 Okay, we're back live here at Strata. We are live, siliconangle.tv. I am the founder of siliconangle.com and .tv. John Furrier with my cohost, Dave Vellante, co-founder of ebond.org, a research team, putting out great data. But we're here in Silicon Valley to capture all the live footage and conversations and knowledge and share that with you here in theCUBE. And we're very excited this year because unlike last year, there is so much live streaming available. We love live video, we love video, we'd love to share that content. O'Reilly has stepped up this year and they're live streaming everything. So if you go to strataconf.com, you'll see O'Reilly's content there. Wanna put out a plug and shout out for the O'Reilly team. They have content, they're doing the keynotes, they're doing the sessions, they're doing their own little news desk in their kind of cube, they have a tricaster, they're doing their thing. And they're gonna be doing how-to interviews, taking all the keynote guys and put them back from backstage, kind of conversations after the keynotes. And that's great. So you got to go check out O'Reilly's content, it's all good. We are theCUBE. Unlike O'Reilly, we're independent of the event, we're covering their event. We love working with O'Reilly, we want to thank them for allowing us to come to their show. They're great people, great content and they're doing a great job. But here Dave, Dave Vellante and I we're going to dissect the trends of big data. We're going to talk about the strata conference. We're talking about news around the web. Our coverage of cloud mobile and social is having a field day these days and I want to bring in our analyst top guy, Dave Vellante. Dave, what's your thoughts? I mean, right now we've got a little break here. Want to do a little riff on the news, which we'll get to in a second, but I just want to ask you before we jump into the news cycle, what's your take of the show? Given the arc of programming we've done over the past year and a half, we've done the original Hadoop world. We were on the ground early with big data. We've seen this industry grow. We were present at creation at the Hadoop trend. We're doing the same thing with DevOps Angle at Node Summit. It's a lot of fun, but here, what is happening? What is your analysis? Give us your take. My first experience with Hadoop was when you introduced me to Cloudera, the company and I didn't know much about it. They had just done their series A and then we went to Hadoop world in 2010 and everything that I'm seeing now, John, is exactly what I would have expected. The buzz and discussions with users, leading edge users like Avi Mehta who at the time was a B of A, it was all very clear to me that data was becoming the new economy. We made that call to invest our time and our energy and our people and our business essentially in data and information, which is something that has obviously been, I've been following for years, but it's different now. It's the data being the center of the universe as opposed to something that you just simply have to store. It's something that's of value and everything that you would have expected several years ago early on is really coming true. Companies are coming out of the woodworks. There are real enterprise use cases you're hearing from people like Amy O'Connor, how they're actually data is the buzz at Nokia. Data is the unifying theme at the organization and that's not unique to Nokia. You're hearing that across. And Nokia needs some help too. They're not, I mean, they had the burning memo, huge scandal at the top. I mean, market leader globally in phones getting crushed over the past two years. But they still are a big force in mobile. So we're not going to count Nokia out, but they've taken their lumps. So mobile business is about big data. Well, and Amy was saying, they started out as a wood processing manufacturer, a rubber producer and then a consumer electronics. So they've remade themselves, reinvented themselves several times. But in the 2000s, there was this sort of yin and yang between information as an asset or liability. And a lot of people treated it much more as a liability and you saw things like email archiving and lawyers really running the show. Now information is clearly shifting. Chuck Hollis wrote a post about this about a year ago talking about how information, really big data, data is becoming an asset. It's really not a problem. It's an opportunity. And I think that's exactly what's happening here. So let's go down and look at the news out here. Obviously we're at Strata. We're live covering everything like a blanket, eight hours of coverage every day. For two days, we had four hours yesterday. We're going to bring you all the action. We're going to have this conference completely fished out, Dave. We'll know everything that's going on. I'm going to share that with the crowd. But let's go out and talk about what's going on in the real world. Big stories happening out there in tech today is, to me, the number one story that's interesting to our business is the cloud fail by Microsoft. Microsoft has had a meltdown of effort proportions and it's being reported on SiliconANGLE right now that the meltdown