 From theCUBE Studios in Palo Alto in Boston, bringing you data-driven insights from theCUBE and ETR. This is Breaking Analysis with Dave Vellante. The FTC continues to drag its feet on approving Broadcom's acquisition of VMware. And ironically, in our view anyway, these delays only hurt the very competitive environment the FTC claims to be protecting. The AI era is accelerating at a breakneck pace and the big three hyperscale cloud providers already have a sizeable lead on legacy incumbents. If preserving competition is truly the agenda of the US government, it should recognize that VMware and its enterprise ecosystem and market forces have the potential to neutralize cross-cloud complexity and give customers a viable alternative to increasingly powerful public cloud players. Hello and welcome to this week's Wikibon Cube Insights, powered by ETR. In this Breaking Analysis and ahead of VMware Explorer 2023, we revisit our views on Broadcom's rationale and likely actions post-acquisition. We'll share current ETR survey data to place VMware's position in context to the major cloud providers and speculate on its AI agenda and give a preview of next week's VMware Explorer. And to do so, we welcome Cube Analyst Rob Streche and friend of the Cube, Zia Scarabala, principal. ZK Research, welcome guys, thanks for coming in. Hey, thanks. All right, first thing is we want to briefly revisit why VMware fits with Broadcom's strategy. Broadcom has a dizzyingly successful track record of M&A, LSI, Symantec, Emulex, CA, and dozens of other firms that the company's CEO, Hawk Tan, has orchestrated. And as shown in this Broadcom slide, the company looks for leading firms with a sustainable advantage, large install bases and proven predictable operating histories. Broadcom, as shown on the highlight in the corner on the bottom right is targeting 8.5 billion in pro forma EBITDA post VMware acquisition contribution. So that's pretty significant. So some of the things Hawk Tan has said about his strategy in the VMware acquisition are shown here. He said many times, for example, we don't compete in CPUs. We don't play in games that we can't win. He's laid out his premise for VMware, a multi-cloud approach for customers that absolutely need or want some portion of their data to stay on-prem. He used that term sovereign cloud, which is a playoff of the phrase data sovereignty. And the last point here is he recognizes the importance of the ecosystem and extending VMware's value proposition and providing alternatives to the public cloud, which are clear indication that Hawk Tan understands and values VMware ecosystems. So there was hope that the VMware deal would close by VMware Explorer. Broadcom has said it's going to close by this fiscal year, which ends in October. So maybe not, maybe it gets pushed to next fiscal year. But guys, what's your take on this acquisition and the impact of the ecosystems on customers? Let's start with you. Yeah, it was an interesting acquisition because it's the same but different, right? I guess from a broad-com perspective, it is the same in that it is a big software company with a massive install base, big maintenance stream. And so there's a lot, generating lots of money like the other acquisitions. The difference is though, when I looked at those other ones, LSI, CA companies like that, those are companies that were long past their prime. And people were saying that about VMware and you could still make the argument that the virtualization industry is. But I do think that there is a, to your point with multi-cloud, there is another wave of growth coming from VMware. Something does have to normalize the complexity. And I think VMware is in the ideal position to do that. So from a broad-com perspective, this will be the first acquisition they made that actually has a pretty significant growth opportunity ahead of it where I look at the other ones and they were more maintenance plays and just mining it, milking it for cash, right? And but I think VMware to me is the first strategic acquisition that broad-coms made in the software space. Yeah, and so they're going to basically take their current broad-coms, current software business, roll it into VMware and call it VMware. So basically it's going to be half the company, broad-com, which is chip maker, half the company is going to be software. Yeah, and I think that's the interesting play for them is that it's really going to be about how do they rationalize their software stack? And I think that we'll probably get into that a little bit later on, but I think what's going to happen is that when VMware becomes the software stack, they have to rationalize the CAs and some of the other acquisition they've made with some of the pieces that they're picking up from VMware as well. So it's interesting what you said about sort of sucking up the cash, because Hocten sort of bristles when people like us and other Wall Street analysts say that, he actually would argue that, no, what we do is