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  • >> Live from Las Vegas

  • it's theCUBE!

  • Covering VMworld 2018.

  • Brought to by VMware and its ecosystem partners.

  • >> Hello everyone, welcome back theCUBE's live coverage

  • here for day two, were kickin' it off,

  • for wall-to-wall coverage,

  • three days of CUBE interviews here

  • in the VMware village, the VMworld village.

  • I'm John Furrier with Dave Vellante,

  • our next guest is a special guest

  • CUBE alumni Michael Dell, CEO of Dell Technologies,

  • Founder of Dell, Michael Dell,

  • named after the company.

  • Great to see you again, thanks for comin' on.

  • >> Great to be with you guys,

  • and thank you as always for the

  • incredible coverage you provide for our events,

  • and so many great events across the whole industry.

  • You got two

  • two teams goin' here at the same time.

  • >> It's great, isn't it?

  • >> Tremendous coverage.

  • >> Thank you.

  • >> Great community.

  • What's interesting is

  • this is our ninth year doing VMworld,

  • and we've gotten to know the community really well,

  • and it's just been so much fun

  • and it's been great to see everyone,

  • and more exciting now is this years keynote

  • which I thought was pretty interesting.

  • You know you look back just four years ago

  • the cloud, and what was doing cloud,

  • who wasn't doing cloud, and everyone's throwin' around

  • "well they don't have a cloud strategy"

  • what does that mean, right?

  • So it's very clear what's happening with cloud right,

  • everyone knows the cloud's going to be there,

  • but the role of infrastructure hasn't changed, so,

  • at the end of the day

  • you made a big bet,

  • going taking Dell private,

  • and the things that you've been doing

  • certainly with VMware and others;

  • infrastructure is never going away, so,

  • that was a good bet.

  • I mean, storage doesn't go away,

  • all these things are still happening,

  • and Amazon announcing RDS on VMware on-premises

  • is absolute validation from the customers

  • that on-premises activity

  • is still going to be super relevant in a cloud world,

  • and so it's not like anything's really changed

  • it's just the rearranging of the resources.

  • Your thoughts on this trend,

  • and your bet on infrastructure?

  • >> It's a data economy,

  • right, it's a multi-cloud world,

  • that's a two way street.

  • And if you think about the billions of connected devices,

  • the explosion in data, overlay on top of that,

  • all the new computer science,

  • that requires all kinds of new infrastructure,

  • there's a boom on the edge.

  • And so, absolutely,

  • this is why you see our business growing so quickly,

  • and doing as well as it's doing and

  • we're investing in innovation, strongly,

  • you saw it you know yesterday, today in the keynotes and,

  • it's resonating extremely well with customers.

  • And so, I think we're very well positioned,

  • we've been gratified by the response

  • you know from customers and partners around the world and

  • look

  • you know the

  • you know every business is increasingly

  • recognizing the importance of

  • you know technology and data, and,

  • you know that requires lots of new tools and technology,

  • and it's why we created Dell Technologies, right,

  • to be the essential infrastructure company

  • and you know it's working well,

  • it's actually working better than we thought it would work.

  • So, it's all good guys.

  • >> Well, you know, my old boss,

  • whom I think you knew Pat McGovern used to say that

  • 90% of mergers and acquisitions

  • failed to meet their objectives,

  • so then we have many, many examples of that.

  • In roughly 36 months

  • from when you announced the merger/acquisition,

  • you've completely transformed Dell,

  • you went from a company that was like

  • sort of a half super power obviously in client,

  • and you were relevant in other areas,

  • but you weren't number one.

  • To like number one in all the magic quadrants and

  • in record time,

  • it was one of the most amazing transformations

  • I've ever seen.

  • >> Thank you, thank you.

  • >> You're welcome, but,

  • I'd really like to understand, you know,

  • what were the conditions that allowed you to do it,

  • obviously they say it's better to be lucky than good,

  • you're both good and there's probably some luck involved.

  • What were the conditions that allowed you

  • to make that transformation in such record time?

  • >> Well certainly a big one was the acquisition of EMC.

  • >> Well right. (all laugh)

  • >> And along with it,

  • you know VMware and Pivotal, right?

  • And we theorized,

  • and actually as you guys know,

  • this story goes back a long way, right?