of Azure is happening. It was a little hard to figure out. Microsoft kind of had this cloud fail, but Mary Jo Foley at ZDNet who's been a pit bull. She's been covering Microsoft up and down for years. She's done some good, intense reporting. So she kind of uncovered this thing. Essentially, today is February 29th. You know what that is, Dave? Leap year, baby. Leap year, yes. So this is like the big bug, right? So there's a huge bug in the system. Remember the big fail? We all thought it was going to happen at the millennial. Y2K. Thought we fixed all that. Yes. So this is the leap year bug. So this is not a joke. Microsoft is failing miserably and that's a big story. We're going to keep track of that. So from that post, here's some quotes I'm reading here. Microsoft said Azure service management problems were caused by a certificate issue triggered on 29th of the day. Originally a date-related glitch with a security certificate triggered by the onset of Leap Day, which occurs once every four years. Well, they have some serious issues because cloud is supposed to be reliable. When we talk about this on our DevOps angle, ops can't have failures. So that's that. The other big news here that SiliconANGLE's breaking is that Enterprise social networking platform, Yammer, Yammer raises $85 million. That's absolutely insane. That is such a huge amount of money for a social platform. I've interviewed David Sacks here, actually at the event at cloud. I couldn't get that on the net because I had a little bail myself with the camera, but David Sacks is the CEO, PayPal mafia guy, great guy. Yammer also competes with Jive, who we've interviewed, and Jive went public. Yammer wants to probably do the same thing. So my guess is that when companies raise that kind of money, Dave, here's my take. And again, this is just my opinion. I have no data. This is just my first gut reaction. When I see a company like Yammer raise $85 million, you know what I say? I think immediately, I think they were negotiating an M&A deal and wanted to have an offer to raise money and they couldn't get the valuation that they wanted. So when you're in that kind of negotiation, you want to say you're going public and then if you're not gonna do an M&A, someone wants to buy you out, you want to negotiate a good price, and then they justify the valuation based upon the quote market raise that they want to do. So my guess is that they were negotiating an M&A deal and they raised this financing as an option and just basically saying, you know what? We're either gonna get bought out for a huge number or we're gonna go public like Jive. So in the comparable Jive when public, so I'm sure this valuation was given a gift from Jive. So I don't have any performance numbers. We're gonna dig into it. Clint and Alex are all over it and we're gonna have more from that. The Dow is not holding 13,000. We reported yesterday, everybody's been talking about Dow closed above 13,000. It's down under that. So we'll see where it closes today. But it's interesting to see what it does in the last 15 minutes, half hour. See if it can rally, but... So other news, RSA news, Cloudflare talks about Lulsec while they attack Sony and much of the rest of the world. So that's interesting. Kit is all over that. Yeah, Enterprise Tech is generally off today, John. Apple's up, of course. It's the hangover from the new iPad announcement. People are excited about that on what is it, March 7th? Mark, yeah. March 7th, that's coming. I see Nirvonix had an announcement today. Do you see that? They're basically leveraging the notion of higher disk drive prices, right? So as people recall, this was a big disaster in Thailand. That's where many of the disk drives are made. So there's a huge disk drive shortage. Prices are going up. HP reported this, Dell reported this. So Nirvonix is coming out saying, hey, we sell data from the cloud, paid by the drink. Don't worry about rising disk drive prices. We're prepared to support your capacity needs. We have not raised prices. What do you think about that disk drive business? I mean, because basically what everyone at Disconverse is talking about, and it's been kind of an amorge law kind of thing where prices of drives are dropping. Flashes around the corner, but with the disaster in Japan, you have some serious supply constraints. Well, so Thailand, but then it's interesting. You mentioned Japan as well. And remember, after that tsunami hit, Nirvonix said it moved some customers' data from the clouds in Japan off the island to a safer location. So it just to me, it underscores the flexibility of the cloud. Now, it depends on what type of data and how much data you can't go moving a petabyte, very quickly, but for certain types of data, you can leverage the cloud and have this sort of approach where you've got globally distributed data centers and protect your data. So a new paradigm to data protection. Okay, we're here inside theCUBE. This is siliconangle.com's flagship program where we go out to tech events and we go out and do in-depth coverage of these most important tech events in the business. And we talk to all the thought leaders, CEOs, entrepreneurs, anyone who's got the signal from the