 Live from San Francisco, California, it's the Cube at VMworld 2014, brought to you by VMware, Cisco, EMC, HP, and Nutanix. Now here are your hosts, John Furrier and Dave Vellante. Hello everyone, welcome to the Cube. We are live in San Francisco for VMworld 2014. This is our fifth consecutive VMworld. I'm John Furrier, the founder of SiliconANGLE. I'm John Furrier, my co-founder of Wikibon.org. It's dude Miniman, chief analyst on VMware here from Wikibon. Guys, 50 year covering VMware. Dave, in 2010, Paul Moritz, then the CEO laid out the vision. It's morphed, it's changed. Pivotals around EMC, VMware, all the federation, all pumping. VMware transitions the top story. This is all about staying the course. This is the Pat Gelsinger show, who will be on today at 4.30 Pacific time here inside the Cube, wouldn't be live for three days of wall-to-wall coverage here at VMworld. Always the hottest show in terms of action-packed parties, conferences, expert sessions. You name it, it's here, we'll be covering it live. Dave, want to get your take first, VMware and transition. Staying the course, Pat Gelsinger, bringing the innovation strategy to VMware, he quoted on the Cube years ago saying, if you're not out in front of that next wave, you become driftwood, your take. Well John, you're right, 2010, we kicked off the Cube here at VMworld. It was really our big launch. And if you go back to that point, VMware had yet to have a billion dollar quarter as a software company. It now is probably on track to do $6 billion this year. And as you might recall, back then, John, it was all about the ecosystem. Todd Nielsen used to talk about for every dollar spent on VMware licenses. Some number of dollars was spent within the ecosystem and that number kept going up. It was 13 and then 15 and then 18. And so, and at the time, you may recall, there were a lot of challenges, particularly around storage. And so, you saw the ecosystem evolve to address those. Now the messaging is really about taking the data center into a software defined world. And it really is, from a business standpoint, John, it's about, Mark Andreessen says, software is eating the world while VMware is sort of nibbling into its ecosystem. And if you're an ecosystem partner, you got to be nimble and you got to find ways to coexist and so you're seeing that in networking, you're seeing that in storage. And so, things are moving fast. And your point about VMware in transition, we heard Pat Embrace OpenStack, we heard Pat Embrace Docker. So he's got answers to those that could tick those boxes. The one thing you didn't hear and ticked the box on yet is Amazon. Stu Miniman, analyst, been covering VMware for a long time. Stu, talk about Pat Gelsinger's comment about getting out in front of that next big wave. Certainly, last year, he said, hybrid cloud. And I said, is that a halfway house? And he said, halfway house, kind of giving me- I thought he was going to hit you. He's going to, he was very kind of upset. Bad choice of words. He used the word way station. He brings that back in. What's your take? What is that next big wave that VMware is going to be riding? Yeah, John, so as Dave was talking about, VMware's been nibbling away on its ecosystem. And the question is, is there that whale, that shark that's going to come and eat VMware? So what about Amazon? And their answer in Amazon, of course, is the hybrid cloud. VMware has all the Microsoft applications that has lots of the traditional applications. Lots of just extend them nicely. So let's take all of those big initiatives that could really disrupt VMware, like OpenStack, like OpenCompute, like Docker. And John, I think the term you used when we talked about it was let's embrace and extend. So hop on those trends so that the customer says, oh wow, I really think the future is going to be containers VMware. Oh, we're part of that. Come talk to us about it. So they need to get that thought leadership. Of course, the Federation with Pivotal and EMC are trying to get ahead of those trends. But there is the real risk that these technologies can make the hypervisor less valuable in the ecosystem. New applications could pull people away from where VMware is. So John, VMware's timing has always been pretty good. They've walked a fine line between their own stack and the ecosystem stack. And they've been able to evolve that. What's the buzz in the valley around VMware? Well, first of all, the buzz in VMware is significant. They're growing so fast. Look at the ecosystem here. And just the key notes again, they're out growing Moscone, which means that, you know, they're pushing the Oracle level kind of size in terms of relevance. And I brought a little prop today, which was VMware wears opening of their campus in Palo Alto. And you got pens here. I said Pat Gelsinger, Mark Andriesen, they were all there. Joe Tucci was there. Really more signifying that VMware's Palo Alto headquarters really is the center of all the action here in California. And that's a testament to Pat Gelsinger and the innovation of the, that Intel mindset that he has inside his head brings a certain mojo to VMware, certainly pushes the envelope of an already innovative culture, Dave. So it's interesting because Elliott Capital is pushing EMC to spin out VMware, or lessen its 80% ownership in VMware. And so you're intimating