Listen: Next in Tech | Ep. 183: Exploring Broadcom VMware

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Speaker 0   00:00:00

Welcome to NextTech, and S&P Global Market Intelligence podcast with the world of Emerging Tech Lids. I'm your host, Eric Hanselman, Chief Analyst for data and insights at S&P Global Market Intelligence. And today, we're doing a special addition to the podcast coming from the Broadcom VMware Explore Conference in Las Vegas. I've got a number of the analyst team here with me, and we're going to take a listen to what their perspectives are. And what's been an interesting conference. This is a transitional period for the Broadcom VMware transition, and we'll see where it goes. And I'm here with Geleen -- what are your thoughts about Explorer and some of the announcements that you've heard so far -- any highlights?

Speaker 1   00:00:44

Yes. Well, one interesting thing is that they are returning to the cloud foundry branding, which had been sort of raised after the acquisition of Pivotal. And I think that's a really smart move because it's got a very loyal customer base. And a lot of people when it became Tanzu Application Services or TAS, A lot of people didn't really cotton onto it. And one of the customers that we were speaking to said that it's a much easier sell to his executive team. He's the Head of the Platform Engineering department. And when you say you're using Pivotal Clogfoundry, he's like it's a no-brainer, whereas when he tried to get funds for Tanzu Application Service, it was another story.

Speaker 0   00:01:29

So is this something we're basically getting back to those open source routes of the cloud foundry project than a number of things actually are a benefit in terms of how they're addressing the market and how they're actually delivering capabilities.

Speaker 1   00:01:41

Yes. And in fact, one of the things people love about Cloud Foundry is the simplicity of the deployment, so the CF push motion for pushing an application. And they've now with Tanzu Platform 10, they're going to be having similar commands, Tanzu deploy, Tanzu bind and tons of build, I think I don't have to go back and check and see if those are the ones. So they're really trying to bring simplicity to the development process and the putting applications into production. Now as the customer we spoke to pointed out, this has got to be a top-down selling motion. It's got to go through -- if you're selling a platform, which is basically what Broadcom is doing with VMware is turning it into a platform that is going to be a level above the infrastructure. not only for Kubernetes. Kubernetes did a similar thing. It sort of raised the level of addressable infrastructure up closer to the application. If you're going to do that, you need to have buy-in at the top level. And so it's not going to be every developer for himself, they're bringing their own tools. So if they can get the commercial side of it working out and if they can actually deliver on the promise that they're making with this platform, it could be very successful.

Speaker 0   00:03:09

Being able to eliminate a lot of the complexity, pulling this all together in a fully integrated capability that raises what the delivered value is, is a step above the infrastructure, a step above just the component parts of the application actually starting to be -- again, the promise of some of the platform engineering things that we've been talking really up at that higher level.

Speaker 1   00:03:32

Yes. And also, I find it interesting that they've also brought back -- well, they've always had the spring framework as sort of a prominent feature in Tanzu, but they're talking about addressing Java developers, which is something that I don't think Tanzu was all about Kubernetes at one point, and now they're bringing in not only the Kubernetes run times, but also the Java primitives that so many enterprise developers are used to and it...

Speaker 0   00:04:01

Because there's such a large base of Java code that's already out there, you've got teams that are well familiar with it, being able to integrate that into a modern platform, again, another positive.

Speaker 1   00:04:11

Yes. In terms of the cost and the changes, they say that it's not just a bundling exercise. It's not that they've taken all the SKUs and put them -- just bundle them into one SKU. If they do achieve the integration, I can see it being very appealing to those platform teams. And if they can -- if the platform teams can bring the developers along, and I see a lot of effort at improving developer experience in a material, salable way, then it could be a big success. I was surprised though to hear that VCF 9 is still not available.

Speaker 0   00:04:48

And that we don't yet have a date. So I guess we'll have to sit tight and wait until that turns out...