noise, we want to broadcast that to you and share that knowledge with you. And we would not be able to do this without the support from sponsors. And now we are ad supporters. I want to thank the following companies who helped us get here with, and you'll see their ads roll throughout the day. Cloudera, Digital Reasoning, 1010 Data, and MAPR. I want to thank those guys, MAPR and 1010 Data. You guys have been great. Thanks for helping us. Thank you very much. Dave, let's talk about Cloudera because Michael Olson, again, has been on theCUBE multiple times and been a big supporter of us. Their business has grown. You guys reported their revenue, although they're a private company and Mike would not comment on the record. They're doing about $18 million they did last year. Yeah, we have just under 20 million. Just under 20 million, as you guys had triangulated on. What do you think they're going to do this year in revenue? I mean, given their trajectory, we heard from rumblings inside the hallways here that they are exploding with real estate. We have the market doubling. And so I would think that Cloudera will at least double, maybe grow somewhat faster than the overall big data market. So that would surprise me. Are you going on the record to say what? They'll double sales. I think they should. I think they will. I think the fundamentals are there. I mean, why shouldn't they double or more? I mean, I think that the wind is at Cloudera's back. Now, a year ago, Cloudera had no competition. To me, competition is a good thing because it validates the market. It brings alternatives. It makes the leader sharper. And I think that... Actually, you know, Amar Awadallah, who was on theCUBE and Strata last year when we were here basically said the same things. Hey, we love you guys, but now you've got competition. His direct quote was, competition is good for us. We, it challenges us and validates the space. And you know, Hamabakar at Hadoop World said something that I thought was interesting. He said, hey, the more people that are contributing to Apache, the better. I'm all for it. And I like the attitude. They got a great attitude, great culture. And you know what? They've shown that a good management team and more importantly, a culture that gives back to open source 100% can have a business model with a licensed approach, a premium, a freemium model, I guess. But more importantly, they have a great set of people. They hire good people. And so, you know, congratulations to Mike Olson, Amar Awadallah, and Kirk Dunn over there, and the folks at Cloudera, who we get to know personally. I mean, we've been talking about this for a while. We had Jeff Kelly on yesterday. We were handicapping the horses on the track. And we did this at Hadoop World last year and we were making a big deal out of the whole, get competitive distributions. But we kept coming back to Cloudera as the favorite. So I think it's theirs to lose. You know, they're the hot startup, but they have a good reason that they're the leader. They're executing. They've got really great jobs. They've got fantastic people. They're contributing a lot to the open source community. They understand the use cases. They've got customers like Nokia that are actually, you know, buying product from them. So they're, you know, they're not out trying to figure out the business model. They're actually doing it. And I'm impressed and they're growing. You were telling me the other day that they're moving, they're expanding next door to... Yeah, I mean, it's going to go down, I think in Palo Alto where I live and I shared space with the folks out there for the folks who know me, know that. For the folks watching for the first time, Silicon Angles office was in Cloudera for a year and a half. Amra Awadala invited us in as part of Cloudera Labs with a slew of other rock star entrepreneurs and A-listers. And I got to know them when they had 30 something people in the company and less actually when they first were funded. And when Amra was an EIR at Excel Partners. And, you know, I watched as these guys grow and their little stretch of office space next to Frize and Palo Alto has two companies there that might go down as being kind of like the space that all startups want to get because the two companies that went in there grew massively. That's Box.net and Cloudera. So those two companies, Dave, have done good in that little warehouse space next to Frize. And of course, next to Frize, you can always pop in and get whatever you want. I spent more money in Frize just walking over there. I think they know me by my first name over there, just walk in there and have lunch and pick up little goodies there. So that's a good office space. So again, Box.net moved out of their space. They just grew like a weed. Cloudera is now going to take over that space. So that's actually an exclusive report from Silicon Angle that you're hearing here at Strada. Cloudera is moving literally next door to Box.net space. So that news is breaking right now on Silicon Angle. Get someone to write that up, Mark Hopkins. That's good, it's funny news. No, but all seriousness, Cloudera and Mike Olson brings to the table is some interesting conversations. And