In-Depth

10 Questions, 10 Answers with Ray O'Farrell

The VMware CTO shares his thoughts on the Dell buyout, vendor lock-in, VMworld 2016 and more.

1
What activities occupy most of your time these days?

Ray O'Farrell: As the CTO and CDO [Chief Development Officer], I drive VMware's engineering teams, in close cooperation with our business unit leaders. I spend a lot of time looking at the company strategy and our business and product plans, and translating that into the solid engineering that drives customer success. I also have responsibility for our Global Services and Customer Advocacy teams. What that means is that I have a clear view across the entire customer experience. Given how much the company has changed from when I joined more than 13 years ago, it's important to have a real-time view into our customers and fully understand the journey they're on.

As a result, I meet with probably hundreds of customers every quarter. It's invigorating to hear how we are helping them innovate and succeed. I listen to their concerns in order to address their issues and to understand how we can improve. We take that input to drive the transformation in our capabilities and offerings to best meet their needs.

Our customers see the opportunity that mobility and cloud can provide, but how, exactly, to best take advantage of these tectonic shifts is less clear to them. Consider that a single customer may have a situation where it's using AWS for a number of its new mobile apps, Microsoft cloud-based platforms for collaboration tools, a large outsourcing agreement with a systems integrator leveraging a managed cloud, and a huge datacenter footprint running on VMware's private cloud platform. This same customer also has a bunch of SaaS [Software-as-a-Service] applications, and employees and partners connecting to these services are using mobile devices the company doesn't have control over.

Managing all of this complexity is the biggest challenge faced by IT managers and CIOs today. Their executives are telling them to provide security, reliability, governance and fiduciary guarantees against a landscape where they increasingly don't manage the datacenter, they don't own all of the infrastructure, they don't control all of the networks, with users on devices they don't provision, for applications that increasingly they didn't write and often reside in public clouds.

And that's exactly their job today: They've gone from a world where essentially they controlled everything, and now they have the same responsibilities yet have direct control over very little. That's a very different world than when I came to VMware 13 years ago. The cool thing is that I play a key role in driving the next generation of VMware solutions that can help these customers take advantage of the mobile-cloud era and transform into digital businesses.

2
What's your take on the Dell merger? Will it be a net positive, neutral or negative for VMware, and why?

Before I go specifically into how this impacts VMware, I think it's important to address this from the Dell and EMC perspective. This deal creates one of the largest mega-IT infrastructure companies on the planet. It's no secret that we're seeing a trend around industry consolidation; my opinion is that Dell and EMC are playing a leading role in that trend. In my view a merger of this scale, yet involving so little overlap in technology and market segments, is uniquely positioned to make customers the winner here. Think of the combined capabilities of this new company. Customers will enjoy cost-effective, scalable, standardized hardware and software offerings that can come to bear through the amazing supply-chain efficiencies driven through more powerful innovation engines and talent that the combined company will offer. I know many of our customers are excited about this.

Now, for VMware, we'll have the economic interest of this mega-IT infrastructure behind us to accelerate our growth. At this time last year, there were many questions in the media about VMware's stability, and I believe the Dell-EMC transaction puts those concerns to rest. We'll have a majority owner who isn't likely to be taken over, while we have Dell's financial interests to help us turbocharge our growth. Against the backdrop of the huge potential we see in the markets we've set our sights on, I see a great future for VMware.

3
What have your interactions with Dell executives been like?

We hosted Michael Dell and several Dell executives recently at one of my favorite VMware events, RADIO. RADIO is our company's R&D Innovation Offsite. Now in its 12th year, RADIO brings together as many as possible of our engineers for networking, learning and innovation opportunities through events around the globe, starting with a big RADIO event in San Francisco in May each year. RADIO helps foster discussion around unexplored ideas that would be impactful for the company. It's much more than a mere seminar or convention from our engineers; it's a powerful focus for driving highly collaborative innovation across all of our business units and worldwide R&D teams.

