to make it on camera, it's true. It was clear, Chris, you know, there's some signs of life and momentum, but I asked them what kept them up at night and he nailed the answer, scale. They've got the scale. We've talked about this a lot for the reasons why. And so to me, that's the linchpin of their future. So tooling aside, they've been incrementally making improvements. Brian, I'll get your take on this deep in the cloud, kind of get down the wheeze and or top high level. They've been incrementally improving. And Pat gets, we had things on the roadmap from last year, year before, that's been rolling out kind of a rolling thunder of new product releases, point releases, new products. But is there that scale question of, is there a big game changing, throwing the ball down the field, big move by VMware? Do they have it? And again, competition is hot on their heels. Right, well, you know, I think it's a couple of things. We talked about scale, scale is a matter of dollars. The folks they're competing against are putting a billion dollars a quarter in. I don't think they're making that commitment yet. They're not building it and they will come. Now, when we came in, I mean, I was somewhat skeptical. I wasn't seeing the developer service being put in there. I wasn't seeing sort of the acceleration of services. But like Dave said, AJ Flatout said, here's our market, our market is enterprise applications. It's the IT organizations doing some extension of those. There's a huge market there. That's an enormous market. And as big as Amazon is, you know, we've said before, they're six billion dollars. Yeah, that's an 80, 90, $100 billion a year enterprise market. They have an opportunity, but they've got to articulate it because right now, people all they hear is virtual machine, virtual machine, virtual machine. Rather you're going after old apps or new apps, you've got to talk about apps or you're talking about cloud. Yeah, I would just point on that. If VMware's going to succeed, they need to have that ecosystem grow. It needs to be the server providers. When I looked at the metrics that I heard at the show, we got clear numbers of growth, you know, VSAN over 2,000 customers, NSX over 700 customers. You start poking around at VCloud Air and it's like, well, I don't know, it's not thousands. Right. You know, it's definitely less than that. But you know, they're putting all the pieces together and they're still going to be finalizing and expect later this year to hear more as to how the whole enterprise, including Virtus.treem, you know, pushes forward with the whole cloud message. How about you, weigh in? What's, you know, your thoughts, takeaways? I think a couple things. One, Pat Gelsinger said one comment that really hit a nerve with me that I had a blind spot on and at least coming in for the show because we've been so focused on DevOps. I mean, we've been deep on the DevOps. Obviously, at a practitioner level with our software development process here at Silicon Eagle Media and then Brian's new coverage that's going very, very deep is that it's about the developers, right? So we're seeing the applications drive it. So this is something we've been talking about. So the blind spot for me is what Pat Gelsinger says. When they surveyed all the people going to the DevOps shows, they've been mostly IT ops guys. Now that makes a lot of sense because they're in the VMware ecosystem. So I see this VMware moving into the developer space. We kind of touched on it yesterday and they don't really have an answer for it in my mind. I don't see VMware really having anything that developers would want to play with or use other than infrastructure. That's transparent. Pivotal, on the other hand, might have something. So this brings up the question of, hmm, is DevOps the right fit? Where should it sit? How does the new federation configuration that's being rumored by the end of the month or the end of October change all that? So that to me was something that really was provocative but also opened up another door to go down to conclusion which is what is the future of DevOps in a VM world scale world? Is it ops dev? And then if there's a developer angle, when does that fit into this looming change of the federation? So I'd just love to get your thoughts guys on that because it really brings up that question. In order to win, you got to have the developer support. You got to have an environment where you can push code and have stuff work to iterate through. So what's your thoughts? Well, I mean, for me, I've been doing a bunch of research around platforms. I think Pivotal's doing extremely well. I think Pivotal's excited about what VMWare's doing with containers. But the other thing I'm seeing, and you interviewed a bunch of the VMafia VCs yesterday. I interviewed a bunch on a panel that are spinning out new companies. A lot of that new stuff, the VMafia's filling in. They're doing as a service things for OpenStack, for developers, for data services. VMWare's got to figure out a way to keep that talent in house or they got to figure out a way to look at these new SaaS models because that's what developers don't want. They want easy, they want low friction. VMWare's got to get to that point. I just saw a pizza on Cini came by. I have to say hello there at an event. So we hung out with Jerry Chen last night. We talked to Steve Chair Herrod. That's a great point Dave. We talk about this all the time when we talk to the EMC executives. Organic growth versus inorganic. And can VMWare continue to grow organically with all the stuff on their plate? This is the real issue. And I think you highlight that point really well. And you know what? It's a huge opportunity for startups. Huge. Yeah, so actually what I thought was interesting, we always get a lot of good