VMware, Inc. (NYSE:VMW) William Blair Growth Stock Broker Conference Call June 6, 2019 12:20 PM ET
Paul Ziots - VP, IR
Rajiv Ramaswami - COO, Products & Cloud Services
- Paul Ziots - IR副总裁
- Rajiv Ramaswami - 产品和云服务的首席运营官
Jason Ader - William Blair & Company
- Jason Ader - William Blair＆Company
All right. Good morning, everyone. We're going to get started. Thank you for being here. I'm Jason Ader, I cover enterprise infrastructure for William Blair. I'm sorry? Right on here, mic. Yes. I'll move it a little closer, and you probably want to be close. And I'm very, very pleased to welcome VMware today for our session. Rajiv Ramaswami, who's COO of Products and Cloud Services; and Paul Ziots, who's Head of Investor Relations. Thank you guys for being here.
行。 大家，早安。 我们要开始了。 非常感谢您的到来。 我是杰森阿德，我负责威廉布莱尔的企业基础设施。 对不起？ 就在这里，麦克风。 是。 我会把它移近一点，你可能想要靠近。 我非常非常高兴今天欢迎VMware参加我们的会议。 Rajiv Ramaswami，产品和云服务的首席运营官
Hey, thank you, Jason, for having us.
And I wanted to just make sure everyone knows there's a mistake in the schedule. There will be no breakout after this. So if you have questions, just raise your hand. I have a whole list of questions here. We're just going to do a fireside chat format, but please do ask your questions now because you will not get an opportunity afterwards because there is no breakout. Also, I need to inform you of research disclosures for William Blair on our website and a forward-looking statement here from VMware. Statements made in these discussions, which are not statements of historical fact, are forward-looking statements based on current expectations. Actual results could differ materially from those projected due to a number of factors, including those referenced in VMware's most recent SEC filings on Form 10-Q, 10-K and 8-K.
So with that out of the way, let's get started.
我想确保每个人都知道时间表中存在错误。 在此之后将没有突破。 所以，如果您有任何疑问，请举手。 我这里有一整套问题。 我们只是做一个炉边聊天格式，但请现在问你的问题因为你没有机会，因为没有突破。 另外，我需要告知您William Blair在我们网站上的研究披露以及VMware的前瞻性陈述。 这些讨论中的陈述不是历史事实陈述，而是基于当前预期的前瞻性陈述。 实际结果可能与许多因素产生重大影响，包括VMware最近提交的10-Q，10-K和8-K表格中提到的那些因素。
Rajiv, it seems that hybrid cloud models are becoming increasingly accepted by customers around the world. Can you talk about why you believe VMware is uniquely positioned here to help customers?
Yes. So customers want to be able to run their applications or workloads in multiple clouds as well as in their on-prem environments. So I think everybody has come to a conclusion that they can go fully into the public cloud for everything they need, right? They're going to always be in this mixed world of having local applications on-prem, potentially even in their edge infrastructure as well as in the public cloud. So therein lies the notion of hybrid cloud. Now the other thing about the hybrid cloud is customers also want the flexibility to be freely able to move these applications back and forth from -- they want to have the choice of running applications, either on-prem or in the public cloud.
VMware is in a unique position of enabling them to do this for a couple of reasons. The first reason is we provide a consistent infrastructure with our software stack. The same software stack runs on-prem as well as in the public cloud of their choice, right? What does this mean to the customer? The -- this means that the customer can easily take an application that's running in one place and move it to another place without having to replatform it or refactor it. That saves them a huge amount of money, right, in terms of the refactoring costs. It also saves them time. They can move these applications quickly. They don't have to retrain their people and they can use the same tools, right? That's the first point, right? The consistent infrastructure and consistent operations across all these multiple clouds.
The second truly is the multi-cloud nature of this, right? VMware also is uniquely positioned to be able to provide this environment on multiple clouds. So today, we offer this on AWS, recently announced Azure. We've been working with IBM for many years, and we have 4,000-plus cloud provider partners who also offer VMs stack as a service. So the customers have the most freedom and the most choice here with VMware to create an environment where they can run their applications freely, not be constrained.
是。因此，客户希望能够在多个云以及其本地环境中运行其应用程序或工作负载。所以我想每个人都得出结论，他们可以完全进入公共云，满足他们所需要的一切，对吧？他们将永远处于这样一个混合的世界中，在本地应用程序在本地，甚至可能在他们的边缘基础设施和公共云中。因此，混合云的概念就在于此。现在关于混合云的另一个问题是客户还希望能够灵活地自由地来回移动这些应用程序 - 他们希望能够选择运行应用程序，无论是在本地还是在公共云中。
由于几个原因，VMware处于独特的地位，使他们能够做到这一点。第一个原因是我们为我们的软件堆栈提供了一致的基础架构。相同的软件堆栈既可以在本地运行，也可以在自己选择的公共云中运行，对吗？这对客户意味着什么？ - 这意味着客户可以轻松地将在一个地方运行的应用程序移动到另一个地方，而无需重新格式化或重构它。就重构成本而言，这为他们节省了大量资金。它还节省了时间。他们可以快速移动这些应用程序他们不需要重新培训他们的员工，他们可以使用相同的工具，对吗？这是第一点，对吧？所有这些多个云的一致基础架构和一致的操作。
Great. And can you compare and contrast your AWS relationship with the other cloud partnerships?