we narrow down the focus and then we invest, and essentially what he's saying is we identify companies with a moat, and we give them enough R&D pipeline so that the business case for leaving is worse than the business case for staying, and we're going to talk about what that means for VMware. I mean, VMware is a successful software company that threw off enough cash to keep EMC independent for much longer than it really should have been independent. Cisco should have ended up with VMware, let's face it. But it also allowed Michael Dell, Tom Sweet and Jeff Clark and the whole Dell team to fund this remarkable transformation. So if you take a look at a side-by-side comparison of Broadcom and VMware to project what the future might look like for the VMware P&L, this chart shows the 12-month trailing revenue and other key metrics for the two companies. So for people not familiar with Broadcom, this snapshot, it's astounding. Broadcom's a $34 billion company with nearly 50% free cash flow margin, and they only have 20,000 employees. So it's revenue per employees, 1.7 million. That's remarkable. I'm not sure I've ever seen a company with that high revenue. Uber, which I thought was the highest ever is 1.2 million. So it's financial performance is why the company's market value is like 10x revenue. It's just amazing. VMware on the other hand is a $13 billion company. It's got 38,000 employees. Now it's revenue per headcount is 350,000, which is actually really good for a software company, but given Broadcom's pro forma targeted, 8.5 billion of EBITDA contribution, that means something's got to change. They're going to be blending that's more closely aligned with Broadcom's financials. What do you think is going to happen? Post merger? Well, Broadcom has stated that they'll let VMware be VMware. And I think it would be a mistake to do anything, but I think the reason VMware's revenue per employee is down so much that they pour so much money into R&D and things like that, right? And so if indeed Broadcom is buying VMware for strategic purposes and not just to suck the money out, then I don't think they can get that, maybe they can bring that revenue per employee up a little bit, but to do anything other than leave it the way it is, to me, would be disruptive. I think they can rule on some of the software assets. But VMware, like you talked about at your opening, we are, to me, we're right at the beginning of the true multicloud era, not multiple clouds, like we've talked about, but multicloud. Someone's going to be the big winner out of all this. VMware is an excellent position to do so. And I'd hate to think Broadcom is going to come in and disrupt that opportunity. Yeah, I think they will attack the denominator on the head count because they're not going to need as much marketing. I mean, Broadcom doesn't do a lot of marketing. This whole industry is marketing driven, though. You know, the- But look at Broadcom. I mean, basically what they do is they narrow down the focus and they build a pipeline or a roadmap and say, here you go. I think what's going to happen, Rob, is Broadcom's basically going to go to VMware customers that are all afraid that prices are going to go up. And I think Broadcom's going to say, do more with us. And it's like Nvidia, buy more, you'll save more. Do more with us and we'll give you a better deal. Well, the one thing Nvidia has proven is the systems approach does work. If you can build good engineered systems that takes the complexity out of deployment, customers will pay a premium for that, right? And so if you can take more of those Broadcom assets, put them together, and deliver things like a hybrid cloud, proper cloud, and a systems approach, much like Nvidia does with AI, there is a lot of value in that. And that multi-cloud is incremental. And I think it becomes a, which pieces are the true misfit on the island by themselves out of this whole group? And is it that you're looking at some of the NSX software going more towards Silicon and more towards their core? Because they do a lot in networking as you said with Octane saying, hey, we're not in CPUs, but they have a lot of fabric for AI, for instance. And I expect that when they come around and start talking AI this next week, that they're going to be looking at those efficiencies and how they bring some of those efficiencies together. And I think reorganizing in there, not necessarily getting rid of things per se, but maybe getting some more leverage out of the selling, for instance. Like you said, marketing, sales, and how they actually sell the products may change drastically. Yeah, I think a good example might be, we talked with this when prepping, last year, a year before they bought an AVI networks, instead of selling that as an independent, cloud-based load balancer, just build it in to the private cloud stack, right? And so don't have it be a separate product that you sell, but use it as a building block to build that system. Integrate it in, bump