Speaker 1   00:04:54

Right. But if they were saying that it's going to -- I mean, they're very enthusiastic about it, which is good to see. But if they're saying it's going to have feature parity with things that are already out there and still obviously being developed, how can they say that if they don't know what features are going to be introduced in those competing platforms, and that includes the sited by name, Amazon Bedrock and...

Speaker 0   00:05:16

Google Vertex, right? It's the other one they were calling out...

Unknown Speaker   00:05:18

Yes.

Speaker 0   00:05:19

All right. Well, we'll have to see whether or not they can pull it off. Well, thanks, Jan.

Speaker 1   00:05:22

Sure. Thank you.

Speaker 0   00:05:24

I'm here with Melanie Posey, Research Director for Cloud Transformation. Melanie, what are your thoughts about EXPLORER?

Speaker 2   00:05:29

Well, the thing that struck me most about the event this year was the very interesting definition of private cloud, we heard. It definitely transformation of the way people have traditionally thought of private cloud. And with VMware being a software company, of course, private cloud isn't necessarily tethered to a location. Traditionally, we've thought of private cloud as being on-premises. But the articulation of it we heard here this week in Vegas at VMware Explorer has been that a private cloud is a platform that's portable. You can run a private cloud on VMware Cloud Foundation in your own data center, on your own equipment, you can take it to a public cloud like AWS or Azure, you can run it there. You can run it in a colocation facility. You can run it at the edge, Presumably, you could even run it on the moon if we ever get to that point, although latency could be a problem.

Speaker 0   00:06:40

Cloud and space, who knows, but it sounds like this is really sort of fulfilling what has been the promise of private cloud and really getting to that point where it's as cloudy as any other definition of cloud we happen to have out there.

Speaker 2   00:06:55

Right, exactly. And part of the definition we've had at 451 for years, more along the lines of flexible infrastructure is the idea of that cloud is not a place, it's a way of doing things. It's another destination. It's an operating system. And we heard some of those same sentiments reflected in what we heard at VMware Explorer this week that what makes infrastructure, cloud or cloud or cloud Lake is the abstraction, it's the ability to do a lot of management and remote deployment, orchestration. It all comes down to automation, essentially and the ability to provision capabilities on the fly, shut things down, bend them up and having a central management for the whole kit and caboodle regardless of where it happens to be located. And I think VMware is definitely onto something with their definition of private cloud, it's inextricably linked with automation, orchestration, location agnosticism that resources are available where an organization needs them to be the venue is determined by corporate policy determined by what is the time frame? And you're basically seeing breaking down of a lot of these definitions we've lived with for a long time about what is public, what is private. And one interesting aspect of this is the extent to which we've heard about how VMware is broadening and deepening its ecosystem of partners that we saw Azure and Google and AWS on the show floor, they're all quite interested as well in tapping into VMware's customers, which are numerous and quite loyal and serving their public cloud needs in a way the best suits those customers that you want to take your VMware cloud foundation environment to the public cloud? Do you want to take it to the edge, fine. Cool. -- whatever you want. So I think that's the future of IT is it's not constrained by the market segments that we analysts like to create for everybody, but it has to do with the beer needs within an enterprise and the varied needs of different applications and workloads within that enterprise. So flexible infrastructure is what people need in a digital economy where IT happens everywhere and business is increasingly digital, and it's all dependent on IT, and it happens everywhere.

Speaker 0   00:09:55

And we've got to have infrastructure to support it no matter where it happened.

Speaker 2   00:09:59

Exactly, exactly. So I think VMware is creating an interesting paradigm here, and we'll see that paradigm expand into other areas. We heard a lot about AI and the private cloud for AI construct that we heard quite a lot about at the event is something that needs to be flexible by definition because it's not at all clear where our AI is going to happen for enterprises. And I think the point is it's not going to happen in one place. It's going to happen in lots of different places. The model is over here. The training is here, the inferencing is there. The end users are over here the new data ingest points are maybe somewhere again...

Speaker 0   00:10:52

Wherever the heck else they will end up being a...