Yes. So look, we -- if you look at a...
是。 所以看，我们 - 如果你看一下......
The question is, can you compare and contrast the AWS relationship with the relationships that VMware has with its other cloud partners?
Yes. So we have a preferred relationship with AWS. And let me explain the differences here. With AWS, we offer a service that is VMware managed. So VMware delivers the service to our customers. We manage the service. And it's offered in AWS data centers on top of AWS hardware with the VMware stack. Now we also have, in parallel, a VMware Cloud Provider Program with multiple providers in there, including IBM. And Azure falls into that category of being a VMware Cloud Provider partner. What that means is that we take our software and provide our software stack to Azure or to other partners. Azure, in turn, runs that as a service inside their data center and offers that to their customer. So it's an Azure service offering, not a VMware service offering but using the same VMware stack. So that's the view of a different side. One is a VMware-managed offering. The other is a partner-managed offering.
是。 因此，我们与AWS建立了首选关系。 让我在这里解释一下这些差异。 通过AWS，我们提供VMware管理的服务。 因此，VMware为我们的客户提供服务。 我们管理服务。 它在AWS数据中心的AWS硬件和VMware堆栈之间提供。 现在，我们还同时拥有一个包含IBM的VMware Cloud Provider Program，其中包含多个提供商。 而Azure属于VMware Cloud Provider合作伙伴的类别。 这意味着我们采用我们的软件并向Azure或其他合作伙伴提供我们的软件堆栈。 反过来，Azure将其作为数据中心内的服务运行，并将其提供给客户。 因此，它是Azure服务产品，而不是VMware服务产品，但使用相同的VMware堆栈。 所以这是另一面的看法。 一个是VMware管理的产品。 另一个是合作伙伴管理的产品。
And the VMware-managed offering also is a lot -- is more of a full stack, right, with the other ones? My understanding is that's just -- it's just the VC or the...
VMware管理的产品也很多 - 与其他产品相比，更多的是完整堆栈，对吧？ 我的理解是 - 只是VC或......
No. No. Actually, both offerings are exactly the same. They're both full stack. The core of the offering is what we call VMware Cloud Foundation. That includes compute, which is vSphere; storage, vSAN; networking, NSX; cloud management, right; and a full layer of life cycle management put together, right? That same stack is deployed in Azure. It's also deployed inside AWS.
不。实际上，两种产品完全相同。 他们都是完整的堆栈。 该产品的核心是我们所说的VMware Cloud Foundation。 这包括计算，即vSphere
Okay. Great. And how much of your overall business today is coming from these cloud partnerships?
好的。 大。 您今天的整体业务有多少来自这些云合作伙伴关系？
So to give you a perspective, we have a breakout of what we call hybrid cloud, SaaS and subscription revenue. That's -- in the last quarter, that was about 12% of our total number. Now out of that 12%, about a little over half came from what we call our VMware Cloud Provider Program, right? So that's again the set of cloud providers that take our software stack and offer that as a service. So that gives you a general picture of how big this can be. And in addition, we also have our own managed offering, which is the VMware Cloud on AWS, which is -- which continues to grow. It still early days. We now have it globally available. And that's also included in that bucket.
因此，为了给您一个视角，我们突破了我们所谓的混合云，SaaS和订阅收入。 那是 - 在上一季度，这是我们总数的12％左右。 现在超过12％，大约一半多来自我们称之为VMware云提供商计划，对吧？ 因此，这又是一组云提供商，它们采用我们的软件堆栈并提供即服务。 这样就可以全面了解这可能有多大。 此外，我们还拥有自己的托管产品，即AWS上的VMware Cloud，它将继续增长。 它还处于早期阶段。 我们现在全球可用。 这也包含在那个桶中。
And the revenue recognition for the VMware Cloud on AWS, that is more -- that's more ratable over the life of the contract, right?
而且，AWS上的VMware Cloud的收入确认更多 - 这在合同期限内更加可控，对吧？
Yes. It's SaaS service, right? So it will be ratable over the life of the contract. Exactly.
是。 这是SaaS服务，对吧？ 因此，它将在合同期限内受到质疑。 究竟。
So you'll see it in billings before you see it in revenue, that is an investment.
That is correct. That is correct.
And the VCPP, is that also similar, like a SaaS model where it would be...
Yes. So VCPP is also a ratable model, right? It's a SaaS subscription model, right, where we again recognize that over the term of the contract.
是。 所以VCPP也是一个好的模型，对吧？ 这是一种SaaS订阅模式，我们在合同期限内再次认识到这一点。
But it's not a -- but my understanding is at least, it's not going to -- they're not going to be like three year, five year agreements like you might have for VMware Cloud and AWS like a three year agreement whereas with VCPP is going to be more sort of on-demand. Is that correct?