up the price a little bit and say, hey, this is the value, because the furrier pointed out on the CubePod yesterday, there's a lot of shelfware in the VMware stack and people, it's there, but they're not utilizing it. They may or may not be paying for it. And so if you actually can give them incentives to do so, that might be the playbook. Broadcom has pointed to phase three of VMware's growth as multi-cloud and a platform for applications. So this slide was created before the AI craze, so there may or may not be some marketing adjustments to Broadcom's positioning. Regardless, we know VMware is focusing on solving multi-cloud chaos. So two questions to you guys, how much of a problem is multi-cloud for customers? And can the second piece of that, this chart here, is can VMware actually be an application development platform and a viable alternative to the public clouds in that context, Kubernetes, OpenShift, Tanzu, all kind of competing? I think they have an opportunity, but I think there's things like Kubevert and others that people like Red Hat are getting behind. And by the way, 80% of OpenShift is deployed on VMware across the world. So when you start to look at how their ecosystem, I think it's gonna be an ecosystem play for them to be that multi-cloud. I think that this is a place where they, again, narrow their focus down is to look at how do we focus what we mean by multi-cloud. And so you start to look at the different pieces that they have there and some maybe to odd items out in that multi-cloud. But I think the management stack in particular and having that multi-cloud management stack, it'll be interesting to see how that play because CA sort of plays in some of that from an app monitoring perspective. Sort of. Sort of. Bring some more credibility. So maybe it's not necessarily the VMware stuff that's out. Maybe it's some other things that get cut along the way to actually get the margins up on the VMware stuff as well. But Zia, as you see multi-cloud complexity as an opportunity, you know, we sometimes would call it super cloud, but is there a market there? Oh yeah. I mean, the vision of multi-cloud, especially with the rise of edge computing, right, is to be able to have a single cloud fabric that spans multiple cloud providers. And it would actually create more competitiveness. And the fact is, you got to go to somebody for that. And it's not the cloud providers. AWS tools don't work in Azure. And Azure tools don't work in GCP, you know, and so on. In fact, if those three companies actually got together and had true federation, I mean, they would. They don't have market. Yeah, they would, but they won't. But they won't, right? Yeah. So seriously, opportunity. So somebody has to act as a normalizing factor. And I've always said that the kind of magic behind VMware is vCenter because it has become the de facto standard control center for the data center. And so when you started to see containers rise, right, people wanted to run VMware integrated containers because you could use vCenter as the control point. And I think if you're going to think of this multi-cloud or super cloud as an extension of your data center, then you would want to continue to use vCenter as that control point. You can make the argument you don't really need the hypervisor layer in there, right? And even the concept of VMware integrated containers, some downplay that, but from a management perspective, IT pros are comfortable with using vCenter and that's their lock-in. And so from there, they can build everything from that. Yeah, you're right. That's their moat right there because people are comfortable with it. All their processes are built around it. All the scripts are built around it. And I think they've lost part of the moat and I think it's a delay where they're in these other clouds now. So they're not only going there, if you go into VMware on AWS, you're going into the AWS console. So you're not just in vCenter per se. You are provisioning through vCenter your VMs and you have that experience, but you're still going in there and doing things within the AWS. The clouds are slowly sucking away that value which is kind of always there intent. But I think there's an opportunity. But it's win-win. Yeah, I think there's an opportunity for them to actually do that integration themselves and kind of eat some of their own, I guess you could say, to get more, I guess, control and account control over that. And frankly, why would the cloud providers care? As long as customers are using more cloud, right? It creates a rising tide where they all win. It's all about EC2 and object storage. So as we said at the top, the FTC is, as usual, slow rolling the acquisition. We know... This is really slow. Yeah, it's unbelievable. I rant about Lena Kahn all the time. We know the rationale for allowing the VMware acquisition to Broadcom and we have put forth, it actually creates a viable competitor to the hyperscalers. Here's a graphic from ETR that puts that in