  • It actually goes back to 2001

  • when Dell and EMC started working together,

  • when VMware it was just a little,

  • you know, when Sanjay showed the slide about

  • the server virtualization;

  • actually before VMware was server virtualization

  • it was workstation virtualization.

  • >> Workstation, that's right. (laughs)

  • >> And we were an investor in VMware,

  • and we thought that was cool.

  • Anyway, so you fast forward to 2013, we go private,

  • 2014, Joe Tucci and I

  • restart the discussion that we'd had earlier

  • back in 2009 about combining together,

  • 2015 we announced it,

  • and we thought that

  • if we could combine everything together

  • that customers would really like it.

  • And, you know, thankfully as we've found

  • that's been true, it's been more true than we thought, and,

  • and the innovation engines are crankin' on high,

  • you know $12.8 billion in R&D

  • invested in the last three years.

  • And you see here at VMworld

  • and at Dell Technologies World,

  • the strength of the roadmaps, so,

  • every turn of the crank

  • we're just getting stronger and stronger.

  • We never believed

  • that you know everything was going to go

  • one place or the other, okay,

  • it's actually great that the edge is booming.

  • Now if you said "Did you know that five or 10 years ago?"

  • No, I didn't really know (laughs)

  • but you could kind of see some things starting to happen.

  • Look, you know distributed computing

  • will be even more distributed in the future. (laughs)

  • >> And so you had good products,

  • you had a great combination, that makes a lot of sense,

  • and you know we were. >> And incredible people too,

  • >> The team.

  • >> The quality of the talent that we are blessed with

  • is amazing, and it's a flywheel,

  • because you can attract the people,

  • and the very best people,

  • and develop them and train them,

  • and they want to come be part of the winning company.

  • >> And we saw a lot of,

  • and they saw that on theCUBE

  • we commented about the synergies

  • that were probably unrealized or unrecognized by others,

  • you obviously saw that.

  • But then also there's the other side of the equation

  • of the financial opportunity,

  • you took a financial risk,

  • you put your own money into the deal,

  • there's a lot of engineering going on-

  • >> We took the risk, it's the man in the arena, you know,

  • and not everybody wanted to take the risk, and,

  • you know I,

  • I'm happy to take some risk.

  • >> Yeah, but the rewards are lookin' good, I mean,

  • I mean if you're keepin' score,

  • which I'm sure you are,

  • the numbers are lookin' pretty good, so.

  • >> This has been good.

  • >> There's the financial side of it,

  • and then also risk/reward payouts

  • are also part of the entrepreneurial thing. (laughs)

  • >> Yeah, I mean if you look at our last quarter,

  • you know, gap revenues up plus 19%,

  • non-gap revenues up 17%,

  • data center, ISG business up 25%, right?

  • I mean we're clearly gaining share,

  • number one in storage, in all flash, in NAS,

  • you know in backup and data protection;

  • and every category of storage unstructured,

  • you know, we're bigger than number two,

  • and number three, and number four,

  • all combined together! (John laughs)

  • Number one in servers, right?

  • Number one in virtualization in all flavors,

  • you saw what Pat showed

  • you know with the progress with NSX, with Workspace ONE,

  • obviously server virtualization.

  • You know, number one in client as well, right?

  • In you know client revenue, so.

  • The business is quite strong and healthy,

  • and what's really interesting

  • is if you look at it across customer types,

  • you know the very largest,

  • the small, the medium,

  • the government, the state, local,

  • top 50 countries,

  • pretty much everything is growing double digits

  • all across the world;

  • every customer, every route to market, every channel.

  • So, you know, I think the industry

  • is stronger than people understand, that's the first point,

  • I think there's this data economy,

  • and this tsunami of data that's being created,

  • and that's driving demand for

  • infrastructure products and solutions,

  • which we have the best in the world,

  • and then on top of that, we're gaining share.

  • >> These market forces are interesting.

  • >> So all of this together is,

  • it's a good news story.

  • >> And the market forces you mentioned

  • that really were somethin' that

  • I think a lot of people in the industry at the time

  • that you were contemplating the deal.

  • And we talked privately about this,

  • so I want to kind of bring this up here on theCUBE,

  • way back when.

  • The industry pundits were looking at the industry

  • almost like a siloed map of TAM,

  • total addressable market.