Scott before him from Pure Storage brought up this notion that flash is at the early days. Virtualization flash and big data are really a new generation of enablement from a tech standpoint. And Dave, let me share you my vision on this because you guys also know this because David Floyer, you and I talk about this all the time. We're having a throwback and a comeback for systems guys. So me being a systems guy by training and practice is the old operating systems guys, guys who know distributed networks, know distributed computing are the guys right now. So if you have systems background, you're in demand for work. But more importantly, that's going to change the architecture of solutions. Systems architecture is completely taking on a whole new dimension. A new canvas of creativity for systems architects taking over this cloud and big data and mobile space. So what Mike Olson and Scott Detson are talking about really in my mind is we are going to see a massive surge of systems developers looking at flash, looking at these raw technologies as raw materials and with data, virtualization, flash, storage and conversion networking, you are going to see some serious systems to programming going on in a whole new level. So that's an operating system opportunity that we're going to see startups be funded so as I make my angel investments I'm telling you right now I'm going to look for guys who have systems plays. And also Scott Detson brought up another point that I would totally agree with. I've been talking about with you and on my blog about networking being the bottleneck and data being the bottleneck but actually Scott at Peer Storage really kind of nailed it. He said, listen, you can talk about that all you want but the bottom line is spindling disks of the bottleneck Dave. So I mean basically I guess that's totally the truth. Storage with moving parts is absolutely has to go away. So Paulie Nist from Intel had the best line I thought last year at Oracle Open World. She talked about the horrible storage stack. Now what she means by that is two things. One is disk spin. So you got electrons moving at the speed of light inside of computers, inside of servers and then you've got this spinning disk. I mean it's orders of magnitude slower. Number one, number two is over the years all the protocols that have been built up to make sure that data was stored properly. I've got it, you take it, all this two face commit type of stuff, analogs to the disk drive. All that stuff builds up the storage stack which just slows everything down. And so what Fusion IO has done for example is it's written software to just fast path directly write to memory as an extension to this persistent device. And so the second thing I'll mention about that is the systems expertise. For the last 20 years we've seen function move out of the host server into the disk array. For a lot of good reasons, sharing and data protection and replication, all these other good things. We're seeing it move back now. And as it moves back, systems expertise and IO architecture expertise is in demand. It's going to change, it is changing the way in which applications are written. Talk about HP for a minute because one of the things that HP has not known for, certainly they have never been known for great storage really until they bought three par, right? So HP buys three par which we broke and covered. But talk about the transition because you and I were joking at the HP event that oh by the way, those servers might have a little storage in them. Or hey, these storage might have a little servers in them. The tail is wagging the dog as we always say here in the cube. So talk about the transformation of storage. How it's taking over the server. Is that what you're saying? Well it's interesting at the HP project voyager announcement which SiliconANGLE covered with the cube we saw their first really pillar, what they call them, first pillar of their messaging was data and the data explosion. These are server people talking about data and beginning to architect servers to accommodate that problem. And it's just the beginning. You're right about HP. I mean when HP hired Donna Tellian of course there was a big rift with EMC and he couldn't do storage for a year. Well he's doing storage now. It's a high priority for HP. The three par acquisition was his baby. Three par is crushing it by the way. HP didn't have a good quarter. And virtually everything was down in Donna Tellian's organization. I happen to believe that three par is still growing at probably close to triple digit growth rates. So three par was in my opinion a phenomenal use of cash much better than autonomy for example and is really just exploding. I think three par, Vertica is another asset that HP acquired that is I think really right on. You saw Jeff Kelly's report, the big data analysis. Vertica was the number one pure play big data player. Cloudera was in there at just under 20 million. They are the leader in Hadoop and my expectation is that Cloudera will surpass many on that list probably not Vertica but Cloudera is going to be right at the top and they would clearly be number one when Jeff does his Hadoop segmentation. Dave I want to talk