interesting startups here. But over the last year, there's been some of the companies that were really successful that are now doing the next turn. So Dave, you and John interviewed Datrium who's Brian Biles had done Data Main. My last interview today was Paul Long. Everybody knows from Equalogic days. We've got the former Fusion guys doing primary data. So we keep looking at these and say how many of these companies are just going to be features that might be sucked into the big companies. And Dave, I know you've watched this piece. That's why I want your take. Well, let's talk about, I want to talk about sort of the Federation a little bit. And it's interesting, these options that are all on the table, all kinds of stuff. Right, you know, at the VC meetings last night, everybody's talking about, not a lot of talking the floor about it. You know, it's interesting. The customers that I asked about it, it was mixed. Some of them, yeah, we don't really pay attention to that. Others said, we absolutely see value in that Federation. You know, one of the guys that I had on, I pushed him pretty hard on it. So let's talk about what we're hearing, you know, what's going on, what the options are. So Elliott Management, the whole quiet thing expired yesterday, right? So now the gloves are off again. Here, they're kicking it down the can down the road. But what are the options? You know, we've heard, we recode, there was a leak to recode about, you know. A leak, oh, leaks. Really in fact, I don't know why they leak it to recode. They should just talk about it in public. But so they, EMC buying EMC, all this crazy stuff. Now what we do know is there's this Tiger team that's been created, I call it a Tiger team, right? She's been talking about that a little bit. That there's this sort of Federation group that's emerged. I've heard that too from multiple sources here on the ground, that there is a lead team of people looking at the customer consumption of a federated model of services. So is that a Petri dish for a new model? You know, to me, Gouldin's got to be involved in the future because he's the architect of this whole thing. And I think, you know, what happens with the rest? Here's my take, here's my take. I'll give you my take on what I'm hearing. So what I'm seeing is a similar concept that you see Google doing with Alphabet. And we've talked about this on theCUBE, on our pre-show, is that there is a new corporate governance model coming out that takes into account new business models. So the innovation is not just on the technology side. Most of the stuff we hear about adoption is people-based and or organizationally-based. So I think that this idea of Google Alphabet where Google renamed their company, putting all their project X stuff in a separate company, and their core business in Google, run by a CEO dedicated for that. I think EMC has this opportunity. They've been basically operating as that kind of company, loosely coupled with the Federation. I think they could formalize that and put more meat on the bone. That does not include VMware buying EMC. I think the recode story is going to turn out to be false. And I think that leak might have been targeted by someone pushing an agenda, Elliott Capital, a source, we'll dig into that. But ultimately I think EMC is too powerful. I think the culture of the DNA is not going to let a corporate rate or Gordon Gekko wreck that company. Well, but so you know where I stand on this. I feel like EMC has to stay the course, but it's not going to be easy, right? Because Gordon Gekko gets investors in a headlock. They won't give up. Let's say EMC acquires the rest of VMware. This is not over. Gordon Gekko will be there, complaining, trying to get things spun out. Instortion takes on variety of forms. It's an extortion model. You could say, okay, we'll pay you out, your dividends, you get your share, buy back all that financial engine. And Goulden could be a master at that. And he has to place that game beautifully. Assuming cash flow pops back up, right? Which 2017? The bigger question is can they pull it off? So structure aside, and it could probably come with a variety of versions of how to pull this off. The question is leadership. Who's the CEO? Pat Gelsinger, someone else. How does the Federation work? Is VMware going to be the lead dog in this? And is that Pat Gelsinger at the helm? And then all these other speculative things that happen, but it clearly has to be where the gloves are off. LA Capital now can talk publicly about their feelings of VMware. So I expect the heat to go up into the kitchen big time. And I think it's going to all play out, but I would be completely shocked if VMware buys EMC, just I just don't see that ever happening. I think it's going to be the other way around. Anything to add? You know, Dave, no matter what happens here, how are they going to keep their employees happy? You know, we've seen the shift of the center of power. It's out here on the West Coast. I mean, Dave, you and I are East Coast guys, Brian Denise Coast guy. EMC's been there since the birth, but a lot of the management's out here on the West Coast. It's essentially a bi-coastal company, right? How many buildings in Hopkins does EMC have? A lot. I think South Street's got like, I mean, 8,000, 9,000 employees. Yeah, I mean, EMC is a culture of fighters. That's a DNA of companies that's not going to quit. I think they will fight to the end to preserve the original founder's vision. I think that the VMware will have to be part of that. I just don't see EMC putting up, laying down, and I don't see Joe Tucci lying down. But you see Jack Egan who gets more involved in this? I mean, he's relatively young. That's a dark horse in this deep. He's still in his 50s, yeah. There's still very different cultures