Seeing the Dell executives at RADIO in San Francisco clearly demonstrated their commitment to VMware innovation. You don't always expect senior executives from a different company to get excited about such an internal "geek fest," but they were truly inspired. Michael Dell in particular spent many hours on our "internal exhibit" floor, meeting with and chatting with engineers as they spoke about future projects, ideas and new technologies. VMware's life is innovation and fostering people who can innovate. I can see the great value Dell is placing on ensuring that engine is fueled and thrives, so that makes me very comfortable for the future.

I've also been a part of some of the discussions around preparing for what we can do together after the deal closes. We can only plan at this point, but together we're working aggressively to have as strong of a start as possible when the transaction is completed. Imagine new joint offerings, programs and other ways that together we can accelerate VMware's growth. This is a very exciting time for VMware.

4
Do you believe Dell will be hands-off when it comes to VMware?

The key to VMware's success is created by the open ecosystem that we've carefully cultivated for over the last decade and a half. Dell recognizes that we thrive on our vibrant ecosystem of partner networks, including OEM partners, systems integrators, solution providers, resellers and customers. Dell's intention is to make sure VMware continues to be successful as an independent public company. They have stated that they'll support our open ecosystem and not place any limitations on our ability to partner.

But there will be many places where we and Dell can work together for the benefit of our customers. After the deal closes, you'll see a lot of interesting solutions we can tackle together. We're looking at trends in the marketplace, and seeing how we can take collective pieces of our portfolio and uniquely address these trends with complete solution offerings for different market segments.

5
What is morale like at the company? Are the high-level departures worrying employees?

When the Dell-EMC deal was first announced many months ago, there was some uncertainty in the marketplace. I think that's normal and something you find with any large deal. Employees felt the uncertainty, as well. A lot of questions emerged. Since then, our leadership team is doing its very best to stay engaged with employees and make sure that every question is heard and answered.

Fast-forward to today, and I feel all the uncertainty created by the deal is dissipating. Our employees, like the marketplace, see our strategy is working, and we're gaining momentum. At the same time, we are investing more and more in our people.

For a vast majority of our employees, their jobs after the deal are the same as the ones they had before. I know it sounds simple, but everyone from our sales teams, support teams and engineers have questions about what could change for them. Employees read all the press that comes with a deal as large as Dell-EMC, and they have questions. One of the rules for senior management right now is to communicate, communicate, communicate.

Employees value VMware's very unique culture here, that is anchored in our EPIC2 [Execution, Passion, Integrity, Customers and Community] values. I make sure that we consistently reinforce the important fact that not only will our offerings remain intact, but so will the culture that has made VMware a great place to work for so many years.

I know that there have been a number of executives who have left VMware in the last year. But there are a few things I like to note about that: A couple continue to stay heavily engaged as strategic advisors, specifically Carl Eschenbach and Martin Casado. While they have moved on to exciting roles in venture capital, our customers and executives still benefit from their leadership. Also, in the past year we have brought on a number of industry leaders, while at the same time we've been focused on growing the responsibilities of some of our best internal talent.

I have been personally impressed by the caliber of leadership from new hires like Rajiv Ramaswami, who leads our networking and security business, and Zane Rowe, our CFO. At the same time, Maurizio Carli, a longtime VMware sales leader, is doing great work now leading sales globally, and Sanjay Poonen is working tirelessly to take our marketing and communications to the next level. These leaders are well-known, but where I have been really impressed is the strength of our talent at the VP levels across the company.

As we move forward, I see employees stepping up to the challenges and opportunities ahead, and we're increasing our investment to help our leaders to take on larger, ever more impactful roles.

6
Why have VMware's cloud efforts been struggling? What is VMware doing to establish its presence as a cloud player?

I want to remind people that as big as cloud is today, it is still a small fraction of the total IT infrastructure spend that has yet to be transformed. So many of the world's largest companies are still running legacy applications that they have put decades of investment in. But don't get me wrong, these companies very much want to participate in the future that embraces cloud and mobility. And we're stepping up to help customers through this transition.