但它不是 - 但我的理解至少，它不会 - 他们不会像你可能对VMware Cloud和AWS这样的三年五年协议就像三年协议一样，而VCPP 将会更加随需应变。 那是对的吗？
Well, we basically offer this as a subscription calculated to our partners, who then offer it on whatever terms they want to. So for us, it's as they consume, we get revenue.
Okay. Right. Anybody has questions, feel free to raise your hand. In your recent earnings report, you beat the Street but did not raise guidance for the year. Are you starting to see any tightening of demand or late-cycle-type behavior from customers just given how strong the spending environment has been over the last couple of years?
好的。 对。 任何人都有疑问，请随时举手。 在您最近的收入报告中，您击败了街道，但没有提出今年的指导。 考虑到过去几年的支出环境有多强，您是否开始看到客户需求紧缩或后期周期型行为？
Look, we did say in the earnings call that we were not immune from macro environmental issues. Now that said, we are pretty happy with our performance for the quarter, and we reiterated guidance for the full year. I would also say that the -- look, many of our solutions and products provide immediate significant return on investment for our customers, even from our core VCF products, right? Save significant dollars for our customers. If you look at our VMware Cloud Foundation and our hybrid cloud services, for example, again, those offer our customers the ability to have a cloud, whether it's on-prem or inside a public cloud offering, which can save them significant costs, right? So we -- the compelling value proposition of the customer -- that we offer with our solutions we think will help us continue even if macro situations change, right? But we're not going to be immune from those changes.
看，我们在财报电话会议上说，我们不能免受宏观环境问题的影响。 既然如此，我们对本季度的表现非常满意，并重申了全年的指导。 我还要说 - 看，我们的许多解决方案和产品为我们的客户提供即时的重要投资回报，即使是我们的核心VCF产品，对吧？ 为我们的客户节省大量资金。 例如，如果您再看一下我们的VMware Cloud Foundation和我们的混合云服务，它们可以让我们的客户拥有云，无论是在本地还是在公共云产品中，这可以节省大量成本，？ 因此，即使宏观形势发生变化，我们 - 我们认为可以帮助我们继续为客户提供令人信服的价值主张 - 对吗？ 但我们不会免受这些变化的影响。
Right. But do you -- was it more -- your outlook for the rest of the year, was it more just sort of prudence? Or was it something that you've actually seen in the environment in terms of customer behavior shifting?
对。 但你是否 - 更多 - 你对今年余下时间的看法，是否更加谨慎？ 或者，在客户行为转变方面，您是否真的在环境中看到了什么？
Look, we didn't change the outlook for the year, right? We reiterated our guidance for the full year, and we still see good -- we felt good about where our customers are. We feel good about where they are in terms of adopting our solutions and how our stories playing out with them. And so we maintain our guidance. And again, this is, like I said, with -- we are happy with where things are at. This is not a negative message from us.
看，我们没有改变今年的前景，对吗？ 我们重申了对全年的指导，我们仍然看好 - 我们对客户所处的位置感到满意。 我们在采用我们的解决方案以及我们的故事如何与他们展开方面感觉良好。 所以我们保持我们的指导。 再说一遍，就像我说的那样 - 我们对事情的发展方向感到满意。 这不是我们的负面信息。
Yes. Okay. As we think about where you guys are today as a company, I'm thinking back 2.5 years or something, and it wasn't looking so good. You guys slowed down. And I think a lot of people, or you can attest to this, wrote you off. And yet the last couple of years has been tremendous. And even last quarter, you were billing 20% or something like that. So it's been a pretty remarkable turnaround over these last couple of years. How do you explain to people what you guys have done? What changed that allowed you really to turn this ship the way you have?
是。 好的。 当我们考虑你们今天作为一家公司所处的位置时，我会回想起2.5年或者其他什么，而且看起来并不那么好。 你们放慢了速度。 而且我认为很多人，或者你可以证明这一点，写下了你。 然而最近几年却是巨大的。 甚至在上个季度，您的收费率为20％或者类似。 因此，在过去的几年里，这是一次非常显着的转变。 你如何向人们解释你们做了什么？ 改变了什么让你真正按照你的方式改变这艘船？
Yes. I think we -- I would say, it's three things, right? It's about the overall vision. It's about the offerings that we have for our customers and how they are being adopted, and it's the overall culture of the company. So if you look at the vision, we've been articulating it, fairly broad vision that remained consistent for the last several years. It is around being able to deliver any application, modern application and existing application, whatever format it's in, from any cloud, from the cloud of the choice of the customer, right? We are not limiting them to any cloud, any particular single cloud, right? Taking basically any application, delivering them from any of the cloud that they would like to use to their users on any device that the users would like to use, and all with built-in intrinsic security. So that's the vision that we've articulated. It's remained the same for the last several years, and we've been delivering on that vision. It clearly resonates with customers.