between the VMware campus and EMC, East Coast, West Coast, doesn't matter. So there's differences there. So putting them together doesn't necessarily mean that classic East Coast, West Coast. Look, I mean, EMC has an injection of West Coast over the past few years. We talked about this, how Pat Gelskin came from Intel. Hey, this is how we innovate Moore's Law. And they have West Coast Jeremy Burton's out here. So I think they're used to the bi-coastal. I don't think that's a problem. I think the issue's going to be how does the industry respond and how fast can EMC actually organize themselves to roll out a corporate structure? So Google is pretty clean. You've got two founders, Larry and Sergey, core business throwing off a ton of cash in search, and they have all these speculative projects, self-driving cars, Project X now and Mountain View. So that's, to me, you can get my arms around that. EMC, I just can't materialize. Well, the key is the VMAX. The key is the new initiative. It's got to start throwing off cash. And that's not going to happen in a big way in 16, but it could happen in a big way in 17. We're talking about DSSD and AirWatch and NSX and VSAN. Yeah, so I mean, one of the gripes I hear is there's the inequities in the market. If you're in Amazon, you don't need to be profitable. If you're a Google, you can do something like Alphabet and everybody's like, oh, this is awesome. And your EMC and your VMware, you're doing good. Your leaders in your marketplace, you're still growing. And no, you need to do all this mac and age. How about Virtustream? Interesting acquisition. That kind of signals that they were filling some holes. What's your take on all that? I mean, SAP, obviously, we're talking about that. Obviously, SAP, I mean, we heard some talk on the street and in the hallways. It may spin out sort of a cloud business unit, maybe put together vCloud Air and Virtustream. Maybe Rodney Rogers runs that. We heard some of those rumors. We said coming in, and you mentioned this, you guys talked to Dave Donatelli, like to compete in this space, you've got to have a cloud. When we talked to AJ, he was saying, well, our network of people is as big as Azure, but you've got to, I don't know that I buy that number either. I don't buy that. I don't know, others big. Others big, but I think the reality is the big players control their cloud, they control their thing. I think people have said for a long time, they've got to control their cloud. Is it going to disrupt some of their distribution channels and some of their partners? Absolutely. But there's no game plan for any of these guys that doesn't disrupt that somehow. And they've got to live with that. We live in a new world of competition. We're going to live in a new world. It's the last true ecosystem in the enterprise IT world. And, you know, this ecosystem is unique. I mean, VM world is like an industry show. It's even though it's VMwares, VMworld, it's really the people's VMworld. So what's interesting about this show is that the ecosystem is actually out there going crazy, going, hey, this is unleashing all this new opportunity from Starros, as we mentioned, to a reconfiguring of restructuring of a federation. I mean, I think people are, I mean, generally not depressed at all about the future scenario. I mean, I think wherever the chips fall, there's growth, right? So people are upbeat. And how about Sanjay's business? I mean, you know, he made a statement. He said the AirWatch will turn out to be the second best acquisition ever. Yeah. I think their business mobility page is very relevant. They put together a really working solution. I was talking with Simon Prosby here earlier and he and I were commenting about Citrix and some other companies. AirWatch and that business mobility story by Sanjay Poonan, it works. They have a workable, viable product line, sets of platforms and tools that actually gets business mobility working where you can have consumerization of IT. Now, it's a starting point. Can it be better? Of course it can be better, but that is a winning form of their onto something else. We're Citrix in this whole discussion. They really didn't come up much this week. They've come up a lot more in previous. Well, they're struggling. I mean, you've got Mark Templeton who's been there for a while leading, going through some transition. So he's not the same leader he was before and they've got Elliot Cap, you know, I've got Elliot Manning in there. We know what they do. Gordon Geckos on their doorstep. We've seen what they do at Juniper. We're seeing what they're doing at EMC and they're in there with Citrix. So I think they're struggling. I mean, they're, you know, to make an analogy, they're in a deflate gate situation. They don't know what the next day looks like because somebody may drop the ax on them. All right, Amazon Web Services. How much of a force? We always love to talk about how we love them and the disruption. Mark Lewis from Formation Day that said, double header, game one's over, blowout, 10-run rule, 10-nothing. Amazon wins everything in game one. Second of... Which is infrastructure as a service. Which is infrastructure as a service. You argue integrated stack and the immersive free-for-all on top of it. Now game two, enterprise. Going on right now, early innings. What's your take on that? I'll see, they're forcing everyone's, hey, we hear Amazon, Amazon, Amazon. Clearly cloud is not only viable, it's happening right now and so Amazon has certainly shown the way. Thoughts guys on Amazon? Well, the fundamental, you know, my take on this, the fundamental marginal economics favor Amazon because of the volume and they are going to win as a result of that. Now, how much they're going to win remains to be seen as you pointed out, it's a huge