Narrator: Live from San Francisco, celebrating 10 years of high tech coverage, it's theCUBE, covering VMworld 2019. Brought to you by VMware and its ecosystem partners. Well, welcome back everyone. Live CUBE coverage here in San Francisco, California for VMworld 2019. I'm John Furrier, Dave Vellante, Dave 10 years continues, day one of three days of wall to wall coverage. Mark Lohmeyer, Senior Vice President, Cloud Platform Business Unit and general manager at the VMware, manage cloud for VMware. Great to see you again. Great to see you, yeah, thank you. So you got, you're managing all the VMware manage cloud on AWS and Dell EMC? Right. Which was a big part of today's keynote. Obviously a big part of your investments, so you know, you always look at someone's commitment to something. How they spend their resources and their time. So give us an update obviously a lot of resources on the VMware side. Mark: Right. To make this run, what customers want. Give us an update on what's going on. Yeah, yeah I mean so first of all VMware Cloud and AWS, I mean, we're really pleased with the momentum we're seeing for that in the marketplace. So, we compared what it looks like today versus a year ago. And we were talking about it, a year ago and we've increased the number of customers by 4x on the service. We've increased the numbers of VM's on the service by 9x. That's kind of interesting 'cause it shows you that you know, we're adding both new customers as well as existing customers are expanding their investment. So, that's great to see, right? And it's powered by a lot of the compelling Use Cases. You may have heard Pat or others talk about most notably, cloud migrations. You know from an investment perspective which is I think where you sort of started the question you know, significant investment from both VMware as well as AWS the end of the service. You know we say it's jointly engineered and that is absolutely the case. I mean we literally have hundreds of engineers that are optimizing the VMware software to be delivered as a service on top of the AWS infrastructure. And that's a lot just to get nuance on this point. Because in the press coverage, I've seen all the press coverage from the Microsoft and the Google. This is different than just Cloud Foundation because you're talking about something completely different. This is jointly engineered. These are specific, unique things. Yeah, I mean with the sort of distinction I would sort of articulate there is that in the case of VMware Cloud on AWS, it's a VMware managed, operated, supported, delivered service. Right, so it's our engineers that are pushing the bits into production in AWS. It's our engineers if there's an incident that deal with the you know, with the situation. You know, it's literally a service operated by us. In the case of what we're doing with Azure and GCP, you know first of all from a customer perspective what we heard them telling us is, I think many customers are using Azure, many customers are using GCP and they'd like to have the ability to have that same VMware consistent software stack on those clouds. But the operational model is different. So in those two cases there's a partner called CloudSimple. Who's a VCPP partner and they're taking our standard VMware Cloud Foundation software that customers use on Prem and they are operating and delivering that as a Cloud service on top of those Cloud platforms. Just to review so VMware Cloud on AWS and Outposts both your responsibility, there's two way street there? Yup. (laughing) Which is rare with Amazon usually it's a one way street. My words not yours. But so, and, so you manage both sides of that? Is that correct? Mark: Yeah, that's right, that's right. So you're happy to sell either one? Absolutely, yup. Right, and then the Dell EMC version is kind of the on Prem version of Outposts, if you will. Is that a fair characterization? Mark: Yeah, yeah, so. Without the public cloud. Yeah, I mean absolutely, I think one of the interesting things was you know, we've been in market now with the VMware Cloud on AWS for a couple years. And, you know it's going great but one of the things we've heard from customers was, "Hey, we sort of really like this VMware managed cloud model where you're taking all of the heavy lifting of worrying about the Lifecycle of the VMware software. Worrying about the you know upgrades to the hardware, you're taking that all off of our plate. But why can't we have that same cloud delivery model back on Prem?", right and so, that was the impetus for what we originally announced as Project Dimension and now we're launching this week as VMware Cloud on Dell EMC. So all the benefits go with the Dell infrastructure hardware? So, I got to ask you, so one are the attributes of those those solutions, is they're highly homogenous, right? And, Andy Jassy made a big deal about that same Control Plane, same Data Plane. Mark: Right. So my question is, help me square the circle with MultiCloud which is highly heterogeneous? (laughing) So, can I have my cake and eat it, too? Can I have this, you know unified vision of the world? This controlled, same compliance, government security, EDIx, management etc, and have all this heterogeneity? How does that? Yeah, so I think, I mean to me it starts from what the customer would like to do, right? And what we're seeing from customers is it's increasingly a MultiCloud world, right. That expands spans private cloud, public cloud and Ed. Dave: You're smiling when you say that. Mark: Yeah, now, now-- The chaos is an opportunity for VM. (laughing) Yeah, but it's a challenge for customers, right? And so, if you look at how VMware is trying to help there if you say sort of square the circle. I think that first piece is this idea of consistent operations, right. Then we have these management tools that you can use to consistently operate those environments, whether they're based on a VMware based infrastructure or whether they're based on a native cloud infrastructure. Right, so if you look at our cloud