Speaker 2   00:10:55

So flexible infrastructure is what you need for modern IT and modern digital business and private clouds are going to be a big part of that and the extent to which those private clouds are flexible and agile and portable is going to be key to the successive organizations that want to be able to do things on premises in the cloud, at the edge in colos. -- you can't really put the GE back in the bottle as far as like, well, you need a data center for IT to happen? Like, yes, you don't have data centers everywhere, but that data center might be a device that you can hold in your hand. We've now got to take it to the scale and the locale in terms of where we need it, there has to be infrastructure to support it. Exactly, exactly. So all in all, it was a really good event and a lot of interesting new ideas came out of it for me. And I would expect a lot of other vendors in this space. I guess you could call them enterprise IT data center incumbents to take note of this and maybe change some of their own thinking about what is private cloud, what is public cloud and maybe it's time to stop having that fight about which one is better...

Speaker 0   00:12:17

Making those definitions a little cloudier.

Speaker 2   00:12:21

Look gets you clouding the issue all the time...

Speaker 0   00:12:24

Well, thanks, Melanie. This has been great. Appreciate it.

Speaker 2   00:12:28

Thanks, Eric. Always happy to talk to you.

Speaker 0   00:12:30

I'm here with Henry Baltazar, Research Director for storage. Henry, what are your thoughts about EXPLORER?

Speaker 3   00:12:37

Yes. Thanks, Eric. Happy to be here. I think it's been a really interesting show. I mean, a nutshell from my perspective as an infrastructure person, it's interesting to see what kind of war is going to be between the old and the new. Because at the end of the day, when you look at it, we kept hearing the message, it's about VCF, it's all about platform, it's about going full stack. And the other stuff is inefficient. Well, an inconvenient truth is Broadcom makes a lot of money on the other stuff. Perfect competitio that is like there's nothing more siloed stack than fiber channel sand switches and Broadcom happens to be 1 of 2 vendors at sides. And that happens to be a very lucrative business for the company. So the point I'm trying to make here is, as with base start pushing and picking their winners and losers, pushing what the direction is they want to put their customers in, just a reminder that they have some consoles on that legacy side as well. And it will be interesting to see, well, what happens to those legacy resources? How do they transform what is the future because one thing that we didn't hear a lot about could be interesting is what happens when you have a top software player and a top hardware player and what kind of feature could that be? We haven't really heard anything about integrated solutions with both those together, but that could be a potential interesting future.

Speaker 0   00:13:50

Well, it is something we've seen in this new world of AI. NVIDIA also happens to do networking. They happen to do InfiniBand. They also happen to do Ethernet. Of course, Broadcom as well as Fibre Channel is a big player in Ethernet silicon? So...

Speaker 3   00:14:07

Yes, again, I think that's why it's interesting. It's like where do they want to go with this and what's the direction? Clearly, the direction here is emphasizing Well, also it's the VMware are show. Obviously, it's going to be all about software, software, software, how are we going to build the stack, how are we going to simplify things. At the end of the day, they've got some -- they've got skin in the game on the other side, and they've also got assets on the other side that could be interesting later on. whether that's something that comes out later as they build out more of these capabilities that could be interesting, too. Because, look, the examples are out there, whether you look at an Apple or any of these hyperscalers, that mix and match of having that IP on both the software side and the hardware split could be something interesting and actually have that capability even though we're not talking about it.

Speaker 0   00:14:51

Well, in some of the sessions, they're bringing together the Broadcom Ethernet team and the VMware team. So I guess maybe we're seeing some of the early days of exactly that.

