You mentioned earlier that every major initiative at #VMware right now has your cross cloud architecture #NSX as a part of it, so what are the three primary use cases for NSX in the market? As far as the roadmap for NSX is concerned what can we expect this year? The three primary use cases are automation, micro-segmentation or security and application continuity disaster recovery. Roughly, I would say 40% is automation, 40% is micro-segmentation and then the rest is disaster recovery application continuity. We are also seeing that customers start with one use case but then potentially add other use cases over time because it is the same software and they can they can start doing more. Typically, automation is with some of the larger customers who have bigger infrastructures that they need to fully automate. Security can go from very small deployments to very large deployments and disaster recovery, once you have two datacenters in play. So those are the three use cases that we see for network virtualization. As far as the roadmap for NSX is concerned what can we expect this year? So, we started out with NSX primarily deployed in vSphere environments in the private cloud. That continues to be the biggest market opportunity for us. This year what you will see coming out from us, we are extending NSX into the public cloud. What that means is that you will start seeing NSX now running along with our VMware Cloud Foundation on AWS. Wherever our VMware Cloud Foundation stack is run in the cloud you will also see NSX natively available on AWS this year. So when customers do cloud native applications on AWS they can secure that and automate that with NSX. The other thing that you will see is the ability to extend virtual networking into containers. The third thing is that we are continuing to enhance the capabilities and features of NSX the platform itself. More security features, more network services features, etc. So think about it in three vectors- public cloud, containers and more network services and continuing to enhance features. Can you give me a user reference example to show how it works for organizations using it? There are many public references we can count on. Let me pick on a few here. So let us take an insurance company. An insurance company is based on fundamentally the notion of trust, customers trust them because customers are paying them, buying policies and some day this policy needs to get paid out. When you are in that business of trust, data integrity and privacy become paramount. If you are an insurance company and you get hacked and your customer data gets released that is a make or break, you lose the trust that you have with your customers. So security is top of mind for them. We have many insurance companies that have implemented micro-segmentation in a proactive way inside their datacenters today, mostly all private cloud datacenters today to secure that infrastructure. That is a very strong use case, we have seen lots of deployments. Today, we have over 2,500 customers and we have deployments continuing to accelerate and the business has been growing. We announced at the end of last quarter that we are on a 1 billion $ run rate. Another example particularly with large scale companies like Citibank for example is automation. Citibank has these hundreds of thousands of VMs and for them to automate deployment of their private cloud they need to automate all the network services and doing that with the physical network is almost next to impossible. So they have implemented NSX in a very broad basis, one of the largest deployments we have to help them automate. They are also now with us on a journey to the public cloud. Citibank looks at what they do in the public cloud they would like to use the NSX capabilities that we are bringing out potentially to secure, they would like to think about using VMware cloud on AWS etc. So that is just a couple of different examples. We have other companies that have disaster recovery scenarios. These are smaller companies, maybe they have two datacenters. And what they are able to do with NSX is okay now I can run these two datacenters in active-active mode and stretch the network across and make those two datacenters look like one logical datacenter. Think of them as one pool of resources. Things can be moved flexibly back and forth across these datacenters and yes, if one datacenter fails then the other datacenter picks up. How do you play in the hyper-converged datacenter market? We believe we are the number one in hyper-converged. As of the end of last quarter we had 7,000 plus customers. We were on a 300 million $ annual run rate and keep in mind that is a pure software business. When our competitors talk about hyper-converged they think about it as a combined software-hardware appliance business. Typically, the hardware component of it is four to five times the software. If you are 300 million $ equivalent run rate, could represent something like a billion and a half revenue if you include hardware bundled in but we are a pure software company. So in hyper-converged, the product is called vSAN and it is built into vSphere which is our server virtualization platform. That provides two advantages. First is we do run in the kernel. We get higher performance than our competition which allows us in turn to run more VMs per host which delivers better TCO. You need fewer servers to run the same workloads, that is number one. Second, if you look at hyper-converged, lot of people buying hyper-converged are actually looking at it in the context of servers. When they do a server refresh they look at buying hyper-converged because from a hardware perspective it is the servers bundled with either SSDs or as traditional disks. So in that mindset if you are a vSphere admin you are operating vSAN in a natural extension. It is exactly the same tools that you used to manage your VMware environment that you then use to manage vSAN, that is number two. Third, we provide a very flexible way for customers to consume hyper-converged, lots of choices. If you want to buy a traditional appliance you can buy that through Dell today. We have an appliance called VxRail which includes vSAN coupled with Dell hardware all bundled pre-engineered as a solution. That is available today but we also sell vSAN as pure software and in fact if you look at what is going to happen over time and if you look at the model that has happened in vSphere, initially a lot of vSphere was sold bundled with hardware but if you look at what has happened to vSphere today people are very comfortable buying vSphere as software and they run it on all kinds of hardware. And we support any, does not matter what hardware it is, Dell server, HP server, Lenovo server, Quanta server, does not matter. In much the same way with vSAN we have the most flexible software offering. Customers can buy the vSAN software from us, once you buy vSphere you can add on a vSAN license if you like and you can run it on a whole range of underlying hardware. We support a range of different options. We provide a lot of flexibility in terms of how customers can consume hyper-converged, not just restricting to an appliance. What do you think of the web scale IT and datacenters? How do you think organizations should rebuild their datacenters in this era of cloud and digital transformation? In a nutshell you consolidate, you virtualize your full datacenter including compute, storage, networking and then you add cloud management, and automation for both operations as well as blue printing and provision. And if enterprises do that it allows them to build a web scale right datacenter with a full private cloud consumption model that looks much like a public cloud. How does VMware view India as a market? Where do you see the opportunities lying? India is a strategic emerging market for us. We see a lot of opportunities both in terms of what you are doing basics as well as new technology adoption We still see a lot of customers in India who have not fully virtualized, particularly virtualization is relatively low. Today, I was talking to a large public sector company that is barely virtualized. So just taking our customers on that step of the journey in terms of basic cycle of consolidate, virtualize, automate and driving, that is one angle. But at the same time we have customers who are doing full scale, large scale digital transformations like SBI and Bharti Airtel. So these are large customers that are engaged much further along in their journey in terms of transforming them. So we see both kind of what I would say blocking and attacking small scale, getting our customers on this journey, start pushing them on one side to very large transformational opportunities, like what I just described. So we see the entire range of solutions that we talked about being applicable to the Indian market. It is just that different customers are at different stages in their journey
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