that a lot of the innovation is occurring in the West Coast as opposed to the East Coast. Well, I mean, you look at the containers, right? Pat Gelsinger last year, when we pressed them on Docker, because we were ahead of the curve on Docker way before anyone else was. We saw the relevance of that. We pestered them on that. We said, hey, Pat. And he kind of pushed to the side. He brushed, oh, containers have been around for a while. Not a big deal. Well, he said, who's got the best container technology? And he said virtualization. So now you're seeing Docker being embraced. So cloud containers, engagement containers. These are the hottest trends in Silicon Valley right now. And we're proud to be part of that with our engagement container, CrowdChat, of course. The Docker for social media. But Docker, Dave, I want to get your take on this. And Stu, as well, represents a significant shift for VMware. One, it gives Pivotal some legs, Dave. They're already kind of had, you know, their sea legs haven't been there yet. Great vision, but execution-wise, people were saying they don't have a lot of meat on the bone. But with Docker, with Pivotal, Cloud Foundry, Google, you're seeing massive shot in the arm. This gives Pivotal some legs, but also brings the interoperability question to the cloud. That's an IT-centric philosophy. What you're doing. Well, the notion of right wants, you know, run an app anywhere is obviously very powerful. And VMware's angle is what you need is to layer in all that wonderful other security and management stuff. Well, Stu, my question is, does that get in the way from a developer standpoint? Or is that actually what the market needs? Yeah, Dave, when we were at Red Hat Summit, John and I interviewed Docker, and we talked to a lot of their ecosystem partners. Actually, Sam Greenblatt from Dell told us that in that software development phase, that interoperability and getting to work across multiple platforms, you know, is north of 50% of the development costs. So Docker has potential to really, you know, change that development marketplace, which is why, you know, the DevOps guys love it. So three areas. Tim Crawford is watching. Tim, thanks for watching. He's always on CrowdChat, a friend of ours. So, so VMware really out in front of that next big wave. In my humble opinion, they're risk dragging behind. Stu, answer that question for Tim. What's your take on it? Yeah, so, so, right. Is this a defensive move? And in many ways, I think it is. So, you know, VMware, you know, definitely, you know, is listening to their customers. And John, let's be honest, there aren't, most of these 22,000 people here aren't ready for Docker. And Docker's not necessarily ready for them. There's storage issues that are going to be sorted out with Flocker. There's security questions around Docker. You know, if you're Google or Facebook or Yahoo, Docker's awesome, but it's bringing it down to the enterprise. I disagree completely. I think it's an offensive move. Pat Gelsinger does not take defensive moves. If you know Pat, we've interviewed him many times. He's not a defensive player at all. I see Docker potentially in the short term as a defensive move, but it's an offensive move. There's so much at stake. Embrace and extend an old Microsoft adage. That's what's happening here. You skip Docker. Let's give them their victory. Jerry Chen, obviously, an investor there. Great company. Their developer-friendly, open-source ethos of how they're handling Docker. It's been fabulous. And absolutely is the success story of the industry, in my opinion. Well, I agree. Actually, the best defense rights do. I'm sure you've heard the old adage. It's a good offense, so you're seeing that. It was a defensive in terms of the catalyst, but now they go in the offensive. What I'm not seeing is, so VMware, six billion, growing at 18%, Amazon will do maybe five billion this year, growing it, let's say between 35 and 60%. So who's going to get to $10 billion first? Yeah, and one of the things I'd say about VMware and Docker is VMware does not have a ton of credibility in the open-source space. So it's great to see them working on OpenStack, kind of, to need to really dig into that. 30 guys supposedly contributing to OpenStack. Number four. That's great. It's not the billions that we heard IBM and HP pouring into OpenStack and Docker. So absolutely pivotal is more of that open source. So guys, we got to break the intro. We got a busy day here, folks. Thanks for watching. Come to SiliconAngle.tv. Live.SiliconAngle.tv. We've been broadcasting live. We've got great guests. And we have three amazing venture capitalists coming on. Pete Soncini with New Enterprise Associates. Jerry Chen with Greylock and Steve Herrod at General Catalyst. Three VMware alums in tier one venture capital firms. And it's going to be very exciting when you hear from them. And of course, we're going to hear from entrepreneurs. We have Paula Long coming on next from Data Gravity, a Steve Herrod investment, and a ton of other startups, as well as all the senior leaders of VMware. We're going to ask them the tough questions. We're going to drill in, get the data and share that with you. You're watching theCUBE, watch all day, three days of live coverage here in San Francisco. We'll be right back with our next guest after this short break.