While when it comes to mindshare, the mega-cloud providers are getting a lot of attention. But we believe that there is a significantly more diverse environment for cloud that goes well beyond the mega-providers. I'm not dismissing the big brands, but the idea that there are only four or so global cloud providers is simply wrong. There are countries where those global brands have zero presence vs. the local providers, and some of those countries will always stay that way due to country or regional governance, privacy and data sovereignty requirements. Also, many of the largest companies in specific markets, like financial services, will continue to run at scale and will build their own internal private clouds.

Unlike many of the mega-providers, VMware doesn't go it alone. It's important, when you look across geographies with different policies and governance laws, that we play a role in helping local providers stand up their public cloud offerings. VMware has a unique role to be the technology partner that enables this rich diversity in the ecosystem to really flourish. And we have done this by taking the capabilities of our Software-Defined Data Center [SDDC] portfolio and essentially franchising them across over 4,000 service providers: the VMware vCloud Air Network.

And it's not just the local providers who participate in our Cloud ecosystem, as evidenced by our recent partnership announcement with IBM on our joint cloud offerings. IBM has said that it's seeing an explosion in its pipeline of opportunities as a result of this partnership. And we're seeing that, too.

And, for companies who want to take advantage of the larger public clouds, we'll enable them to do that on their own terms. We do this by making our technologies work on any cloud. I really think of this in the same way as when VMware kicked-off the compute virtualization trend 15 years ago. It didn't matter if you used a server from Dell, HP, IBM or anyone else. And in the past few years, we've done the same with networking and storage and management. And now, we're moving to bring those capabilities across the clouds of your choosing. Perhaps you have a private cloud and a managed cloud, while you're running some new application development on AWS [Amazon Web Services] and leveraging the Big Data capabilities on Google's cloud. With VMware, we're allowing you to connect, run, manage and secure across all of those environments.

The new "infrastructure" is an SDDC or cloud, whether public or private: Just as we revolutionized the utilization and management of the infrastructure of the last decade, we will empower our customers to do the same with the new software-defined infrastructure of the next.

7
What are the company's three main initiatives going forward?

We have transformed from being a virtualization company to a company with broad focus on SDDC, enterprise cloud (public and private) and mobile management. Across all of the things we do there is an unwavering clarity and singular focus: continue to attack and solve the problems of IT, as IT teams become the center of the digital transformation of their organizations. This is what we do, this is what we will continue to focus on.

Bottom line is that we invest in extending our leadership in the SDDC, the work we're doing around enabling the enterprise cloud (and in particular, where we can leverage our leadership in the SDDC to securely connect to and manage across multiple clouds), and mobility.

I know I've talked a bit about what we are doing in cloud, and most folks know that networking and security is a top priority for the company, but I should also talk more about our strong focus on enabling a secure mobile environment. Imagine how many devices touch a business or interact with the business; the number is mind blowing. But if you look at how many of these devices have a secure, managed environment on them, there is a huge opportunity for VMware to step in and address through our End-User Computing portfolio.

Internally, we have been calling 2016 a transition year. With compute virtualization, we've hit the natural asymptote of this highly penetrated business. While we continue to innovate with vSphere, we are looking at the markets that are VMware's new strengths, where we have our sights set on the billions of dollars of market opportunity. Network virtualization with NSX, hyper-converged infrastructure with Virtual SAN, cloud management with vRealize and our mobility products have seen good growth for the last year or two, but now they have truly become significant businesses in their own rights. These are our growth drivers moving forward.

8
Does going with VMware mean accepting lock-in? Why or why not?

VMware has always embraced the benefits of an open enterprise ecosystem. From our early days in compute virtualization, up through what we're doing today in the cloud, we know that in order to be effective, you have to run an ecosystem that involves partners that, in some instances, may be competitive to ourselves. We have to, because we have to support the choices our customers make when it comes to their infrastructure.

Our engineers work on many Open Standards committees, to ensure interoperability and ease of use for our customers. We also have a strong tradition of participating in Open Source to drive innovations in networking, management, computer, storage and more. All this is to ensure an open operating environment with minimal lock-in for our customers.