context on the vertical axis is net score. It's a measure of spending velocity on a platform. The horizontal axis represents the pervasiveness in the data and the overlap that these platforms have in the survey. And this survey is more than 1700 IT decision makers just finished in July. The red dotted line at 40% indicates a highly elevated net score. And the key points here are the big three clouds have the momentum and Azure and AWS have a dominant market presence. But look at VMware all the way to the right. So there's a 50% overlap, meaning that half of the accounts cited that they're running VMware. And it's probably even more than that. It just didn't come up in the survey. So VMware's presence is comparable to Microsoft's and AWS's. We're also showing the positions of the solutions in the VMware's portfolio. Rob sort of alluded to maybe there's some of them misfit toys. VMware cloud on AWS is the most prominent on the Y axis and you can see the others. So Zs and Rob, the rationale to the regulators that Broadcom has put forth is VMware presents a viable alternative to the public cloud players and is good for competition. Do you agree? Do you disagree? Why or why not? Well, doesn't the chart show that? I think so. I think it is irrational. And right now customers do complain about once you make a hyperscanner decision, it's a little bit like Hotel California, right? You can check out what you can't believe. And it is incredibly difficult to move between cloud providers today. If the VMware model works where you have an abstraction layer that normalizes the cloud providers, now you actually increase competition because you make it easier for customers to be able to move data from an AWS to an Azure or be able to create that single cloud fabric. And ideally it would actually create, it would allow more competition within the hyperscanner space versus what you see today where once customers are in, they're locked in. Rob, what about the rest of the portfolio? What are you hearing from customers about, you know, VSAN and NSX and VCF and Carbon Black and et cetera? Yeah, I think that's the catch is that if it's going to be about all the different pieces because to the point of multi-cloud, VMware has over 3,000 managed service providers who are actually building on the VMware stack, which you can look at at OVH, who's a large French company. They bought what I think was referenced to as VMware cloud in there. Actually, yeah, bring that back up, Alex. So, you know, this is the, when you have to interpret the survey data, so I've always thought that VMware cloud was VCF. Just like, I infer Dell when they're on this chart is Apex and HPE is GreenLake, but there's a mix. So to your point, it could be the old VMware cloud. Yeah, it might not just be cloud foundations, it's probably what is OVH in America and the US is that as well. So I think, again, you can kind of play with the data, how you want to see it, but I think it's one of these things where they actually are, if you look at all of their cloud players that they work with, which a lot of it's using vSAN underneath the hood and is on other storage and has providers, I think that is one of the key contributors. I think they are building moats around that in the container space. That is, I think will have to be a more open ecosystem for them to actually be a bigger competitor to the public clouds for these other sovereign clouds, as you said. So what do you mean they're building moats with the container space, explain that. I think that if you look at containers in particular, they're building a moat from a storage perspective for vSAN in the fact that if you want to use the container, there's a container storage integration, CSI module that you have to actually integrate to use storage straight through Tanzu. Right now it has to be VMware's CSI driver for those containers. Okay, so it's interesting because for years, EMC had its thumb on VMware and really wouldn't let it take off the gloves with vSAN. You know, now it's a whole different ballgame, VMware being an independent company. Yeah, and I'm hoping to hear some more broadening of that ecosystem next week. I think that's a big piece that I'm looking at is, how do these other pieces that are out there that we were showing, how do they really play back to all of the other accounts and how I'm gonna use it? If I'm a KPN in the Netherlands and I'm building out a cloud on VMware, am I using vSAN or am I using something else? And I think that becomes a big piece of it now that it's not as much a Dell product. I think you could actually see it grow in size because they can buy servers from somewhere else and they can get economies of scale. So I think that, to your point about the FTC, not understanding things, they don't understand how VMware is sold or used to compete in these clouds. She just wants to stop all big tech mergers. Now, Haktan is not a big hype guy. Just from observing him, he doesn't make decisions based on all this