about something I wrote today on Forbes and Forbes.com and also on SiliconANGLE yesterday that the data movement is creating a massive surge in entrepreneurship and also business but the side effect of the big data trend is services. We're seeing a massive surge in services and consulting from new guys and existing players like EMC and new guys like Cloud Scaling among others and we had think big analytics on here earlier yesterday. Services is big, we obviously knew that because we launched services angle.com and dedicated online publication to the changing ecosystem of services because there's huge dollars in there. It might not be sexy but I'm telling you there's a huge thing going on in the services business. So it's the perfect storm as I said in my Forbes post today. You've got products and services completely going vertical in terms of growth. So that being said, I want to get your angle on the services market and two, we wrote a post today on services angle where Alex wrote Spring Hadoop Signals on Mature and Ecosystem. We had Pedro, a data scientist from EMC on yesterday on here on the Cube. Pedro and Sousa, yeah, he's very good. Sousa, he announced VMware Spring Hadoop Framework today at the show. It's coming under the Spring umbrella, fitting with a standalone Vanilla MapReduce application. So Hadoop is maturing. You have the big guys coming in, extending, integrating into Hadoop. What's your angle on the services landscape one and two, the second one is talk about VMware and the impact that they're going to have with the open source frameworks. All right, you're going to have to take a breath because I got a lot to say about this. So first of all, probably one of the greatest transformations in the history of the computer industry was what Lou Gerstner did with IBM. At the time, I actually wasn't a fan of it. I thought the world was going to more of a product and I was a fan of the idea of spinning out the various divisions. Gerstner said, no way. We are a single point of contact company. He transformed IBM into a services company and they bought Pricewaterhouse Cooper's PwC, which Carly Fiorina from HP wanted to buy. She got shot down. It transformed IBM and IBM went on a 10 year journey to transform that company and now is a very powerful services company, the biggest services company on the planet. Clearly from a financial perspective, IBM is delivered to its shareholders and that has proven to be one of the greatest turnarounds in corporate history. We've seen HP try to attempt to follow that game plan several years later, a decade later with the acquisition of EDS. They haven't fully figured it out yet. They're still sorting that out, but I think that ultimately they will. It's not an easy thing to do in a short period of time so it's going to take time. Services is a very profitable business. It doesn't get a lot of glamour in the VC community. It's not a 5x revenue multiple but it's a fantastic cash flow business. You're seeing that with EMC. If you look at EMC's financials, a big contributor to their financials and their free cash flow is services, global services. Boring stuff like support. You've had Tony Kholish on theCUBE before talking about how they're using chat and how they're innovating and then consulting. We had Tom Roloff in theCUBE and Marlboro recently talking about some of the things that they are doing, EMC are doing with regard to consulting. You don't think of EMC as a consulting company but increasingly companies like EMC and certainly Oracle, certainly IBM and HP are becoming advisors, strategic advisors to CIO. It's the tip of the spear. It's the entrance point within the organization to get huge leverage out of that consulting and what are they helping them do? They're helping them figure out cloud security. They're helping them figure out big data. They're helping them transform to IT as a service. So that is strategic. If you can be the strategic advisor to the CIO and to the business, you are in the cat bird seat to sell more hardware and software and services. So services to come full circle, we launched services angle last year. Alex Williams is editor-in-chief, Clint Finley and now Matt Weinberger is on the case. That is all about the intersection to me of the old and the new. The legacy services business, the break fix business transforming into platform as a service, cloud as a service and software as a service and it's the intersection between those two worlds and that's really where the rubber hits the road in terms of business value. It's all about services. Talk about VMware and EMC. I see VMware announced their announcement with spring. What's your take on that? Well, I'm gonna answer a little differently. Well, I wrote a post just the other day. I think it was yesterday actually about I was dissecting on the airplane EMC's 10K where EMC had to release because VCE, the joint venture between VMware, Cisco and EMC is now large enough that EMC has to report in its financials what's the contribution of VCE. It's portion, which is like 58% of it. Bottom line, it's all about making VMware the standard platform. You and I have said a number of times that EMC slash VMware will be the next hundred billion