Speaker 3   00:15:01

Yes. I think it will be interesting. There's a lot going on, a lot of capabilities, a lot of different markets and different areas where they can make this 1 plus 1 equals 3 type of thing happen. But I'm excited to see where that goes because that seems to be the next step. Right now, they're still focusing on this is why we're transforming right now. This is why you need to be doing this instead of a more traditional layer cake or multiple stack silos and how that goes going forward. In the meantime, though, I think the one thing I want to turn to is also it's not just us that make these decisions and what the implications are, it's the partners. If you look on the floor, there's a lot of those partners there that are on those siloed stacks. And even though Broadcom is making money with them, there's also clearly a bull's-eye in terms of where they want to go versus what those companies are doing, especially if they're selling a dedicated, let's say, storage product or a dedicated networking product or dedicated other product that fits in the silo, et Cadimagainst what they've been pushing.

Speaker 0   00:15:58

And we saw Broadcom's CEO, Hock Tan, kick off with a keynote saying that silo busting was exactly what he wanted to do. you even got kind of colorful and made the comment that if you're still in a siloed approach, I think his phrase was, you are so screwed. So...

Unknown Speaker   00:16:17

Yes...

Speaker 3   00:16:18

I got to say it's entertaining and it's great, and it's good to see somebody who's not afraid to break stuff. So -- and but I think that's the area we have to have. But again, breaking stuff means there's something to lose. That's why I brought Blacks going to get broken. -- legacy business is still profitable. And nobody wants to go and say, "Oh, that's a great business. But hey, if it's generating a lot of revenue and a lot of profits and you're 1 of 2 vendors selling it, -- there's something to lose there. So it will be interesting to see how these things play out and how much they're willing to rejigger the legacy product or rejigger where they're going, you get to take advantage of these industry leading type of engineers that they have, and there's probably something that could happen here. But again, here, right now, the focus is on let's establish or continue to establish where they are as a software platform. continue to move up and up the stack, continue to entrench themselves even deeper with the customers. But the long-term future seems interesting to where they could go with some of that integrated engineering going forward.

Speaker 0   00:17:15

A lot of interesting potential. We'll have to see how it plays out. Well, thanks, Henry.

Unknown Speaker   00:17:18

Thanks a...

Speaker 0   00:17:19

Here with Liam Eagle, Research Director for our survey product, and a member of the cloud team, Liam, what are your thoughts about Explorer?

Speaker 4   00:17:28

Yes. Thanks, Eric. So I guess because several of my colleagues on the cloud team are also here, Melanie my particular sort of point of view or lens on this event is probably going to be more related to the cloud service provider partner aspect of the things that they're doing and the the sort of response or the meaning of some of those announcements for that community. So I guess the first thing that I was sort of thinking about was the vCloud Foundation F9 launch or the announcement, I guess, not the launch and the launch to come impending launch. So the interesting thing about that from the perspective Well, so what that may represent for the enterprise users of VMware is the sort of shift in their -- the company's attitude toward or its philosophy about how it packages and bundles these things. So I think these functions go from being disparate products into being a platform for operating a private cloud, and it's a unified product and it's a unified platform. The sort of effect of that in a sense for some of the organizations that might use parts of that coal is almost a sort of kind of forced bundling or they're being given things that they might need to figure out what they're going to do with or they might really change how they think about their relationship with the platform. The interesting thing from a cloud service provider standpoint is they're already building a whole cloud platform in a lot of cases, right? So these CSP partners of VMware BCF9 is going to look a lot like what they're already doing, but it will have, I guess, the change will be that sort of unified product experience as opposed to the sort of architectural change. So that's interesting.

Speaker 0   00:19:12

And so for the CSPs, that really means that there is a much more unified delivery platform. So it seems like that's going to make that look relatively -- it will be more common across the various CSP partners as a result.

Speaker 4   00:19:25

Yes, that's very possible. I think you might see parts of that BCF platform replace the kind of unique components that they might be using from other vendors. And whether that's to the benefit of the CSPs in general, Richard remains to be seen or it's kind of up to the CSPs themselves. I think from the sounds of it, I mean, I guess you could take what VMware says with a great saltmentit sounds of it, a lot of those spokes are recognized this as being something they want or that appeals to them. I think part of that is partly due to the fact that with some of the partner program changes that VMware made in the wake of being acquired by Broadcom, I think the partners that remain are very invested in VMware, right? They're sort of VMware shops. So I think this unification of the platform is right in line with the way they operate and want to operate a get a lot of cases. The other thing that I thought was really interesting, if you don't mind me just carrying on here...