market chatter. So when he's asked, for example, about AI, he doesn't AI wash. He more looks at AI as though it's another workload and or something that's going to make infrastructure run better if it's embedded. But if VMware is going to be a platform for application development, which one of the earlier slides from Broadcom showed that it wants to be, it's going to have to unveil its AI strategy at VMware Explorer. So what we want to do here is let's look at how VMware stacks up against the hyperscalers in AI accounts. So this chart has the same XY spending velocity and market presence. And the same platform comparisons that we showed before, the difference is we filtered the data on 574 AI accounts in the ETR dataset. There are two interesting points here in the data that stand out. One is VMware affinity actually jumps. It was 50% in the early chart. Now it's 56%, but the public cloud players, the position actually their lead extends in terms of their market presence because they're the AI platform. So in last week's breaking analysis, we laid out the case for on-prem versus public cloud in terms of running LLMs. And the conclusion was that the cloud players had the clear lead in terms of innovation and optionality and functionality, but the incumbent on-prem players, they have the advantage of customers wanting more control, given the fear, uncertainty and doubt around IP leakage, legal and other compliance and related concerns and risks. And the edge is a latency game that is wide open. As you were talking about before, what do we need to hear from VMware with respect to AI? Yeah, that's an interesting question because they can certainly build a, well, they can't build the whole platform. That's the thing, right? So I suppose in the Broadcom, they can get most of the way there. But if you're gonna do AI on-prem, there's a lot of stuff you have to put together, right? And we saw in actually Cisco's most recent earning call just a couple of days ago, where they saw a big uptick in network spend because of AI. And I was talking with Scott Herron about this, their CFO, right? That I think over time, we'll stop seeing AI be the sort of point in time thing and just the standard way we do to run business. But it's gonna create, I think a pretty big refresh of technology. And from a VMware perspective, they do have most of the technology need to build like an AI data center stack. They obviously have all the great partners, but they aren't missing some of the software pieces, I think, and here's to see at this show. I expect AI to be a big theme at Explore, right? It's a big theme of every show, but I'd like to see how they round up their partnerships to actually be able to deliver AI in a turnkey way. It's got to come from the ecosystem. And I'm kind of out, as you know, Rob, I'm out on a limb saying in Q4, we're going to see an uptick of AI. And it's not going to, because of necessarily direct AI revenue, it's going to be because of compute and storage. It's going to create an uptick and a lot of spend on a lot of other areas. Absolutely. And so you, I mean, you know, SageMaker is not a big revenue producer for Amazon, but it drives, drags along a lot of other stuff. And Rob, one of the things we hear from developers is they really like the innovation in the public cloud and they like the optionality. For example, having access to foundation models in a repo like Bedrock on Amazon. And we're seeing the striking ascendancy of AI adoption. And this chart shows the net scores and in presence of AI platforms. So what we did is we filtered 886 VMware accounts and we said, okay, what AI platforms are prominent in the VMware, you know, space? So it gives us an indication of which tools are popular in these accounts and presumably represents some of the partners that VMware should target. But first, if we go look at open eye, I mean, it's overtaken all vendors in the ETR data set across the board in terms of spending velocity. It's got an 87% net score, very, very high. And then also a high end, second only to Microsoft which is its biggest partner. So the hyperskillers are prominent. VMware partners, you know, but you know, you typically think, well, you got Databricks in there, you got DataIQ, Anaconda, Spark Cognition. But when you think Rob about VMware's ecosystem, you think about Dell, HPE, IBM, NetApp, PureVeeam and others, including the hyperskillers but you don't typically think about these AI names. So how does VMware become relevant in AI? What does it need to do? I think exactly to what Zeus was saying is that you got to look at, they don't have the full stack. They can build the infrastructure out with the Broadcom stuff. I mean, they had their Jericho three announcement back in April, about 35,000 GPUs connected together across an Ethernet Broadcom Ethernet fabric. Great, so I can put the infrastructure pieces together but how do I actually then use that throughput? How do I use that infrastructure, those GPUs? Well, I think they