The term “cloud” is by now so overused that most people lump it in with the rest of the marketing buzzword pantheon with terms like “solution”, “leverage” or “ROI.” You’re probably thinking that the cloud is what Google and Amazon do and how could it possibly be relevant to your business? Well it is (what Google does) and it will be (important to every business) and VMware wants to be the company that delivers it. It’s called the software defined data center (SDDC) and for CEO Pat Gelsinger it’s increasingly a part of discussions with his C-level customers.
As I wrote in an earlier column outlining the four pillars of the SDDC, “It’s an expansive vision that could put VMware in the middle of enterprise IT application and service design, construction and delivery. Indeed, if fully adopted by VMware’s customers, … it would make VMware the hub around which all business application and IT infrastructure decisions revolve. Meaning that in an era of cloud computing and software as a service, the SDDC could do for VMware what the Windows family of PC and server software did for Microsoft in the age of client-server computing.”
Talk to Gelsinger as I did in an exclusive interview after he delivered a keynote address at the annual Interop conference and you can sense both his passion for the subject and depth of involvement. This Stanford-educated engineer who once ran x86 development projects for Intel is clearly no hands-off financial manager, as evidenced by his deep understanding of the technology and the business problems it addresses. Read on and you’ll see.
Realizing the Software Defined Data Center
Kurt Marko: The keynote was a good strategy about the four pillars of the SDDC. I’m wondering if you would like to talk a little bit more about kind of where you see VMware playing in each of those and where the company is as far as its journey in each of them. Clearly, compute was the foundation where you’re furthest along. Networking you’re covering with NSX. And the other two area, maybe even more immature. Just talk to that.
Pat Gelsinger: Sure. Let’s cover the spectrum. Obviously, starting with compute, it’s sort of a birthright at that point and we’re going to keep plowing ahead forever. You know, as I drive my team, 100% virtualized with very high market share. We’re not done, and you’ll see us just continue to pound. You know, where are people not virtualized today? Right? There’s a handful of places. The very big apps, right? So we’re going to keep driving on the mission critical. Those [applications] are performance-centric or for whatever reason have been, I’ll say, hardware-centric. Some of those would be Hadoop, some of those would HPC. And we announced our big data extensions to start attacking the Hadoop problem more directly, every release continuing to drive down latency. … [We’re] continuing to work with customers to get more of their P2V’s [note: physical to virtual machine migrations] done. I continue to be amazed — I go into big accounts, and they still have 20,000, 30,000 physical servers. It’s like, what’s going on here, guys? It’s just, you know, quite amazing
Q: So, expanding the scope of what is appropriate for virtualization
Pat Gelsinger: Yeah, just keep on that path. And then the next one, you know, the one lore of the compute virtualization I see opening up is network function, virtualization, the whole telco space. There’s approximately 6 million servers in that infrastructure, of which almost none of which are virtualized today. So that’s sort of another greenfield opportunity for us to go pursue. So that sort of is the compute piece of it [SDDC].
From Server Virtualization to Infrastructure Management
Pat Gelsinger: The next one I’ll go to is management… If you think about it, vCenter is probably the most prolific management tool in the history of the data center.
Q: It’s spawned its own ecosystem.
Pat Gelsinger: Right. Plug-ins, and enhancements to it, and so on. But now it very much is filled out that whole clan of cloud management stack, and that’s a reasonable size business for us today. And we think about it in three buckets: cloud provisioning, cloud operations, and cloud financial management. … Most customers that we’re engaging with today are really the combination of vSphere and cloud management. … Our picture is everybody has a problem here [with cloud management]. Every customer, they’ve got some legacy BMC, they’ve got some point tools here and there, they’ve got CA and Tivoli, they’ve got ITIL this. Every customer needs to transform their management environment to one, create much more automated operations, but also to create the environment that they can be hybrid and multicloud as they go forward. So that really resonates with customers, and you’ll see us keep building on that product suite.
Q: I was reading through the last conference call (Q4 2013) and it sounded like you’re getting a lot of momentum there. I think it was Carl [President and COO Carl Eschenbach] that cited 50% of your new licenses and 70% of revenue are vCloud suite now. That was kind of a surprise to me; that it was so high.