health platform for example, it's a great example where that service can help you under, get visibility to your cloud spend across different cloud platforms. Also B service platforms. It can help you reduce that spend over time. So that's sort of what we refer to as consistent operations. Right, which can span any cloud. You know what my team is responsible for is more in the consistent infrastructures base and that's really all about how do we deliver consistent compute network and storage service that spans on Prem, multiple public clouds and Edge. So that's really where we're bringing that same VMware Cloud Foundation stack to all those different environments. Mark, I want to get your thoughts on what Pat Gelsinger said on the keynote. He said, "modernize and migrate or migrate and modernize" he also mentioned live migrate as a big feature. Mark: Yes, yes. On the modernize and migrate and migrate then modernize, they basically pick one and people are doing both. Mark: Right, right, right. What's he mean by that give us some examples and then what's the impact to the customer? Is it just the behavior of the customer? Yeah, I mean, it varies a little bit based on what the customer's trying to accomplish. But you know the one thing I'll say is that, you know, historically it was a little bit tough to have that choice. Right, so you know the sort of the thought was, hey I have to like re-factor and re-platform everything upfront just to be able to get it to the public cloud. And then once it's there I can sort of start to modernize. I think in that can be a multi-year process, right? Yeah. I think one of the really interesting opportunities that we've opened up for customers with VMware Cloud on AWS is you don't necessarily have to re-factor everything just to be able to get to the public cloud. We could help them migrate to the public cloud very quickly without requiring any changes if they don't want to. And then when they're there, they can modernize at their own pace based on the needs of the business. All right, and so I think having that additional option is actually quite useful for customers that want to get to the cloud quickly and then from there begin to modernize. So two main paths with migration and modernize as the easiest one given the managed service. Yeah, yeah, and but you know that being said, I think also you see a set of customers that say "Look, sort of digital transformation and modernization is my primary goal." Right, and for them by enabling some of these things like Native Kupernetes as a service in vSphere and in VMware Cloud and AWS by enabling this AI and ML workloads with a Nivida partnership for that classic customers, they can also just start with the modernization piece, right? Directly on the-- So the migrate to modernize would be a lift in shift essentially and then modernize? Mark: Ah-hm. And that's what Amazon wants you to do? But, you're giving customers a choice, is what I'm-- Mark: We have, yeah no, I mean look at the end of the day I think both VMware and AWS believe strongly in understanding what customers are looking for and making sure we're delivering that value to them. And I think you know, this is one of the compelling new options that we've enabled for customers, I think with VMworld Cloud on AWS is that we could take a migration project that would have previously taken three years and we could do it in a few months. You know Mark I had a chance to talk to Carl Eschenbach two weeks ago before the show. He came in for an interview Sequoia Capital, Carl Eschenbach, former COO of VMware been there for years. He was part of the deal with AWS, graphing that deal. We were talking about the moment and time where your stock price started to move up this October 2016. That's right when the deal was announced. Since then the stock price has been up. For a lot of reasons, we've talked on theCUBE before. The question I have for you is, what have you learned? What surprises you from this relationship? Because one the clarity was easy, meet Cloud Air, no more. This is our cloud strategy. All on AWS and MultiCloud as it develops you certainly have had to clarify with customers. But now that you entered the managed service, what new things have popped up that might not have been on your radar? What did you expect? What are some surprises from this relationship from a customer behavior standpoint? Yeah, that's a real interesting question. So, I think you know in the early days we sort of had this concept of "Hey, let's enable the full VMware capabilities on AWS." And we were sort of talking about it as a tech, almost like a technical solution, right? And what, what we could enable. I think sort of what quickly became apparent is hey, sort of behind that technical approach there's actually some really compelling Use Cases here. And I think that, if I think back to two years ago, I don't think we fully anticipated how compelling this cloud migration Use Case would be. I mean I don't think we really realized internally within VMware how hard it was for customers before to do that. And, I think customers didn't realize sort of how much easier and faster and lower cost that we could make it for them with this type of service. So I think that one, although we were maybe talking about it a little bit in the early days. I think it surprised me at least at how sort of broad based the customer interest was in that type of capability. Any other broader market interest on things that were surprises or not surprises that are compelling? I mean, you know the other thing I wouldn't say it's a surprise per se, but I mean, I think the partnership with AWS has been fantastic. Right, I mean we sort of went into it, I think in the right way between Pat and Andy and focused on doing something meaningful together. The relationship has only gotten sort of deeper and deeper over time. And, one of the interesting things about it is that relationship spans not just engineering and product management and product strategy which is sort of my neck of