Now how does that translate into priorities for customers? I mean our strategies around helping our customers with their key priorities: hybrid cloud, multi-cloud, being able to build and operate modern applications; being able to have networking and security in this world of hybrid cloud and multi-cloud and modern applications; and finally, on the employee side, being able to have great employee engagements and create a great experience for their employees.
So the solutions that we have provided really squarely fit into all these areas. And along the way, by the way, some of these newer technologies that we brought to bear have resulted in significant year of market growth and market penetration. So if I give you a few examples out of this list, right? So we've seen, for example, with the hybrid cloud, great adoption of our VMware Cloud Foundation, right? Because the full stack offering for our customer is hybrid cloud, both on-prem and now inside the public cloud, right?
If you look at application development, the modern app development, we are still in the early stages there. We've got a full Kubernetes-based platform offering in the market. If you look at networking and security, we've had great success with NSX over the last several years with the growth rates that we've seen there. They're starting to embed security now to everything we do, including our base core high-provider platform, vCA, right?
And on the employee engagement side, look, we've created this platform called Workspace ONE, which really creates a single environment that customers can deploy that combines identity, device management, security, a curated application store, all made available, right, on any device that the users want, right? So it's a pretty compelling set of portfolio solutions that our customers are adopting. And last but not the least, I think we do have a culture, right? Our culture, we have a strong culture of innovation. We talk about our epic values here as a company where we focus on execution, right? We've executed well over the last several years on all these fronts that I've talked about. We have passion. Our people want to work at the company. They're passionate about what we do, our culture of integrity with a strong focus on customer, right? And in terms of delivering outcomes for the customers, building a trusted relationship with those customers. And increasingly, we've gotten, over the last few years, even more relevant to our customers than we were two years ago, right, as a result of the strategy. But they, again, trust in us, right? They trust with us -- they trust us. They are with us on this journey as we help them transform. And finally, last but not the least, while we're doing all of this, we also have a strong focus on the community.
是。我想 - 我会说，这是三件事，对吧？这是关于整体愿景。它是关于我们为客户提供的产品以及如何采用它们，这是公司的整体文化。因此，如果你看一下愿景，我们就已经明确表达了这一点，相当广泛的愿景在过去的几年中保持一致。它能够提供任何应用程序，现代应用程序和现有应用程序，无论它采用何种格式，来自任何云，来自客户选择的云，对吧？我们不是将它们限制在任何云，任何特定的单一云，对吧？基本上采用任何应用程序，在用户想要使用的任何设备上将他们想要使用的任何云提供给用户，并且都具有内置的内在安全性。这就是我们所阐述的愿景。在过去的几年里，它保持不变，我们一直在实现这一愿景。它显然引起了客户的共鸣。
在员工参与方面，看看，我们创建了这个名为Workspace ONE的平台，它真正创建了一个客户可以部署的单一环境，它结合了身份，设备管理，安全性，策划的应用程序商店，所有这些都是可用的。用户想要的任何设备，对吧？因此，这是我们的客户正在采用的一套非常引人注目的投资组合解决方案。最后但并非最不重要，我认为我们确实有一种文化，对吗？我们的文化，我们有强大的创新文化。我们在这里谈论我们的史诗价值观作为一家专注于执行的公司，对吗？过去几年我们在所谈到的所有这些方面都表现得很好。我们有激情。我们的员工希望在公司工作。他们热衷于我们的工作，我们的诚信文化以及对客户的强烈关注，对吗？在为客户提供成果方面，与这些客户建立可信赖的关系。越来越多的，在过去的几年里，我们已经获得了比两年前更加相关的客户，正如战略的结果。但他们再次信任我们，对吗？他们信任我们 - 他们信任我们。当我们帮助他们改变时，他们与我们在一起。最后，最后但并非最不重要的是，在我们完成所有这些工作的同时，我们也非常关注社区。
Seems great. So basically, the reality of the hybrid cloud, multi-cloud coming to bear, the portfolio expansion that you guys have had, that fits really well into that as market shift and then just execution. Those were the things?
看起来很棒。 所以基本上，混合云的现实，多云即将到来，你们所拥有的投资组合扩张，非常适合市场转移，然后只是执行。 这些是什么？
Yes. Yes. Exactly.
是。 是。 究竟。
Good. When I think about the longer-term risks for VMware, I think of 2 things really. Just public cloud migration in a sense that this is no on-prem data center and the customer just shuts it down and just go straight to the cloud. And then the emergence of containers, that's sort of potentially a threat longer term to virtual machines, which is your baby, right? So how do you see the company addressing these trends, these challenges over time?