And we also embrace emerging technologies in an open fashion. Containers are a perfect example of this. Many have claimed that containers are a threat to VMware, but in actuality, we see a huge opportunity. VMware has embraced container technology, and we are aggressively delivering a set of solutions to enable customers to have an infrastructure that is container-ready. Our strategy around cloud-native applications is to make containers first-class citizens, best supported on the VMware infrastructure. We do this because our customers want to explore containers, but in a way where they can still be managed and secured.

We embrace containers in two ways. Customers can jump-start their container initiatives on top of their existing VMware vSphere environments, or consume new infrastructure designed specifically for cloud-native applications.

First is the VMware vSphere Integrated Containers offering, which allows IT to just say yes to their developers, and support containers without changing networking policy, security or management. Second is the VMware Photon Platform, which is a built-from-the-ground-up solution that's optimized for applications leveraging microservices and Linux containers.

Customers are interested in both solutions, and we're engaged with customers in private beta programs. We have open sourced the majority of our cloud-native application technologies, such as Photon Controller, Photon OS, and vSphere Integrated Containers for interested customers and prospects to download and try today. We see containers as an important trend for the industry, and VMware is here with the infrastructure that our customers require to take advantage of them.

9
What can attendees expect to get out of this year's VMworld?

Every enterprise company, including our own, is seeing the disruptive effects of mobile cloud. There are changing business models where companies are going from perpetual and capitalized infrastructure to subscription-based models. These are violent shifts that we all together need to get through. Throughout VMworld 2016, you will be hearing us talk about how to best navigate to the other side of this tectonic shift, and in doing so, provide even more value to your customers. Our theme, "be_TOMORROW," really plays into this.

I'm really excited for this year's VMworld. For me, personally, there is no place better to network with customers, IT professionals, architects, developers, experts and partners. This year, we'll be exploring the latest technologies, trends and techniques that enable a "digital business." As we're mid-way through the year, one of the big conversations I've been hearing from customers is around this idea of being a "digital business." What does it mean to be a digital business?

As consumers, we're witnessing how digital businesses like Netflix and Airbnb are thriving. What's their secret? They're using software to invent new products and services, and new business models. Look at the automotive industry. Companies no longer make cars; they build a computer on four wheels. Clearly, software sits at the heart of today's digital business.

This transformation of business places IT not merely as an important part in keeping the enterprise running, but shifts IT into being the very heart of the business itself. IT is the conduit as to how a company delivers its products, understands its customers, delivers great experiences to those customers and competes within its industry. These are the new business priorities for IT. These are business priorities that VMware can help you deliver.

You'll hear a lot about how customers can leverage the VMware portfolio, built on our software-defined approach, to take the critical steps in this important transformation journey. We look forward to showcasing how companies must shift not only infrastructure, but also [their] mindset to act like a software company and become a digital enterprise to carry them into the future.

10
What accomplishment are you most proud of at VMware?

For me, it's first and foremost our people and our culture and how we have consistently held on to it through all these years, and through all the changes, acquisitions and growth. It is what has kept me here for so long; I love coming into work every single day to be inspired and challenged. Next, looking ahead to the future and what we can accomplish together—employees, customers, partners—is truly exciting.

I am super positive on what technology can bring to all our futures. Technology will be more than transformation of businesses, but will also dramatically improve the quality of life. But to do this, the markets will need to tie together machine learning, business intelligence, Big Data analytics and more. And with all the necessary connected devices and sensors, business will need to create an infrastructure that can be infinitely scaled. Yet with these capabilities new challenges emerge; security and privacy will be at the center of this newly connected world. I really feel the technologies VMware is accelerating right now will play a major role in this. I'm immensely proud to be part of a company whose people and technology have the capability to change every life on the planet, for the better.

But for now, I can see that as we traverse 2016, people are starting to talk about VMware as much more than the virtualization leader I joined 13 years ago. Customers tell us that, through the new technologies we are delivering, we are playing a big role in helping our customers navigate the enormous tectonic shifts occurring in the industry. With the momentum we are seeing in our new products, it's clear that VMware is playing a critical role in helping our customers across this mobile-cloud transition. Looking to the future and seeing what our customers need, and truly delivering on that based on a long-term trusted relationship and a reputation for innovation excellence, is what I am the most proud of during my time at VMware.

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