can get all of that together from an infrastructure perspective but when you start to go up the stack and the tooling from a data platform perspective, they're not there. And I think that'll be interesting to see if there's any announcements or ecosystem players that are very present next week at Explore to your point about, yeah, I could go build Spark or Delta Lake from the open source versions of Databricks on a VMware infrastructure but then I have to manage that all myself. And so am I leaning into the open source aspect of it? And does VMware start to lean harder into open source now that they're not Dell EMC, not separate VMware? Do they look at it and say, hey, this is a place we're not gonna play but we're gonna start to structure agreements with Databricks or we're going to go and do what people like IBM and HPE and Dell are doing with things like Esmerelle at HPE and building out a layer or Apex or what IBM is doing with building out that open source layer on top of theirs to be there. Or even further up the stack, I mean, we've said, so you remember the deal last year with Dell and Snowflake and okay, fine, you can do materialized views, you can take data from a Dell object store, bring it to the cloud, run the compute and put it back. What if you could separate the compute from the storage and actually leave it on prem? That would be a sort of interesting extension, maybe do that within VMware. That's kind of one point but the other point I wanted to bring up, you talked about, you know, Broadcom and the fabric, I saw a video a couple of years ago from Charlie Cowas who's, you know, senior executive at Broadcom and he was talking about the world is shifting from a compute-centric to a connect-centric environment. You got this Ethernet consortium, you got NVIDIA running the table with, since they bought Melanox right on InfiniBand and so obviously Broadcom wants to compete with that. And so, and they don't compete in CPU, they're not trying to take on NVIDIA and GPU but they are looking at the next space instead they're all about connectivity. So networking becomes a really important component here, especially if you're building a super cloud. Yeah, networking has to become an embedded piece of it. But it's hard to build after the fact, I suppose, and keep it at a point that, who is it? Charlie Jean Carlo when he first went to Pure and I sort of- Networking guy. Yeah, why would you go to a storage company? Look, if you're going to build AI, because even back then when he first went there was looking at AI as really a great workload for Pure, you're going to need a fast processor, that's the GPU, fast networks, right? So, you know, the networks continue to go in speed and now with the alternative at form we'll see if it can actually overtake InfiniBand and fast storage, right? And so networking continues, I think, to march down this path. I'm not fully convinced yet it's ready to overtake InfiniBand, but you see the way Nvidia sells it. It's an embedded component of the overall stack. And I suppose over time we'll find a way to decouple that. But back to your point, I just wanted to do one point on the ecosystem. VMware's traditional ecosystem needs VMware because they're the lion's share, they own the private data center. The big question I have in the AI space, do the AI players really feel they need VMware? Right, that's, you know, so VMware's always been able to drive that ecosystem because of their presence, they don't have that same presence in AI. And it's going to require more work on their part to go build that AI ecosystem. But to the extent that these LLMs are going to run on-prem, VMware can be a strategic partner to these companies, but they've got to get on it. Right, yeah, I think to your point though, it's like if Databricks wanted to go run on VMware, it uses Parquet files. It has its own little file system that sits and does all the management on top of that. VMware has vSAN that can do file. So in theory, you could go and run it. You can do it with Spark. You could go and run Spark in a container on VMware and build out your own version of Databricks. If you wanted to, I think it's will to you. And I think back to Zia's point, I think where does VMware see that? Is that them to do it or is that for them? It's got to be a managed service. In order to compete with the clouds, it has to be a managed service. And so it's almost like they're staring at their navels, okay, who's going to do this? But the sovereign cloud part of it, and I think to kind of go further on Zia's point, I think it becomes a, hey, we're in all of these 3,000 other clouds, not named Google, AWS and Azure. And do you want to do that in a sovereign cloud? Do you want to do that in SingTel? Do you want to do that? Great opportunity for partners there. Absolutely. Yeah, I think that that becomes the play. They have to be the partner cloud, the partner super cloud to these folks. And the ecosystem wants alternatives to AWS where they go to