  • And these other forces,

  • if you factor those in as a market force,

  • it changes the analysis of what you talk about,

  • and we talked privately many times,

  • but one time we were talkin' about

  • the maturity and size of the on-premises IT market,

  • it wasn't "Oh, IT's dying!" It's like huge! (laughs)

  • I mean it's massively mature, so,

  • and we talked privately about that;

  • that's somethin' that a lot of people missed,

  • they didn't miss that the size of the market was so big,

  • might've been you know flat, but it's a ature market,

  • but then these outside forces transform,

  • and now the deal with Amazon highlights

  • that bet. >> It's a two way street,

  • now it's goin' the other way.

  • And look, if it's obvious,

  • there's probably no opportunity, right? (laughs)

  • And so, you know I've kind of made my life of

  • doin' stuff that maybe wasn't quite obvious to everyone,

  • okay fine, that's just how it goes.

  • So, maybe it wasn't obvious to everyone,

  • and I remember when we announced,

  • you know in 2015,

  • everyone was like "Whoa, whoa, what are you doing?"

  • right, so why are you doing it?

  • And now it's kind of like oh,

  • that seems like a really good idea, right? (John laughs)

  • Look,

  • I'll tell ya what I think is maybe not so obvious right now,

  • although I think people are startin' to figure it out,

  • is boom on the edge,

  • I think the edge will be bigger than the cloud.

  • The private cloud, the public cloud, the SaaS,

  • the edge will be bigger.

  • >> And what are some of the tell signs on that?

  • How can you tell?

  • >> Okay. Very very simple,

  • go to ARM, and say how many microprocessors,

  • and sensors and controllers should be sold?

  • 120 billion, okay.

  • Seven billion people in the world, 120 billion,

  • that's already sold!

  • Okay.

  • This isn't the next five years or 10 years,

  • the numbers are only going to go up;

  • and that's just ARM!

  • So, you think about everything becoming intelligent,

  • the cost of making something intelligent going to zero,

  • the cost of prediction,

  • in the form of AI, and learning,

  • and inference going to zero,

  • and how that refactors the economy

  • and the explosion in data as a result.

  • Oh my God. (laughs)

  • >> So that's a-

  • >> Incredible opportunity for infrastructure.

  • >> So that's a factor that makes

  • that AWS VMware deal more sensible,

  • because the conventional wisdom was just that,

  • it was a one way trip to the cloud;

  • it's turned out to be a boom for the data center.

  • So, edge is maybe one reason why, but,

  • perhaps there are others, your thoughts?

  • >> Well it's, you know,

  • look at TensorFlow, you know we,

  • let's just go back to our last quarter, right?

  • Server and networking business grew plus 41%.

  • Well if server and networking business is growing plus 41%,

  • everything can't be going to the big three public clouds,

  • it's not.

  • So there is a boom on the edge,

  • it's the AI, it's the ML,

  • it's the software-defined data center,

  • cloud is an operating model not just a place, right?

  • And, you know, again,

  • you know big growth in our appliances,

  • you know taking all the innovations of VMware

  • and expressing those in

  • you know consumption models and

  • you know making it easy for customers to deploy,

  • it's all workin' quite well.

  • >> You mentioned the-

  • >> And we're uniquely positioned

  • you know as Dell Technologies

  • to be the best choice for customers.

  • >> Yeah, you're the store for all of us.

  • I want to drill down on the IOT edge boom,

  • the tell sign you mentioned

  • is really interesting, I like that,

  • but also I want to tease out what

  • Pat Gelsinger said on stage yesterday, he said,

  • you know IOT,

  • 'cause you know we're being kind of critical of the IOT,

  • not super critical but, it's maturing,

  • but there's no real products yet available in a true sense.

  • But Pat said "It's being connected now."

  • So you mentioned ARM,

  • penetration used to be,

  • you know that from the PC game,

  • everyone should have a PC,

  • now everyone's got PC's and laptop's;

  • so the penetration game is not the issue,

  • they're already there.

  • So as things be fully connected with mobile,

  • it's not so much the penetration numbers per se,

  • it's the network ability, and the intelligence, so.

  • >> Yes, that's right.

  • >> AIOps on the IT side,

  • AI in apps,

  • and Pat said the apps are the networks,

  • so this is a new networking dynamic,

  • networking things together,

  • making them more intelligent is the new metric,

  • do you agree?

