 From San Francisco, it's theCUBE, covering VMware Radio 2019, brought to you by VMware. Welcome to theCUBE from San Francisco at the VMware Radio 2019 event. I'm Lisa Martin with John Furrier, welcoming back one of our distinguished CUBE alumni, VMware CTO, Ray O'Fail. Ray, welcome back to theCUBE. Thank you, very happy to be here. This is the 15th annual radio, R&D innovation off-site, really competitive. There's about 1,800 engineers here. Over 1,000 different projects submitted. Only about 15 to 20% may be selected to be featured here. This is the third day or so. Talk to us about some of the projects that really caught your attention as really innovative, that really kind of embodied the VMware culture of innovation. Okay, so the event is an internal event, but it's treated very much in the same way as you would a more formal people submitting papers, being peer reviewed, and then, as you say, a small number of them make it true to the poster sessions or the presentations here. If you look at the broad SWAT that come in initially, they are very broad, covering everything from technologies that VMware has a lot of focus on, whether that's Kubernetes virtualization and so on, but also some that are further afield, like virtual reality, augmented reality. You also get quite a few projects which fall into how can we be better as a company? So better ways of, if we developed our software using this technology or this approach, we'd see better efficiency or ways of testing in new and interesting ways. And I also, for the first time, I think saw a few projects which were more around, less around the technology and more around ways of working together. How can we build teams which work better globally? There's quite a few poster sessions around here about even how to manage and increase the inclusiveness of your team, right? So you're seeing it beyond the technology and it said, how do we as a company become more successful? I think that virtual first is an interesting dynamic. We call it virtual first because no one's actually built technology for fully virtual teams. It's always been kind of collaboration bolted on to pre-existing on-premise activity. Yeah, so our R&D teams, as most R&D teams that you're going to see these are going to be pretty distributed. You're going to have people working from home. You're going to have people in remote sites. You're going to have many project teams where the actual project itself, right down to the smallest team of 10 to 15 people, may well be distributed. So what you've got is very core pieces of code being done by teams who are acting remotely. Now when you think about it, as we work with more and more open source, you're seeing the exact same thing. And like the open source community has worked very well in terms of how do you run those projects? And so we get to learn from that and we've actually created an office for open source, an open source program office. And a lot of what we're trying to figure is how do we make sure to be able to build and leverage that innovation across multiple teams? Well Ray, we want to thank you because I know Radio's been around for a while, but this is the second year where select presses have been invited to get access to some of the projects. So we really appreciate that. As CTO of VMware, you've got to look at the landscape and look at the organic innovation inside, bring the acquisitions in, and then bring it through to the company architecture. Where's the intersection points on the organic to the CTO architecture map? Because you've got a lot of great business model going on now, the clouds looking good, cloud foundation, you have the telco business booming. Where's the action on the business side? Where does this come in? Where's the action happening? So- On the technical business side. Yeah, on the technical side. Yeah, what we're seeing is, well you've mentioned two questions in there. One is about the innovation and what we would do, how do we fit acquisitions and so on into that mix. We've a fairly formal, I guess, innovation program, if I could put it that way, which basically focuses on what do we do to make sure that we have a really strong culture of innovation in the company? And this event is one of those things. It's not just a few days event, the lead up to it, the lead off from it and so on. That really is focused on make sure we have a culture of innovation in the company. We can create new products, new features, as needed from that. But we also recognize that some of those innovations are going to come from partnerships and from acquisitions. Either from partnerships with an open source community or in the case of you saw yesterday, we made an acquisition of a company, Bitnami, which is part of a broader story of us being focused on cloud native applications. What is the best way to be able to manage that new type of development, container-based, Kubernetes-based and so on? So we're open to wherever that innovation comes from. In fact, that's one of the things I really like about the company. We will look at all the possibilities and sometimes, as you saw, even some of the partnerships we struck in the last year, you got to be creative. So I got to ask you about 5G. One of the things that we're seeing is a lot of hype around 5G. I mean, I was in Vegas and said 5G-L-T-A-E. 5G-E, evolution, wasn't even real 5G. So there's some skepticism, but certainly it's a catalyst. How is 5G impacting your business opportunity and the industry? So the telco industry in general was not particularly virtualized if you go back about two years or three years ago. So one of the key things, as people, as telcos are building out to deal with the 5G infrastructure, they're also saying, okay, what do I need to build? Do I use the way I used to do it? And more and more they're saying, hey, I should be able to use virtualization. Why can I not leverage that same technology which revolutionized cloud and the data center? So we're seeing some very good business in that space. Much of it is what you call the telco core, the core infrastructure before you get to the radio networks themselves. But we're also beginning to see even someone not beginning to move out to the radio