Pat Gelsinger: Yeah, and when we say vCloud suite, we generically say all four legs of SDDC. But the real, and that’s what I mean, the meat and potatoes is vSphere plus cloud management. Those are the ones that are really moving the revenue needles today. And that’s just going to keep getting tighter and tighter for us as we get those better integrated. You know, we had DynamicOps [automation software acquired in 2012] was one of the key products. They were on a different trajectory and we’ve had to sort of meld them into rest of the suite, so there’s things that need to be better integrated, more elegant for customers, broader support for use cases, so just a lot of work to do there.
Virtual Networks: The Current Battleground
Pat Gelsinger: Then continuing, obviously NSX has the center theme of today’s [Interop] keynote, and I think about this as the next big pillar to move, because so much of the provisioning automation limitations of the data center are around the network. VMs spin up very quickly, but I can’t get the network services, I can’t provision the routing tables, I can’t get the firewall rules in place, so I can’t deliver the new app. And that really has become a pain point that really resonates with customers when we talk about NSX. Just the rigidity of the network.
Q: Like the WestJet example [video presentation during the keynote from Richard Sillito from WestJet] and your other testimonials?
Pat Gelsinger: This is powerful for customers as well. So it is the next big one for us, but when we think about 500,000 customers for VMware, we’re really just touching a subset of the enterprise customers today. We had them last year, we 100-plus customers on the [NSX] platform now. We keep adding customers onto the platform. But there’s just a long way to go here, because it is very transformational. You don’t go in and say to a guy who’s been pushing packets, running pings and trace routes, right, and say, “Here’s a new way to provision your entire network.”
Q: It’s transformational at an organizational level as well, because the people using your suite are typically not network guys, they’re server guys.
Pat Gelsinger: Right. And they’re increasingly becoming those. Our typical V -admin or V-architect, they’re sort of stretching out because they’re tired of running over to the networking guy and say, “Here’s what I need you to do,” and getting the answer, “It will be in the second network upgrade a month from now.” And not being able to operate at the business kind of speed that they want to operate. And then when they finally do it, they screw it up and now you’ve got to wait for the next network outage. You know, this kind of provisioning, this manual provisioning and update cycle is very pained. Now when they can start introducing things like NSX, I’m just saying, “It’s done. I was able to create the virtual east-west firewall and I’m done.”
From Networks to Storage: the Virtualization of Everything
Pat Gelsinger: So NSX is the next leg. And then VSAN was obviously our big launch a few weeks ago for virtualizing storage, and that’s gotten … I was surprised. I wasn’t expecting that we’d get two awards at Interop for V-SAN.
Q: I wasn’t judging that Best of Interop category, but I heard similar surprise from people.
Pat Gelsinger: I just GA’d the product two weeks ago, and it’s sort of like, wow, this is pretty good. So that was a very pleasant surprise, and the industry resonance to that, again it’s taken the V-admin, and rather than him having to go through a laborious process to get LUNs provisioned, now he essentially is in control of being able to have to have VMDK storage that can be spun up and managed in a dramatically elegant way. … Being able to now have this fully automated provisioning against workloads is very powerful. And we do think that whole model will complement a lot of your traditional storage arrays. As we see the world, that storage was really a one-appliance-needed-to-fit-all world, and it’s becoming increasingly separated into the hot edge and the central store. If I’m moving the hottest workloads onto the edge cluster, that means that the central storage appliances become increasingly focused on capacity, because performance is being delivered by these cluster storage models, VSAN on the edge, so that you can actually start driving a very different cost-performance dynamic into the central storage requirements.
The last comment of this; I feel good ending Q1, because I now have the full SDDC components in place. We laid out the vision about a year and a half ago, and the vision resonates. We talked to a customer, the conceptual sale is done in the first two minutes of the customer meeting. Now I can actually execute on all the legs of it, and really say, “Yep, we have all the components and we can truly change the way that you build data centers,” and that’s exciting.
As Gelsinger described, VMware has designed a comprehensive cloud technology architecture and product portfolio. In part two of this interview, we’ll discuss the reasons business executives are receptive to the message, including the need to rapidly build and deploy IT services without expanding IT budgets and look at VMware’s place in the very competitive cloud technology market. Come back next week for the rest of the story.