  • >> Absolutely, and look,

  • most of the 120 billion aren't connected, but,

  • you know they're going to be connected

  • >> They have phones. (laughs)

  • >> And there's going to be 1.2 trillion, right,

  • it's just going to keep growing.

  • You know in five years, in 10 years,

  • it's going to be way way more,

  • and then you got 5G coming,

  • and it'll be node-to-node connection.

  • And so, yeah, and then you overlay the AI,

  • it's, all of this is reinforcing itself.

  • You know at the center of this

  • there's a relatively simple thing that's happening, right?

  • And it starts with data, right?

  • And you know this is no different than it was

  • in the '60s or '70s, right?

  • With the beginnings of IT,

  • it's just now, the cycle is going much faster.

  • Starts with data.

  • With your data, you make better products and services,

  • right, and when you make better products and services

  • you attract more customers, and you get more data.

  • It's just now, right,

  • the number of devices, number of nodes,

  • and the network connectivity,

  • and then you insert AI and machine learning

  • and neural networks, you know etc, on top of the data,

  • and then it goes even faster.

  • And that wheel's just spinning faster and faster and faster

  • and it's not going to slow down.

  • >> It's causing a renaissance. >> You talk about networks,

  • and I, there's a metaphor,

  • I like the metaphor of networks of data.

  • And you talk about you know you lived for decades

  • on the cadence of Moore's Law,

  • well that's not the innovation anymore,

  • John calls it the innovation sandwich

  • data plus AI, and cloud for scale.

  • >> And you'll take your intelligence,

  • and your compute, and your infrastructure to your data,

  • that's why there'll be a boom on the edge;

  • we're already seeing it in manufacturing, in retail,

  • and you know,

  • anybody that thinks that

  • everything's goin' to the center of the universe somewhere,

  • it's jut not right.

  • But hey look,

  • when there's some disagreement there's opportunity,

  • and I'm perfectly willing to step into that opportunity.

  • >> Opportunist! (all laugh)

  • >> So obviously you're doing well on the upside,

  • and the rest of your take,

  • and what I think the operating model's interesting,

  • you mention that cloud and DevOps

  • flipped everything upside down,

  • where apps are now programming networks.

  • What you're talking about with data

  • is a sideways force coming in,

  • that's disrupting IT's footprint

  • as well as the operating model,

  • and I think this is what,

  • I think it's compelling what this new flywheel between

  • cloud, mobile, ML, AI, and edge,

  • is that that integrated flywheel

  • is this vitreous circle.

  • More compute, faster access to data,

  • faster access to data, better AI.

  • So better, more data, more accurate data, better AI,

  • that circles around, that's a flywheel.

  • This is coming sideways, this is not an upside down,

  • this is just a ...

  • >> And what our customers are realizing is that

  • because of all this,

  • they need to have more developers, right?

  • And they need to express their competitive advantage

  • in the form of their data and with software.

  • And, so what they want is a developer friendly,

  • developer ready secure infrastructure

  • that is cloud agnostic, cloud neutral,

  • and can operate in an autonomous fashion;

  • and they can decide exactly where to put workloads,

  • based on security, performance, cost,

  • you know, etc, right?

  • And it'll be a workload dependent type discussion.

  • And you know again,

  • with Pivotal, with VMware, with Dell EMC,

  • we are really well positioned

  • to help our customers with that.

  • >> So I got to ask you, so if,

  • what you just described, to me, is a new era,

  • it's not a cloud of remote services anymore,

  • it's this ubiquitous, intelligent platform;

  • and it feels like it requires a new brand. (laughs)

  • And we're seeing the evolution of the Dell brand,

  • the Dell EMC brand, now Dell Technologies brand;

  • talk about the brand, and what we can expect going forward.

  • >> I would say, light touch, right? (laughs)

  • And so, you know we,

  • revealed the Dell Technologies brand when we

  • did the combination,

  • but we also kept the

  • you know important brands that've been part of

  • the companies history, in the form of VMware,

  • and Dell EMC, and Pivotal, and so.

  • >> RSA.

  • >> Exactly. SecureWorks,

  • and Boomi. >> Boomi, yeah.