好。 当我考虑VMware的长期风险时，我真的想到了两件事。 只是公共云迁移在某种意义上说，这不是本地数据中心，客户只是将其关闭并直接进入云端。 然后是容器的出现，这对于虚拟机来说可能是一个长期的威胁，这是你的宝贝，对吧？ 那么，您如何看待公司解决这些趋势，这些挑战随着时间的推移？
In fact, when I came to the company 3, 4 years ago, at this point, those were both actually existential kind of fact, right? What are we going to do with the public cloud? What are we going to do with containers? And the reality is, they're no longer threats. They're opportunities for us. We've converted both of those into significant opportunities for the company on the cloud first. So it's no longer just going to be all a public cloud world. It's a hybrid cloud world and actually what customers have spoken, right? They want to be in this mix. They want to be across multiple clouds. They want to have the flexibility to run workloads on-prem. And that has translated for us into a huge opportunity with all our cloud offerings with the ability for us uniquely as a company to provide this consistent infrastructure, right, where we have the same stack now being able to provide that in all the cloud providers.
事实上，当我4年前来到公司时，在这一点上，那些都是存在主义的事实，对吧？ 我们将如何处理公共云？ 我们将如何处理容器？ 现实是，他们不再是威胁。 他们是我们的机会。 我们首先将这两者转化为公司在云上的重要机会。 所以它不再仅仅是一个公共云世界。 这是一个混合云世界，实际上是客户所说的，对吗？ 他们想要融入这种混合体。 他们希望跨越多个云。 他们希望能够灵活地在本地运行工作负载。 这为我们提供了一个巨大的机会，我们所有的云产品都能够为我们提供独特的公司能力，提供这种一致的基础架构，我们拥有相同的堆栈，现在能够在所有云提供商中提供。
Sounds like a common denominator, right?
A common denominator. A consistent environment that our customers can trust. And we're uniquely positioned to do that related to the other providers, right? Because the providers are more focused on their particular cloud, right? We operate across clouds. And I think that's something that the customers like, and we provide the flexibility.
So the public cloud is turning into an opportunity for us not just with the hybrid cloud, but also even when customers just want to go natively to the public cloud, we can provide them a good, consistent management and operations and security environment across those multiple clouds. And that, again, is a key value proposition that our customers are starting to embrace.
And just a few examples, right, with cloud help, for example, today. We provide the ability for our customers to manage their spend and optimize their resources across native public clouds, right? There's no other VMware product in the offering, but this alone helps them save significant dollars when they use the public clouds. So we feel good about -- now the cloud is held being a significant opportunity for us with a broad portfolio of solutions with our hybrid cloud story, with our multi-cloud management operations and security set of services that we provide.
Now when it comes to containers, if you look at the old days of containers, there was a concern that containers would, for example, take away from virtual machines, right? You will deploy containers on bare metals. There will no longer be any virtual machines. The reality today is almost all container deployments are on top of virtual machines. And that's not true just in on-prem. That's also true in all the major public clouds, whether you're getting a container service in AWS or Azure or at Google, you're still getting them inside of VMs. And that's because people know how to operate a VM environment. It's secure. It's isolated. And they don't really want to manage distinct environment for every different thing. You're going to run your VMs. You're going to run your containers, and you want to do all of that with a seamless single infrastructure. So containers, therefore, are now inside of VMs, and we've embraced containers as an opportunity now for us to gain additional business and additional value with our customers.
So today, we provide a full set of Kubernetes offerings in the marketplace. It's called the VMware Pivotal Kubernetes service. It's available in different forms as a basic, even open-source distribution, which, again -- by the way, from a VMware perspective, we've embraced open source, right? We're adding on top of that with key things like networking and security and life cycle management that we put together in an enterprise-grade offering. We take that into the cloud as well. And we continue to expand that portfolio. We bought a company called Heptio last year, which was founded by two or the two founders of -- three founders of Kubernetes. And today, we are the second largest contributor to Kubernetes from an open-source community perspective. So we've really transformed ourselves when it comes to containers. And we are now in a great position to be partners with our customers to enable them to build these modern applications using containers and micro services.
还有一些例子，例如，今天有云帮助。我们为客户提供管理其支出并在原生公共云中优化资源的能力，对吧？该产品中没有其他VMware产品，但仅此一项就可以帮助他们在使用公共云时节省大量资金。所以我们感觉很好 - 现在，通过我们的混合云故事，我们提供的多云管理运营和一系列安全服务，云为我们提供了广泛的解决方案组合。
所以今天，我们在市场上提供全套Kubernetes产品。它被称为VMware Pivotal Kubernetes服务。它以不同的形式提供，作为基本的，甚至是开源的发行版，从VMware的角度来看，我们已经接受了开源，对吧？我们在网络，安全和生命周期管理等关键事项上添加了企业级产品。我们也将其纳入云中。我们继续扩大该组合。我们去年收购了一家名为Heptio的公司，该公司由两位或两位创始人--Kubernetes的三位创始人创立。今天，从开源社区的角度来看，我们是Kubernetes的第二大贡献者。所以我们在容器方面真的改变了自己。我们现在处于与客户合作的良好位置，使他们能够使用容器和微服务构建这些现代应用程序。
Okay. Great. I want to shift gears a little bit to VMware Cloud and AWS. It seems like this is just starting to really happen for you guys. And I know it's been talked about for a couple of years, but it feels like it's starting to move the needle. When do you think it actually becomes material to your financials? And then what are the main use cases you're seeing for VMware Cloud and AWS?