market but they're going to be number one and essentially are number one in infrastructure as a service. You can argue, okay, Microsoft, we argue Microsoft's number one if you put everything in but Amazon's cost structure is going to be better than anybody's and that is going to give them a huge advantage. So to compete, you either have to have volume, which Microsoft has, or you've got to have some kind of differential advantage. Oracle has that. VMware we heard from AJ today, potentially has that. Potentially, but they've got to articulate that better. But they don't have scale. So they don't have the scale, right? The thing that worries me if we talk about cloud is follow the applications. Amazon has a lot of the new applications. IBM has worked their way into the mix because of all the applications they have. I mean, the cognitive computing, you know, Watson they've got out there, they've got a big ecosystem. Analytics, yes, they're kind of like a Oracle in that sense, right? I mean, Dave, if you look at the raw numbers, you know, IBM is up there in the discussion past Google on where they are in the infrastructure as a service piece. So VMware still, you know, they don't own the applications. So, you know, how do they stay relevant as we go forward? Okay guys, we've got to wrap up here. I want to get some plugs for the events. But before we do that, I want you guys to just give the final word overall on VMworld, you know, in short bumper sticker, what's the tagline? How would you size up this show, elaborate if you want to add color to it? Brian, we'll start with you. So a couple of big things for me. I thought the energy was very positive. Like you said, people are excited, you know, incremental stuff from VMware, but people like you said, that they're excited about the space, maybe for themselves more than VMware has been in the past. And I think they're starting to make baby steps into certain areas, DevOps, you know, applications and so forth. And they're a company with a lot of potential. And the question is, will they get to unlock that potential? For me, I mean, you know, I mean today for me was storage day. And you know, believe it or not, the world does need another storage company, I guess. There's so many of them at this show. That's surprising to me how much investment and activity there is still going on in storage, but it just says that we still got problems out there. Stu? Yeah, I mean, when I wrapped up with Paul Long, we said, you know, there's not going to be one storage solution fits all. There's a lot of growth out there. There's still a few categories that are there. And there's some good innovation coming out. So echoing Brian, there's good energy, solid, you know, the week went better for VMware than I thought it would. And some of the negative undertones were kind of more in the background. Yeah, I mean, my final thought is, is that I believe that I see VMware, I see the muscles flexing, I see VMware standing tall, saying, hey, we are a proud company, we're a bunch of geeks, we're technologists, and we're going to go the next level. And no matter what is in front of them with the noise, they are going to go to the next level. So to me, I think I felt it. I saw some messaging was tight. You see some unification amongst the management team. And no matter what happens with the noise, I see VMware saying we are going to go to the next level. No matter who's running it or which company we're part of, there's a huge future, and that was clear from that. And my favorite analogy was, I forget who used it, I think it was the CIO of VMware said it, he said, you know, the surfers who surf waves, if you're sitting out there and you're letting waves go by, then you're not really productive. But there's two waves to surf now, cloud and mobile, okay, and get on those waves and surf it. And then he kind of backpedaled and I said, well, the beach needs to be cleaned up. So stop playing in the waves and go clean up the beach. So I think that's my metaphor for VMware. There's a lot of stuff to clean up, get everything cleaned up, then go out, have some fun and surf those waves. So if they don't do that, they'll be the driftwood, Dave, and using Pat Gelsinger's analogy. So that's my summary, guys. Thanks so much for that. I want to thank our sponsors. We have a lot of great sponsors, VMware, the list goes on, on and on. I don't know where the list is. I think go to the siliconangle.tv and check the sponsors list out. I want to thank our sponsors. Without our sponsors, we would not be able to be here. I want to thank the team who put this together. We have two awesome sets. Our new innovation is the director set for theCUBE and we're going to continue that format on our larger CUBE opportunities. So appreciate all that help. Next couple of events is the next one is console connect and I got free tickets here. Anyone who wants to go complimentary $300 value per ticket, go to my Twitter handle DM me, leave a comment. Anything just ping me, you get a free ticket to console connect. That's on September 9th, 2015. Splunk.com, September 21st of the 24th and then Big Data NYC is going to be huge this year and what's going on that week as well as Stratoconference is going to be going on in conjunction with Big Data NYC so check that out and we'll be having our special session there at Big Data NYC and then obviously Amazon re-invent October 6th through the night. That's going to be a big show. I know we're, Dave you're looking forward to that one. Pentaho World, October 14th, Grace Hopper, October 14th to 16th, women in tech we're doing a lot of programming there so a lot of great events. Stay tuned to SiliconANGLE.tv for all the extensive coverage and technology. This is theCUBE signing off from VMworld 2015. Have a great time.