  • >> And so, if you've got a business that's

  • you know close to $90 billion,

  • and it's growing at 17, 19%,

  • you know you don't really sit around and say

  • "Hey, let's change a bunch of stuff!" Right? (all laugh)

  • So, I think people are understanding what we're doing,

  • they understand what Dell Technologies is more and more,

  • and the brand is resonating well;

  • so we feel very good about how all that's working.

  • >> You said on theCUBE here that

  • VMware's the crown jewel of Dell Technologies,

  • obviously you can see the results.

  • Elaborate on that now,

  • give us the updated answer today, 'cause obviously,

  • you look at some of the things that are goin' on.

  • You know NSX has turned out to be

  • a very good investment payout from VMware

  • as kind of an interconnection point between multiple clouds,

  • the Amazon relationship is deeper,

  • and it's very clear for the field sales teams,

  • it's great go-to-market from what we're hearing.

  • And then the senior managements are involved

  • in both levels of those companies.

  • So VMware actually is interesting position

  • in going to a whole nother level.

  • Update us on the crown jewel status of VMware.

  • >> So, you know within the world of infrastructure,

  • in the software domain, a software-defined data center,

  • you know VMware is the successful company, by far, right?

  • And, the level of innovation that is coming from VMware

  • is really profound,

  • I mean it's the highest it's ever been,

  • 'til next year, right? (laughs)

  • Just go back and look at Pat's keynote

  • and the things that've been rolled out,

  • and you know we're completely and tightly aligned

  • you know as a Dell Technologies family, so.

  • You know VMware is at the center of everything we're doing,

  • in all of the areas that we've talked about.

  • At the same time, right, we've kept the ecosystem open,

  • you see here on the show floor,

  • the whole industry well represented,

  • and participating and engaged,

  • and that's been an important part of VMware's

  • success from the beginning,

  • and will be forever.

  • >> Well we used to laugh out loud,

  • belly laugh when people said you were going to sell VMware,

  • I mean it was just like that made no sense, (John laughs)

  • but it's given you incredible financial flexibility,

  • it throws off cash,

  • it accounts for nearly, I think roughly half of the profits,

  • and now you're taking the $11 billion dividend

  • which gives you the ability to

  • clean up the capital structure,

  • create more clarity,

  • and then become a public company again;

  • so can you talk about that a little bit?

  • I don't know how much you can say but,

  • you know we used to joke about the 90 day shot clock,

  • seems like that's where you're goin',

  • you're obviously comfortable there,

  • you're a well run company.

  • Your thoughts?

  • >> So, you know,

  • I've been doin' this for almost 35 years (laughs)

  • and 25 years of it, you know,

  • we were a full public company,

  • we're actually a public company now, right?

  • We make all the public filings,

  • it's all out there and available;

  • but the equity of Dell Technologies so that the,

  • we have a proposed transaction, which you've seen.

  • The proposed transaction will have the effect of

  • retiring the tracking stock,

  • which we created in the combination.

  • >> At a great premium.

  • >> Exactly.

  • And that,

  • you know, retiring the stock,

  • it'll be replaced with a combination of cash

  • and equity in Dell Technologies.

  • What I see is no change in how we're operating,

  • and our strategy,

  • our relationship with our customers and partners,

  • and in VMware's independence.

  • You know, what I would tell ya,

  • if you've got any further questions

  • we have SEC filings, you can refer to those,

  • we've got all kinds of answer in those,

  • and we have an investor day coming up

  • you know in September where

  • you know we'll go into more detail.

  • >> Is that at HQ, the investor day,

  • is that in New York?

  • >> That's in New York City.

  • >> Well, products drive value,

  • value provides customers the ability

  • to pay you for those valued services,

  • that's called a business model,

  • you've got a good one goin' on.

  • Congratulations,

  • congratulations on the great bet,

  • and it's great to see the results

  • and it's fun to keep in touch,

  • thanks for comin' on theCUBE, really appreciate it.

  • >> Yeah, congrats!

  • >> Thank you guys very much, thank you.

  • >> Thanks for spendin' the time.

  • >> Thanks for the great coverage. Alright.

  • >> Great to see ya.

  • >> Michael Dell here on theCUBE at VMworld 2018,

  • I'm John Furrier with Dave Vellante,

  • more live coverage after this short break, stay with us,

  • we've got full day two and day three coming

  • two CUBE's here in Las Vegas, stay with us,

  • we'll be right back.

  • (bubbly music)

>> Live from Las Vegas

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