dollar market cap company. Now maybe SAP will beat them. SAP's I think at about 80 now, EMC and VMware combined are probably pushing at 60 or 70, so right there with them. They will be the next infrastructure play anyway that's over a hundred billion dollars. How are they gonna do that? They're gonna do that by making VMware the standard everywhere. If EMC does that, EMC wins because it owns VMware and it can invest in integration. And again, be in the cat bird seat. Now add to that frameworks like spring. You're seeing, you called this, John. You're the first that I had heard mention this. Meritz and Gelsinger are Wintel, or Gates and Andy Grove, coming together under one umbrella, which is EMC VMware. And they are basically, what Meritz is doing is taking a page out of Microsoft, except that it's a modern day page with VMware as the data center operating system. They've got all kinds of development tools and development frameworks on top of that and even applications, which is probably the weakest part of this, but that's the developers that really, as we know with DevOps Angle, are really driving a lot of the innovation. You know, Dave, you're right. I did call that, called many things successfully, but more fun for working with you in theCUBE and to look at Angle and keep on, is that we had the luxury of having the right editorial focus being open source content and you're being open source content by getting to VMworld 2010. When we did the first Cube at VMworld 2010 in San Francisco, we did EMC World and Sapphire before that. That was really at the beginning of the sea change, where you saw cloud, not being about cloud computing, being about this generation of entrepreneurs that we're in right now. So two years later, this market is direct result of those guys at VMware. Mike Olson was just, they were a blip on the radar with Cloudera in 2009. So it was that investment, it was those cultures, those mindsets, VMware's position with Joe Tucci at EMC, looking at this new Microsoft Intel collaboration. It's no coincidence that Pat Gelsinger is the president at EMC. It's no coincidence that Mike Moritz is the CEO at VMware. Paul Moritz. I mean Paul Moritz, sorry. And I'm hearing a ton of people tell me that essentially all the ex-Microsoft guys from the early days of software are moving into VMware. So silent little migration going on, okay? And this is interesting, right? All the players are switching teams, right? You've got everyone who's at Microsoft came from search, came from Yahoo. Everyone from Microsoft search, MSN, is at Yahoo. Everyone at Microsoft software is moving to VMware. The question is no one from VMware is going to Microsoft. So a lot of guys, when I say guys, I mean like the talented dudes are moving to VMware. Why? I mean Paul Moritz has got the chops. He's the technical guy. Steve Herrod, VMware's got an amazing tech team. And like Cloudera, technical teams will trump everyone in this economy because it's a massive tsunami of innovation. And the big trends are at their back. I mean IDC is reported and you hear Moritz talk about this all the time. We've had some folks on IDC on theCUBE that there's more virtual servers now shipping than physical servers. So what does that tell you? That tells you that's where all the action is. We're talking about enormous market here for hardware, software, and services. One of the things that I took a stab at was just sizing the enterprise hardware, software, and services market for this whole converged infrastructure. And we're talking about a $400 billion total available market. So it's just absolutely enormous. Okay, now that I'm done smoothing over VMware, let me tell you what I think VMware's got some serious problems. VMware right now has no big data strategy. It's completely void. They have an architecture. We saw Spring really fit nicely into Moritz's architecture, but Dave, I see no big data strategy. And I think fundamentally, VMware needs to decide how the flash component will play in the architecture. What's the layer does it sit into? So as Scott Tetsin pointed out, you're going to see a data ISV, you're going to see new applications. VMware needs to architect their platform to enable applications to hit the marketplace. And I believe as we speak right now, they are in conference rooms, arguing and throwing tomatoes at each other about where to put the data layer. Do they put it into the server? Do they put it in the storage? So I can't wait to see VMware's big data analysis. I love this narrative, John. I think you're bringing up a great point. And here's the interesting thing about EMC, the storage company owning VMware. When basically EMC pushed out Diane Greene and brought in Moritz, VMware started playing nice with EMC. There wasn't all this friction. And what's happened is that they've really leveraged that to EMC's advantage. The question now becomes, if you're VMware and you're a software company, you don't really want to have a hardware company telling you what the right thing is to do. You want to go in your right direction. And of course the EMC would say that they leave VMware alone and they're largely autonomous, et cetera, et cetera, et cetera. But we know