reinvent it. Don't say multi-cloud. I mean, it's like, okay, it's controlling factors. So they, I mean, the world needs that competition. All right, let's close with some expectations for VMware Explorer next week. We're not, we don't think we're going to hear much about the Broadcom acquisition. We think we're going to hear a lot about VMware's. I want to get your guys to take on all this VMware's AI play cross-cloud services, of course, Tanzu and Aria and developer extensions. There may be a lot of incremental enhancements. I don't think there's going to be an announcement of an acquisition or anything like that. But I want to talk about vSphere and vSAN and NSX, maybe Carbon Black. Where's Broadcom potentially going to de-lever? We can sort of speculate on that. I'm not going to hear about that this week, but we can speculate on it. The ecosystem, project Monterey, things like that are things that we're watching. You know, let's unpack this a little bit. We talked about the AI play. What do you guys think about the viability of Tanzu and Aria, developer extensions, Rob? I mean, you said before that there's so much open shift in VMware. Red Hat, open shift, gets probably at least half of the revenue in that whole container space. Does VMware have to have its own platform there? Can it partner? How strategic and important are these pieces? Yeah, I think Tanzu is one of the odd items out off the island, cast off the island. I think it doesn't make a lot of sense to compete there unless you really think that you have to own the stack upwards versus having an ecosystem in a partnership play. And because they do so well with open shift and Red Hat, and IBM's a big partner of theirs on their version of BX Rail and things of that nature and does do a lot of selling of VMware, I think it would be a very natural leverage point for them to delever based on Tanzu or at least scale back how they use that and build better relationships with Canonical and with others that are doing this as well. Who would buy that? That's a good question. I mean, maybe it's just, it's not a- Maybe it's not a- Maybe it's not a- It's just a reduced expense. Yeah, it's a reduced expense, reduced people, a headcount because that's a very large development organization that they have in there inside of that Tanzu organization. They can keep like a Tanzu light almost where for customers that want the whole VMware stack it's there, but I agree that for the most part it's so well done by their partners already. What are they going to incrementally add? Aziz, what about NSX? I mean, the NYSERA acquisition kind of put the nail in the coffin with the Cisco relationship years ago. How strategic is that? What are you hearing from customers? Yeah, well the whole network portfolio which includes, you know, Velo and things like that I think is in question. I do, I've always liked NSX because it is a again a vendor-neutral way to go out and build a data center, right? And so it's had some good play there. It's a lot, I think it's lost momentum over the last couple of years, obviously. And I do think somewhere along the line it does need to re-establish the partnerships it had in the networking space, right? And I thought that was, you know, that was I guess a pretty strategic acquisition made to really disrupt the network space but the network vendors are caught up, right? And so I think from that standpoint, again, like we were talking with Tanzu, there are vendors that do it better. And so I think there are some customers that do want to be on with VMware and you can offer that as an option but I think that's an area where you're better off actually partnering. So VSpear obviously is the core, that's central. What about Carbon Black? I remember we were at, I don't know, VM World, I can't remember when they bought Carbon Black probably 2018, maybe 2019. And I remember Pat telling us, hey, I paid $2 billion or it was $2.3 billion for Carbon Black. CrowdStrike's trading at, you know, whatever, $30 billion valuation. I just picked up an equivalent product for a couple billion. Clearly, CrowdStrike has separated from the PAC. Do they need Carbon Black? On the one hand, they need integrated security, can't be bolted on and they've got some security assets or is that something that could be spun out and delevered? Yeah, I think it's part of the software stack that they don't play in traditionally. There is some at CA, but not a ton. And I think it's a place that if you look at, you're building a cloud, you need to have integrated security in there. How far or how much development as a separate product versus getting rolled back into the core product set, I think that's a, hey, is it a feature flag versus a separate product to lower your cost of selling motion and how you actually deploy it? I always thought VMware had a pretty good security story. And then I see Tom Gillis, G2 stole him and now G2's got some work to do as we see. I mean, Cisco, great quarter, things are firing all