networks. Like a- Virtualization or software? Well, virtualization even. In fact, at Mobile World Congress in February, I guess, we did some demos of some pretty advanced technologies around network slicing where you're essentially beginning to virtualize the network all the way from the radio network back into the data center itself. And the telcos are certainly from a business I've already been struggling for decades trying to figure out what that over the top, what their business model could be. Will this help them? Yeah, well, any time, you know, our experience is any time you turn something into a flexible software model, within that agility, within that flexibility you get to do a whole ton of advantages. Because you're able to update, you're able to modify. So it's all around flexibility. Everybody talks about how agile you need to be. Well, virtualization, moving into a more software-defined model really helps with that. Let's talk about, back to radio 2019, the R&D Innovation Offsite Radio. Let's talk about customers. How do customers influence projects? Say from last year to what some of the engineers put together, are these engineers that are having a lot of interactions with customers? What is that influence that customers deliver to VMware's culture of innovation? Yeah, it's rather interesting. We more and more, we have customers who come to us and actually are asking the question, not necessarily about products, but about the culture of innovation. A question around, how do they repeat that? Or can they learn something from us? And we learn from them too, but it's interesting that the question has begun to come up more and more as these customers realize we must be agile, we must innovate, or else someone else is going to get them from a competitive point of view. They're trying to understand what we do in that space. So that's one aspect of it. In terms of the projects and what you see here, we do have our professional services organization here. We do have our customer support organization. We do have a lot of our CTOs. A lot of these projects come from opposite of CTO. They all spend a ton of time with customers. We also do make sure, for the most part, that we get our senior engineers to have an opportunity to go out and visit customers, or when customers come on site that we will have those discussions. So there's a lot of customer input into the mix. Where you actually see it showing out, or where you see it begin to appearing more and more, there's a lot of projects here that are deeply systems projects. You'll also find a lot to around pretty basic customer satisfaction things, like user interfaces, ease of licensing, all those types of things. So there's a good balance between the two. You know, one of the things you guys are really doing well in the marketplace, obviously, with the cloud decision with AWS, that was a great message to both your field, customer base, how cloud's going to evolve, then cloud foundation. Now you've got the edge of the network developing, but the software-defined data center NSX is doing well. As you start to get into the networking side, because you know, the pitch we heard at Dell Technologies World was, don't look down, look up the stack. That's where Kubernetes is, and where the action is on the abstraction layer. There's still a lot of work to do with the networking and security piece of it. Where's the innovation angle there? What are the dots that connect on the networking and security side? I think probably the biggest focus is on security. Almost every customer, as they're becoming completely dependent on digital infrastructure, just to get their work done. Like everything from a farmer to a hospital, they're all digital now, right? Security pops up over and over again. You know, the key products we have in that space are things like obviously NSX has a large security component to it, but also app defense and some of the projects we do there. So I think security is probably one of the key areas we see that focus. In some ways, what we're seeing is, customers coming to us and saying, I want to be able to worry about my applications. Can you somehow figure out how to make the IaaS and the virtualized infrastructure and the security as policy-driven, as automated as possible? And that's where we're focused. You know, one of the things I see as a trend, obviously Stu Miniman would love to be also talking about is the hyper-converged HDI, hyper-converged infrastructure, really was a tell sign to what customers want. They want to converge everything into an abstraction. Correct. Into a software model. Clouds, hyper-converging clouds is also another correct multi-cloud kind of objective. So this notion of consolidating and kind of creating abstraction is a trend. It is. I actually think it's really a decision by most customers to say, where do I need to focus all of my bandwidth to be successful? And they're saying, I want to focus on the layer which is specific to my company, the applications, my customer relations. Please somebody help me with all the other stuff. And that's cloud, hyper-converged infrastructure, VMware. Do you feel like VMware's positioned well in that area? I do. I think that in the end, I think we have an interesting blend of whatever, sometimes I use the word agnostic or enterprise pragmatic innovation. We know you want to leverage latest technologies. We know you want to be able to advance in those spaces. But we also know in the end, you are a bank or a hospital and you need to manage that transition in a fashion which allows you to keep your business going. I think we've been very good at helping companies do that. Just to- If I took you on a sales call and I would say a VMware sales rep or a competitor, obviously the competitors will try to counter what you guys are doing. And I was like, we know, we see Cisco out there and others with this competition. There's industries evolving, but you guys have an advantage. What is that pitch to the customer? Why VMware over the competition? Because they're certainly saying that they could do things better than you guys or in vice versa. Yeah. I think there's a few advantages. One of them is our enterprise history, our