好的。 大。 我想稍微改变一下VMware Cloud和AWS。 对你们来说，这似乎刚刚开始真正发生。 而且我知道它已被讨论了几年，但感觉它已经开始动了针。 您认为什么时候它对您的财务实际上变得重要？ 那么您在VMware Cloud和AWS中看到的主要用例是什么？
Look, this year, we expect to do over $10 billion in revenue. So for something to be material, it's got to be fairly large out there. And I think it will take a couple of years for VMware Cloud and AWS to become material. Now in terms of the use cases, what are we seeing here? So the biggest use case really is data center consolidation and migration. So customers are typically running VMware inside their on-prem data centers. They have multiple data centers. And for a variety of reasons, they want to consolidate and potentially move some of that into the cloud. And we enable that to happen better than almost anything else out there. Because in those types kind of scenarios, if you want to take an app and move it into the cloud natively, you're going to have to spend a significant amount of money refactoring the application or replatforming the application. It's going to take you time, and you're going to have to learn a whole set of tools and processes.
看，今年，我们预计收入将超过100亿美元。 因此，对于某些重要的东西，它必须相当大。 我认为VMware Cloud和AWS需要几年的时间才能成为实质性的。 现在就用例而言，我们在这里看到了什么？ 因此，最大的用例实际上是数据中心整合和迁移。 因此，客户通常在其本地数据中心内部运行VMware。 他们有多个数据中心。 由于各种原因，他们希望巩固并可能将其中的一部分迁移到云端。 我们使这种情况比其他任何事情更好。 因为在这些类型的场景中，如果您想要一个应用程序并将其本地移动到云中，您将不得不花费大量资金重构应用程序或重新构建应用程序。 这将花费你的时间，你将不得不学习一整套工具和流程。
Can you explain to the audience why that's required to replatform, refactor?
Yes. Because the underlying infrastructure -- these applications are all designed to run on a particular infrastructure, right? The infrastructure on a VMware environment is different from what's available in the public cloud. The storage is different. File systems are different. So you'd typically end up having to adopt that application that we have to go run over there.
Now if there's an application that already exists, then you were thinking, all of this effort is really for nothing, right? I mean you're spending a lot of money on an app that already works, right? Would you rather spend that money on building a net new app or something brand new that you're trying to do versus spending it on an app just to migrate it to the cloud? So that's the challenge, right, which is why from a cloud migration perspective, the compatibility and the consistent infrastructure that we provide means that we have been just lifted and shifted. Pretty easy compared to going directly to the native cloud, right? So that's a very important first use case, right? Cloud migration.
The second use case is elastic capacity expansion. So here's the situation where your demand is ebbing and flowing. You have more demand at a certain point than you have less demand and you have the ability to use the cloud as a way for you to add capacity quickly. Again, in the hybrid cloud environment, you might be running some of your workload content, and now you need more capacity for a short period of time, you go into the public cloud.
The third use case is around disaster recovery. So again, you could create multiple data centers and have a disaster recovery plan across two data centers or you could take one of those and put them in the cloud. And the cloud offers some significant economic benefits when it comes to disaster recovery. You can, for example, replicate your data into the cloud, but you don't have to be consuming compute capacity or have that sitting idle, right? So you could actually get that compute capacity on demand if you have a disaster.
So let me give you a couple of examples on how this is playing out from a customer use case's side. So I was just in India a couple of weeks ago, and there was this company that's a BPO company, a company operating out of India, but they operate like 22 data centers around the world. And they don't really want to be in the business of operating these 22 data centers around the world. It's kind of a pain for them. So they're looking to get out of operating their data centers and having somebody else run them and get that as a service.
The second thing is they're in the business of acquiring customers, right, and -- who are coming to them for call center operations or whatever, right? And one of the competitive advantages is being able to onboard a new customer very, very quickly, which means that they have to have the infrastructure available to be able to onboard customers quickly. And if the capacity is elastically addable, right, as we have in the cloud, they can onboard new customers very, very quickly compared to having to roll out new and such every time. At the same time, when a customer leaves, it's fine. They can scale down their capacity, right? So that's the second thing, a use case.
是。因为底层基础架构 - 这些应用程序都设计为在特定基础架构上运行，对吧？ VMware环境中的基础结构与公共云中的基础结构不同。存储是不同的。文件系统是不同的。因此，您通常最终必须采用我们必须在那里运行的应用程序。
第二件事是他们从事收购客户的工作，对，以及 - 谁来接待他们进行呼叫中心运营或其他什么，对吧？其中一个竞争优势是能够非常快速地加入新客户，这意味着他们必须拥有可用于快速加入客户的基础架构。如果容量是可弹性添加的，正如我们在云中一样，他们可以非常非常快速地加入新客户，而不必每次都推出新的客户。与此同时，当顾客离开时，没关系。他们可以减少他们的容量，对吧？这是第二件事，一个用例。
And then by the way, for disaster recovery here, if they are in the cloud, they can easily go to another availability zone, say, in AWS and have a DR plan, right, again, without having to open up a third data center for them to go do that. So it's just -- all of this is coming to play out as this one customer, right? And this is just what we see over and over again with other customers as well.