cylinders. I know the collab business because you got the COVID boost and everything else. Security's the one area where there's, I think it's flat, but there's presumably upside. I mean, it's an important market. You got a good leader. Tom Gillis goes from VMware to Cisco, any thoughts on all that? Yeah, I think VMware has to decide whether they want to be in the security space or not. And we talked about this at every security event, security is moving to a sweet play, right? And the ability to actually take all your security tools and make it more than the sum of the parts, I think is becoming more and more important. Palo, in fact, Palo, I think markets are capable of this, but they've run away with it. Fortinet to a lesser extent, Cisco's coming on. VMware last year, they did roll out their SSE stack, right? Which they're tying to their SD-WAN, VeloCloud. And so from here, I think VMware needs to decide, are you in security or are you not? And if you're in it, then you gotta build out the rest of that suite. And if you're not, then partner. But I don't think you can be half in, which is really what they are right now. But there's an asset there that has value that could be sold off. And again, Broadcom has said. In fact, that doesn't really fit the SSE stack. And so if they wanted to keep security around as an attach to the SD-WAN, I'm okay with that. But then I would focus everything on that, right? And then carbon black would be the unmanned. And I think it also ties back to the NSX and the networking and what maybe you could package both those up and sell both those off as one asset to somebody who would be looking for that, maybe you look at an HPE, who doesn't have that stack anymore because they sold off what they did there with the micro-focus. Right, sell it back to Dell. Yeah, sell it back to you, you go. Yeah, but that brings up a good one with VSAN. I think VSAN could also be a very attractive where it's a very closed ecosystem right at the moment. You could sell that off VSAN to somebody and they could control the market, maybe a Nutanix or maybe a Dell or what happened. Maybe X-Rail is right, that's Dell, right? It's very popular there. Nutanix would be an interesting play, right? Basically take out the competitor and run the table. That would be an interesting move. And then the last thing on the slide we showed you was Project Monterey. Project Monterey is essentially VMware's way to compete with Nitro, which is Amazon's platform, their intelligent NIC and their virtualization platform, which is kind of their future. That's how they build Graviton and Tranium and all this custom silicon that they've developed and all that silicon optionality. I wonder what Broadcom's thinking about that. I mean, obviously Broadcom has silicon chops, they could take that whole thing in-house or they could shoot it, I don't know. That's something that I'm really interested to hear. I personally think it's strategically important to keep pace with the economics of the hyperscalers, but if it's not making money, Broadcom's going to probably kill it. Yeah, and I wonder, given that we heard really nothing about it the first half of the year from those partners, other than a minor mention of it, I believe with Dell and HPE was talking about a very different set of three products that they're doing with Cloud Foundation, Cloud or Private Cloud, Business Edition and things of that nature, I look at it and go, it could be another misfit toy that gets kind of thrown overboard. Interesting, but it does have long-term implications just in terms of how competitive the on-prem guys can be with the public cloud. When was the last time we got nothing on Monterey? It's been a while, right? It has been a while. I would say over a year. It's been really quiet. All right, guys, you're both going to be there, VMware Explore, it's in Vegas this year, the queue, of course, will be there. We have to schedule you on, you'll be doing a lot of the hosting as well. Guys, thanks so much for coming in, appreciate it. Thanks. All right, and thank you for watching. Thanks to Alex Meyerson who's on production and manages the podcast and Ken Schiffman as well. Kristen Martin and Cheryl Knight, they get the word out on social media and on our newsletters and Rob Hope is our EIC over at Silicon Angle, where you can catch a lot of Zeus's work, appreciate your great editing. Remember, all these episodes are available as podcasts, or ever you listen, just search, breaking analysis podcast. We cracked a million downloads last week. Really proud of that. So thank you, please subscribe if you haven't. We publish each week on wikibon.com and siliconangle.com, and you can email me at david.volante at siliconangle.com or DM me at dvolante or comment on our LinkedIn posts. Please do check out etr.ai, great survey data and enterprise tech focus. This is Dave Vellante with theCUBE Insights powered by ETR. Thanks for watching everybody and we'll see you next time on breaking analysis.