Unknown Speaker   00:20:19

A bit...

Speaker 4   00:20:20

Is the -- sorry, I'm a little bit overwhelmed with terminology, but I think private AI foundation was the name platform that VMware sort of launched recently and sort of describing Vision 4 at this event. As you know, I operate our Voice as a Service provider survey product. And one of the things that we do with that is we survey cloud service providers, managed service providers, SIs, and few other types of service providers. And one of the recent surveys that we've done, which actually probably will have published by the time that this airs, but if not sneak peak, we did some surveying around AI, as you would imagine, and what the opportunity looks like for service providers. So one of the things that we asked them was the idea of sort of shepherding your customers through this AI, figuring out and adopting and implementing journey, what does that opportunity look like for you? And really overwhelmingly service providers view that as a significant opportunity for their business, right? How do we help our customers get their arms around this and sort of work through the infrastructure component and all the various technology components and then sort of the execution component. But effectively, none of them feel like their capabilities in that sphere or in terms of the capabilities required to capture that opportunity are fully baked. So there's this sort of window where their vendors and their technology suppliers have an opportunity to kind of come in and say, here are some here are some things that we can help you accomplish in order to build up those capabilities. Now we also ask them what are you looking for from your vendors in this case in terms of help and the top things that they cited were basically instruction on how to architect the platform that's going to help them deliver these services and then also input on the sort of strategic approach to designing and executing these initiatives. So that VMware private AI foundation platform is a really interesting product in light of that requirement...

Speaker 0   00:22:17

It sounds like it arrives at a time when providers are looking for how they actually address this...

Speaker 4   00:22:24

Exactly. They're not just saying, we need a technology they're like, we need a vision for how we're going to accomplish this. And I think there's like that opportunity really matches with this platform, this offering, right? So it remains to be seen how that plays out. And I think it's 3 months old. It's not been in the market for a long time. I don't think there's a lot of cloud service providers out there running fully big versions of this platform, but that would seem to address some of that requirement, right, where VMware is kind of in a position here say, "Hey, this is a reference architecture or a framework for helping your customers get -- that could be interesting.

Speaker 0   00:22:56

Pathway in terms of what can help them get their customers on their way further along in their journey.

Speaker 4   00:23:01

And not to mention the sort of flexibility to sort of swap out parts as they kind of identify their own sort of specialties and best practices and customer requirements, customize it to fit.

Speaker 0   00:23:11

Yes. But at least to be able to come to this with at least a general design in terms of directionality...

Unknown Speaker   00:23:16

Yes.

Speaker 0   00:23:17

I have to see how it pans out. Much more to come...

Speaker 4   00:23:21

Thanks. Do you need anything else for me. That is it? Great because I don't have anything...

Speaker 0   00:23:26

Well, thanks to all of the analyst team for all of their perspective. This has been an interesting conference where VMware has been looking to change the narrative about private cloud. I would say they're taking on the hyperscale cloud providers at their own game looking to be able to provide the kind of integrated capabilities and more importantly, some of the high-level services to raise the kinds of approaches they've had and what they're targeting in terms of market approach to a higher level of abstraction of basically looking to provide good enough services as they look to be able to address this market and move through what has been, I think, most would identify as a disruptive year for the relationship with both customers and their partner ecosystem. So we'll have to see where this takes us. And that's it for this episode of -- next in tech. Thanks to the audience for staying with us. And thanks to our production team, including Sophie car, Banmedica and Kira Smith in the marketing and events team and our agency partner to 199. Jonas for our next episode where we'll be discussing what's happening at Dreamforce, a little bit of a preview for the Salesforce conference coming up. I hope you join understand because there's always something next.