顺便说一下，对于这里的灾难恢复，如果他们在云端，他们可以轻松地进入另一个可用区域，比如在AWS中，并且再次有DR计划，而无需打开第三个数据中心 他们去做那件事。 所以这只是 - 所有这一切都将成为这个客户，对吧？ 这正是我们与其他客户一遍又一遍地看到的。
Great. And then one of the things -- one of the questions I get from investors right now -- I guess the question is that is this sort of just a stack up for AWS and ultimately, they're going to steal your customers that go to VMware Cloud and AWS? What -- how do you alleviate that concern?
非常好。 然后是其中一件事 - 我现在从投资者那里得到的一个问题 - 我想问题是，这只是AWS的堆叠，最终，他们会偷走你的客户去 VMware Cloud和AWS？ 什么 - 你如何减轻这种担忧？
Yes. I mean I think the fundamental value that customers have seen in coming with us on this daily is really this notion of a consistent infrastructure, right, that they get across multiple environments. So they get the complete freedom to operate across whatever environment they want, right, on-prem, AWS. They might want to run some workloads initially on AWS to do testing and so forth and move them back and run them in their on-prem data center, right? Or they want to move more over to AWS or they may want to run some in Azure. We provide them that flexibility in a unique way, right? If they go to AWS natively, they don't quite get that. From an AWS perspective, right, they are very motivated to partner with us because that's really how they get these workloads into their infrastructure.
是。 我的意思是，我认为客户在每天与我们一起看到的基本价值实际上就是这种一致的基础架构的概念，正确的是它们可以跨越多个环境。 因此，他们可以完全自由地在他们想要的任何环境中运营，对吧，在本地，AWS。 他们可能希望最初在AWS上运行一些工作负载来进行测试等等，然后将它们移回并在其本地数据中心运行，对吧？ 或者他们希望更多地转移到AWS，或者他们可能想要在Azure中运行一些。 我们以独特的方式为他们提供灵活性，对吧？ 如果他们本地访问AWS，他们就不会那么做。 从AWS的角度来看，他们非常积极地与我们合作，因为他们真正将这些工作负载带入他们的基础架构。
On ramp -- on that.
在坡道上 - 在那上面。
But once they are there, right, AWS also sees the opportunity to share additional services on top of these workloads and all the other services that they share. And by the way, more recently, I mean just in a gestural form, how important it is for them, but they are actually starting to resell -- they just started reselling our VMware on AWS service, right? AWS is actually starting to show that. So I think there's a clear win-win here between both companies to make this a sustainable thing as opposed to just something, "We are okay. You bring the workloads in. You can work them over, right?" That doesn't necessarily drive the value proposition that the customers are looking for.
但是，一旦他们在那里，对，AWS也看到了在这些工作负载和他们共享的所有其他服务之上共享其他服务的机会。 顺便说一句，最近，我的意思是只是一个手势形式，它对他们有多重要，但他们实际上开始转售 - 他们刚刚开始在AWS服务上转售我的VMware，对吗？ AWS实际上已开始显示。 因此，我认为两家公司之间存在明显的双赢，使其成为一种可持续发展的东西，而不仅仅是“我们没事。你带来了工作量。你可以解决它们，对吗？” 这并不一定会推动客户所寻求的价值主张。
A question in the back. Okay. So the question was, can you talk about the network virtualization opportunities? And how early are you in the marketplace with this?
后面的一个问题。 好的。 所以问题是，你能谈谈网络虚拟化的机会吗？ 你有多早在市场上这么做？
So NSX, which is our network virtualization platform [indiscernible], some on the success in the marketplace, it's now on a $2 billion run rate exiting last quarter. If you look at the broad opportunity in terms of what we are looking at here, we see a fundamental opportunity to be the networking leader for the next 20 years, what perhaps CISCO was for the last 20 years. And here's the rationale. If you look at the last 20 years, networking was all about connecting with boxes together, right? You had a data center network to connect servers to servers and storage. You had a campus network to connect your desktop to the laptop. You had a branch network to connect to your branch offices together with routers, right? So that was a problem that traditional vendors were solving.
Now if you look at the world that we live in today, we talked about hybrid cloud, we talked about multi-cloud, we've talked about applications going to the edge, people want to run applications everywhere. Their users are coming from everywhere, and their data are stored everywhere. So what do you need from a network? You need a network that connects and secures application, users and data regardless of where they are present. Now that's a fundamentally different paradigm than this old view of, "Hey, I've got to build switches and routers and boxes." And this is a view that can be done -- entirely has to be done in software, right, because only a software-defined network can really stretch across all the places where applications run, right, all the places that users are coming in from regardless of what's running underneath, right? It doesn't matter what you're sitting underneath with. So that is the fundamental big value proposition that we're going after with our networking portfolio.