the woods. But also the marketing organizations, the sales organizations, the support organizations. So it's, it's become I think a very deep partnership. We're able to speak to each other very openly and trying to solve together the, you know the problems that customers are putting in front of us. And what's with Outposts, what's the new update on Outposts? Yeah, yeah so you know no news on Outposts today obviously but we're working very closely with AWS to enable the VMware Cloud on AWS Outposts model second half of this year. And, the customer interest has just been fantastic, right. And in many ways it's basically the exact same value prop of VMC on AWS in terms-- In reverse. But, but in reverse and anywhere you want, right, at your door step, right, any Edge, any data center, so. I got to ask you, back to the AWS relationship. We were big fans of it always have been. Learned from both sides and believe in it. Having said that, EC2 is the bread and butter for Amazon despite it's hundreds and hundreds of services. That's where their revenue comes from, and compute, your compute business is you know, significant. So my question is, is it a zero some game long-term or when you look at the tam do you see all these other services that you can sell longer term providing you know, the growth engine for your respective companies? Or, does this whole you know, rising tide lift both boats, what are your thoughts on that? Yeah, I mean it's clearly rising tide lifts both boats. I mean, again I'll, I always bring it back to the customer right, 'cause that's the way I like to view the world and AWS-- And you've got some evidence now that's why I'm asking. Yeah and I mean what you're seeing is actually I mean if you take some of these customer examples. Let me give you one from the UK. So, Stagecoach. I don't know if you heard about these guys. But they're a major, so they provide transportation services in the UK, and other countries as well. So, they run a network of buses, trains and they're responsible for the transportation of three million commuters every day in the UK. So, they have this really mission critical application that they're building that is basically responsible for scheduling those buses and those trains and scheduling the conductors and the operators. So you can imagine this application is super mission critical for their business, right. And, they chose to run that application on VMware Cloud on AWS and one of the reasons they chose that is because we have a unique capability called stretch clustering. Sure. Which says "Hey, even if there's an issue in one AZ we can restart that application in a second AZ. So there's a really good reason for the customer to choose it. But now back to your question, right? If you think about the opportunity in that for both VM or in AWS, it's meaningful, right? You know, for us, we're selling the entire VMware Cloud on AWS service to that customer across those two AZ's for mission critical workload that's core to their business. For AWS, they're able to of course not only supply the infrastructure that we run on top of but also as that customer looks to do more interesting things they can attach an additional native AWS services, right? So, you know I think that's a great example where delivering value to the customer and if you focus on that the right things will kind of flow back to the companies that help make that possible. Good partnering helps you reduce friction and get to market faster. Thinking about the intense effort that both you know, Pat's described, Andy Jassy described, you've described in terms of that partnership, that deep engineering. Can you do multiples of those or is it that you don't because of the respect for the partnership or is it too intense and it's too resource intensive? How many of these types of partnerships can you actually have? Well I mean and I think Pat has said it pretty clearly, right? I mean AWS is our primary preferred partner, right. And, what we're doing with them is very unique, right? And it's something that we want to make sure that we have the right level of investment in and that we do an amazingly good job of, right. And I think they feel the same way. And so having that focus together between the two companies. I think is what, has allowed us to be you know, achieve some of the level of success we've had to date and we expect to do that going forward. Mark, final question for you. What's your objective this year in your business unit? What's your focus? What are some of the things that you're working on that people should know about? Yeah, so first of all. I had VMware Cloud VD but that's just to wrap that up I think the big thing we're focused on going forward is really this modernization kind of piece of the story. How do we enable Native Kupernetes in the service? How do we enable ML and AI workloads in this service? How do we do a better job of connecting to all of the AWS services? So, you're going to see a big kind of focus, there. Beyond VMware Cloud AWS, I mean we're really excited about bringing this VMC model back on Prem both with Dell and on top of AWS Outposts. I mean the customer interest has been, you know fantastic, right? And, you think about all the reasons that customers want to be able to run their applications, you know on Prem, data locality, latency, compliance, all sorts of really good reasons. We think that those services have really hit a sweet spot of that market. IT as a managed service, what an interesting idea, don't you think? (laughing) Mark: Yeah. Whole nother level same game, whole new ball game, right? Absolutely! Mark, thanks for sharing your insight. Congratulations on your success and we'll be following it. VMware Manage Solutions AWS certainly a big hit. Changed the game for the company and now they're bringing Dell EMC among other potential business model opportunities for customers. As Cloud 2.0 comes as theCUBE's coverage. Live at VMworld 2019, be right back with more from San Francisco after this short break. (bright music)