enterprise readiness. Some of our competitors obviously have that as well, but we are very, very strong across all the world's global enterprises. The other part that you're going to see, of course, is in some ways we've got the ability to be a little bit of a Switzerland in many cases. Our job is effectively to say, abstract, virtualize your infrastructure, make it easy to manage and optimize. And we don't necessarily care what that infrastructure is. Is it a public cloud? Is it a private cloud? Is it a hyper-converged infrastructure? So we're able to offer that unified or essential kind of digital infrastructure that goes across all of those things. And within that, you're giving choice and flexibility. You want to move that workload because you think you'll get a better deal on a different cloud. We will help you to do that or at least make that easier to do. Along the spirit of competitive advantage, besides innovation, which we talked about this very rich history, 20 plus years of innovation at VMware, what are some of the other elements, in your opinion, that companies like VMware need to have to be disruptors? Couple that come to mind when I think of VMware are partnerships and diversity. What are some of those core elements that really are essential to drive disruption? So I often use a phrase which sounds maybe a little bit opposite to disruption, which is resilience, right? Is your company in a position to be able to take either blows from an economy, from competition and so on, and actually take advantage of those in some ways? And the other part of that is leveraging that innovation. As you're trying to say, I want to be able to grow and be successful, can I do something in a way which that innovation is, I use that word again, pragmatic. It fits well with everything you do. I think VMware, in my view, has a very strong culture which leads to that. And sometimes we use the phrase of VMware as a bit of a why culture. People ask why all the time, right? So if I say we're going to do something with Project X, some senior engineer is going to say why. Now it's even more important, is it often becomes a why not? So you look at some of the partnerships we've done, somebody's, where we get into those conversations and the natural thing, well, we're not going to partner there, but then somebody says, well, why not? We could partner there. And after that, you get some very interesting. We get any great distance to the Q and A. So right, why blockchain? Right? Yes, so the key area where we look at blockchain is actually Pat has made some comments on blockchain around it being this key, almost like the IP story for the future of financial services, right? IP networking, from a networking point of view. So what we see is that this is essentially a foundation layer for applications to be built on, not just for financial service, but we see it also showing up more and more in things like supply chain. That's a hard problem. It's a distributed problem. It's a problem where you get a bunch of customers saying, we want to operate as some sort of a group together, but one wants to go on-prem, the other wants to go on-cloud. And that's where we've got that unique ability. IP metaphors, interesting. I mean, look at what IP networking did. This is pre-web, it's internet. Correct, yeah. I mean, what happened after that was just an amazing shift in our world. So you guys see blockchain as a similar paradigm? We do see that. Well, we see it's a layer for which it's become a somewhat ubiquitous layer that then you build these trust applications on top of, right? And so it's almost like a platform layer at that stage. That's why when we look at it, it's almost becoming kind of a software infrastructure story. Well, you know, we love blockchain. We geek out on time. We're going to talk more in depth with Mike. You do, I saw some of your stuff on blockchain online. Yeah, yeah. That's great, thanks. So I saw a tweet from you the other day that of all these poster presentations behind us, you were really trying to, with all these stickers and things, how's your sticker collection coming along? It's going pretty well. It's kind of funny as what you're seeing here is a bunch of engineers who are really passionate about the thing they're presenting. So when I find someone and build little Lego characters, there's little stickers that they build and so on, all trying to push to some degree their passion about what they're doing, right? So yes, I came in here at 7 a.m., taught the place would be empty, but there was actually a bunch of engineers here. But I was getting all these stickers, right? It was just surprising to me, whoa, people put a lot of even artwork into these projects as they try and describe them. Well, and what I think about that is it shows creativity. And it's one of those, you might call it a softer skill, which I don't know why it's called softer skills, but that's essential as the ability to express that creativity. And also some of the other skills like collaboration and learning how to present even better, which are also elements that the folks that attend radio get to work on. Correct, many of the engineers who present here, this will be their first, maybe our second time, presenting to a large group. Now they're presenting in front of 2,000 people, and in many cases 2,000 of their peers, who know exactly what technology they're talking about. So you can't just give some high level, oh, it might be better kind of thing. Someone will say, where will it be better? How fast will it be and so on. So we make sure that if any engineers are looking for training or want to get some help to do those presentations, we spend quite a bit of time making sure they can get that. Because that's part of growing them as engineers and as future professionals, our business leaders. Absolutely, well Ray, thank you so much for joining John and me on theCUBE at Radio 2019. Great to talk to you and excited to hear some exciting things that come out of VMworld 2019, which is just around the corner. That's right, just come up, thank you. Absolutely. For John Furrier, I'm Lisa Martin. You're watching theCUBE from VMware Radio 2019 from San Francisco. Thanks for watching.