Now imagine, right? So there's a rich set of network services that we can provide here, right, established networking, of course; base connectivity; then you do add-on security; you add on a load balancing. So you just keep adding and increasing list of services on top of this platform and then increasing set of use cases. So that's what we've done with NSX.
So I would say we have -- we're past the first couple of stages, but the opportunity ahead of us is huge. So if you look at the use cases today for the portfolio, we're looking at automating, right, the building of cloud and connecting all these end points, whether they be a bare metal end point, whether they be a virtual less end point, whether it be a container end point, right, because these apps can run anywhere. They can run on bare metals. They can run on containers. They can run on VMs. All of them need to be connected, securing them at a very, very fine-grained level, right? So the automation that we provide, the security that we provide, the application continuity and disaster recoveries that we can bring to the table, those are all use cases. And the scope of those use cases continue to increase over time, right, as we get into the public cloud, as we get into the edge, as we get into containers. So that, in a nutshell, is the huge opportunity for networking. We are reasonably well along, but we've got a long way to go still ahead of us.
现在，如果你看看我们今天生活的世界，我们谈到了混合云，我们谈到了多云，我们谈到了应用程序走向边缘，人们希望到处运行应用程序。他们的用户来自世界各地，他们的数据存储在各处。那么您需要从网络中获得什么？您需要一个连接和保护应用程序，用户和数据的网络，无论它们在何处。现在这是一个根本不同的范例，而不是旧观点，“嘿，我必须建立交换机，路由器和盒子。”这是一个可以完成的观点 - 完全必须在软件中完成，因为只有软件定义的网络才能真正延伸到应用程序运行的所有位置，对，用户来自的所有地方无论在底下跑什么，对吧？你坐在哪里并不重要。因此，这是我们追求的网络产品组合的基本重要价值主张。
So I think if I were to paraphrase their question, does NSX only kind of work with a VMware environment? Or does it really extend beyond that, right? So the answer absolutely is NSX is kind of everywhere portfolio, right? We started out, by the way, with that running only inside of a VC environment, working with VMs. But if you look at where it is today, it runs in the public cloud natively. There's no other VC or no other VMware products in that environment, but it runs natively on AWS, runs natively in Azure. It extends up into container end points, right? It even extends into bare metal. So it's truly a cross-platform, right? It works across multiple hypervisors, right, multiple clouds. It's not tied to any particular VMware stack.
所以我想如果我要解释他们的问题，那么NSX是否只适用于VMware环境？ 还是真的超越了这个，对吧？ 所以答案绝对是NSX是一种无处不在的产品组合，对吧？ 顺便说一下，我们开始只在VC环境中运行，与VM一起工作。 但是，如果你看看今天它在哪里，它本身就在公共云中运行。 在该环境中没有其他VC或其他VMware产品，但它在AWS上本机运行，在Azure中本机运行。 它扩展到容器端点，对吧？ 它甚至延伸到裸金属。 所以它真的是一个跨平台，对吗？ 它适用于多个虚拟机管理程序，右侧，多个云。 它与任何特定的VMware堆栈无关。
Great. We have to wrap up. I want to just -- I want to ask one final question to you as you -- what are the main takeaways you want to leave people with from this session?
非常好。 我们必须结束。 我想 - 我想问你最后一个问题 - 你想让这些人离开会议的主要内容是什么？
Look, I think we've got the vision that we've articulated. It's resonating well with the customers around delivering any application from any cloud to any device or to any user. And within that, we map very well with our solutions to the IT priorities of our customers. They are committed to the hybrid cloud. They want to be able to operate in multiple clouds. They need to be able to manage all of this from a networking and security perspective, and they want to create an environment where their employees are engaged and productive. So we have solutions that clearly map to those IT priorities and are increasingly trust our partners with our customers.
Now that said, we're also very focused on execution. We had a good last year. We had a good start to the fiscal year here with our first quarter, and we continue to very much focus on execution on the strategy, right? That's really what we do as a company.
看，我认为我们已经明确了我们的愿景。 对于从任何云向任何设备或任何用户提供任何应用程序的客户而言，它都能很好地产生共鸣。 在此范围内，我们可以很好地解决客户的IT优先级问题。 他们致力于混合云。 他们希望能够在多个云中运行。 他们需要能够从网络和安全角度管理所有这些，并且他们希望创建一个员工参与和富有成效的环境。 因此，我们的解决方案能够清晰地映射到这些IT优先事项，并且越来越信任我们与客户的合作伙
既然如此，我们也非常专注于执行。 我们去年表现不错。 我们在第一季度的财政年度开局良好，我们仍然非常关注战略的执行，对吧？ 这就是我们作为一家公司所做的事情。
Next one? All right. Well, thank you for being here and thank you, everyone, for coming.
下一个？ 行。 好的，谢谢你来到这里，感谢大家的到来。
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