better. Well, VMware is autonomous and they make a lot of decisions, we know EMC wants to leverage that. So here's the question. Take a company like Fusion IO, which has this incredible innovation which takes advantage of server side extensions of memory. All these players coming out with flash. And then here you have EMC announcing VF cache. That's going to be really interesting to see how VMware and EMC and the ecosystem play out. VMware's in the driver's seat right now because they've got all the market leverage. But they have to be careful. They have to walk a tightrope and they can't basically cut out the ecosystem and favor their owner because that will tip the balance and people will get scared and start running away. So I've been hearing Joe Tucci, and maybe I'm breaking news that I shouldn't be breaking right now, but this is the cue. We talk off the top of our heads sometimes. I heard a rumor that Joe Tucci is not stepping down for a long, long time and that he is going to hold off making a decision for the CEO job. So they announced they're going to extend it a year, right? They're saying it could be more than a year. Well, I mean, I'll tell you. What does that mean? If I were a shareholder or a board member, I'd want Tucci to stay on for a little bit longer. I mean, he's doing a fantastic job. I think he's energized, right? The word I'm hearing from EMC is that he loves what he's doing. VMware is his crown jewel, right? And VMware is doing great. Greatest acquisition in the history of the computer. The question is, will VMware be able to surpass EMC in revenue? I know you called it. I want to bring it up again. Well, so in terms of market value, right? So right now, I mean, I've written about this a number of times that the vast majority of EMC's value comes from its ownership. It's 80% ownership of VMware. That's why I've consistently said EMC's undervalued. If storage company stocks are going up, the core value of EMC has actually been flat to down over these last couple of years. EMC is like that company. It's like the Caymans Islands. They've got these weird structures. They own VMware. How do they recognize that in the books? What's going on? How do you measure the value of EMC? And now they've got VCE, okay? You wrote a post yesterday, or was it Monday? I can't remember. Was it yesterday? Wasn't yesterday Monday? I can't remember. So VCE is the collaboration joint between Cisco, VMware, Intel, and EMC, okay? And it's really an EMC-driven initiative. The CEO of that company is Michael Capellis, CEO of MCI Compact, and now the CEO- Cube alum. Cube alum now, he's been on the Cube. He's a stud, right, in terms of executive. VCE is really targeting that V block, or the converged networking and storage. Could you please share with the crowd the astounding numbers that EMC is recording in revenue because of VCE? Well actually, so- Just give us the breakdown because it's basically a huge startup and it's crushing the numbers. So they announced that on their last quarterly conference call that VCE exited the quarter at $800 million run rate, implying that more than $200 million was done in the fourth quarter of 2011 by the joint venture. Now EMC announced that, and it's 10K, that I squinted through in the airplane out here, announced that it did 133 million in revenue last year. So I backed through some of the numbers and I've estimated that VCE as an entity booked around a half a billion dollars last year, so that $800 million run rate. And I really do believe that you're looking at an entity that's going to be enormous. Now the issue is that EMC is invested like crazy, probably close to $400 million in the joint venture. Big numbers. My argument is this is a much better use of EMC's cash than for example, a dividend or share buybacks. As an observer, I would much rather see EMC invest in buying innovative startups and incubating things like VCE and going after big markets like converged infrastructure, which is a $400 billion market, then do share buybacks, which I don't think is the greatest use, I mean it's a financial trick, right? You know. Well they'll bump up, they'll lower their flow there. And they have to do some of that, and I understand. And they have to do certain things to buyback VMware shares so they can keep their 80% ownership, they've got to do things like that. But they're throwing off so much free cash. I think VCE is the right investment, here's why. They don't play directly in the server market, they play indirectly through VMware. So they're going after IBM, HP, Oracle, and Dell in a $400 billion market. John, if they can get 5% of that, you're talking about a $20 billion market size for EMC and its ecosystem, that's the size of EMC today. So in my view it's a good investment, but they are doubling down. EMC and Cisco are doubling down, they're making big bets. Tucci is all in on this one. Okay, we are here inside theCUBE. I'm John Furrier with Dave Vellante, my co-host. I'm the founder of SiliconANGLE.com and Dave's the co-founder of Wikibon.org. We are bringing you independent analysis and commentary. O'Reilly has great content, they have live streams all over the place. 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