Navigating the New Infrastructure Reality: Strategies for IT Leaders in a Time of Transition - Six Five Media

What's the roadmap for enterprise infrastructure in a post-acquisition world? 🌍

Patrick Moorhead hosts a critical conversation on the evolving enterprise infrastructure landscape. He's joined by Pure Storage's Nirav Sheth, Vice President, Worldwide Sales & Customer Success Engineering, and Presidio's Raphael Meyerowitz, Vice President, Partner Go-to-Market. This dynamic discussion tackles the profound impact of acquisitions, exploring everything from virtualization and cloud strategies to optimal workload placement.

Key takeaways include:

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🔹VMware Acquisition Impact: They dissect how the VMware acquisition is fundamentally reshaping IT strategies for organizations everywhere.

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🔹Evolving Infrastructure: Get a clear picture of the current state and rapid evolution of the enterprise infrastructure landscape.

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🔹Virtualization & Cloud Strategies: Learn key strategies for navigating virtualization and cloud adoption in today's complex IT environment.

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🔹Workload Placement Post-Acquisition: Discover critical considerations for effective workload placement in the wake of significant industry changes.

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🔹Future Outlook for IT Leaders: They share essential insights and a forward-looking perspective for IT leaders grappling with these transformative shifts.

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Learn more at Pure Storage and Presidio.

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Or listen to the audio here:

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Disclaimer: Six Five Media is for information and entertainment purposes only. Over the course of this webcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors, and we ask that you do not treat us as such.

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Patrick Moorhead: The Six Five is back and we are talking about something that I know is on everybody's mind, and that's the shifting landscape out there in the IT community. I mean, change is inevitable. And in some of the most basic things like virtualized workloads and containers, there's a lot of activities going on there. We had Broadcom that acquired VMware, and I know I'm talking to a lot of enterprises about this. And I get to go to these tech shows, it's like a clown show, right? The analysts show up and we just go from show to show, but there's a lot of discussion about change here. And what I wanted to talk about is bring in two guests who are front and center working with customers. We have Nirav from Pure Storage and Raphael from Presidio. Welcome to the show.

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Raphael Meyerowitz: Thank you.

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Nirav Sheth: Yeah, thanks for having us, Patrick. And Raphael, super excited as always to have a chance to work with you.

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Patrick Moorhead:Yeah, this is-

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Raphael Meyerowitz: Good to see everyone again.

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Patrick Moorhead: I know. I always say the best conversations involve, of course an analyst, but then technology firms, but also partners and people who are the closest with the enterprises, and I feel like we have that trifecta going here. So, let's dive right in and Raphael, I'm going to hit you up with this first. What are people saying about the shifts out there in infrastructure? And a lot of activity with VMware. I mean, I've seen a lot of articles written and a lot of people saying, oh my gosh, this is terrible. I'm pulling the escape hatches. And then last week, Broadcom issued a 25% increase in VMware revenue. What's going on here?

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Raphael Meyerowitz: Yeah, so, great to see everyone again. Thanks. We've been a VMware partner at Presidio for over 20 years. Not only have we been a VMware partner, we're also a Pinnacle partner, which is the top nine partners in the US are Pinnacle Partners. The reason I bring that up and why it's important is because we have more and more customers that have turned to us, net new customers, and we have many, many existing customers. We have over 6,000 existing customers as well. But what's going on is, I would say the first, let's call it 20 months since the acquisition closed, things have changed dramatically. There was kind of this fear and doubt in the beginning, but as customers got used to the skews that Broadcom had rolled up, that made it a lot easier for customers to consume. It's all subscription now. Customers are really turning to us and saying, how can you help us not just with VCF projects, but also how can you help us in general with our VMware environment? Let's not forget, VMware has been a stable for many, many years in customers environments. Even back to the Diane Greene days, many moons ago customers were really starting to adopt VMware and we have a ton of VMware customers, a ton of Pure Storage customers that are also using VMware. Nirav, any thoughts from you?

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Nirav Sheth: So a couple of things. So first off, if I'm thinking about the customer and partner engagements we're having, obviously Presidio being at the top of the list, I think there's two real significant dynamics that are really causing a complete revamp and rethink of customer infrastructures. One side is obviously what's happening in terms of virtualization and VMware and how does that influence application architecture going forward? And I think candidly, the other side of it's all things AI. We can't have a conversation without seeing AI. But the demands on the infrastructure resulting from really understanding what that data strategy looks like are absolutely unprecedented. And I think any one of those on their own would create a complete rethink for a customer strategy. And I think the combination of those two things together, is a perfect storm. Now, similar to Presidio, for our 13,500 customers around the world, give or take most of them in some way, shape or form that are running virtualized environments are running with VMware, let's give credit where credit's due. Similar to what Raph mentioned, VMware has built an incredibly amazing business, has been a pioneer and it's consistently innovated. But I do think given the transition, the acquisition that has taken place, there are a number of customers that have been surprised. They've been surprised by the licensing, they were surprised by the renewal costs. It's come in a way that it's not necessarily expected. And so if you're a customer and you're planning your budgetary cycles and you've kind of factored in a certain level for licensing renewals, and all of a sudden now that's going to be 2X, 3X, 5X more, it's going to further create pressures on other things that you want to do.

And so our strategy and our approach has been a couple of things, right? We've got these incredible capabilities and integrations with VMware, and so part of what we want to be able to do is just help our customers, absolutely to Raph's point, just optimize the environment that they have with VMware. But the other side of it also provides that flexible platform no matter where they want to go. But I think these two things combined are creating a lot of pressure and we're seeing some customers that are looking to stay the course in terms of VMware, and we are absolutely seeing customers that are trying to rethink, hey, what this might go forward look like.

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Patrick Moorhead: Yeah, talking about pressures, I mean, you talked about licensing changes and some of the costs. Raphael, I'll hit you up with this first. Talk about the financial pressures related to even in how they're adapting their strategies to meet not only the business need and keep the lights on, but also expand into AI and meet their budget demands.

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Raphael Meyerowitz: Yeah. Look at VMware for many, many years, customers were used to perpetual licenses and buying something called SNS. SNS is basically supported today, everything with VMware subscription-based. And that takes a while for customers to get used to that and used to that motion specifically because when you think about our industry that we are in, what's happened over the past few years, probably even the past 10 years, a lot of customers are starting to adopt and even adapt to subscription-based technologies. A great example is Pure as-a-Service. It's a subscription-based offering. And when you look at VMware, VMware has a subscription-based offering as well. Today. Customers were very used to buying perpetual licenses and continue to use them till the end of time. And now Broadcom's come in and said, no, we are simplifying  this. And one of the things that has happened is, yes, there are some customers to Nirav's point where they have seen an increased cost, but it's not sometimes a fair comparison because if you're looking at it on a per-CPU basis, a per-core basis per-VRAM basis, it's not exactly the same because you're getting a lot more features and functionalities within that VCF stack or within the VFF stack. But also you are not buying support separately, that's subscription based and support is included. So whenever I see a lot of the negativity that's in the media around VMware, some of it is accurate, some of it is not accurate. In fact, most of it, like we've learned in the media, not analysts, but in the media, a lot of information that's out there is inaccurate and customers are turning to us because they're reading everything that's out there in the media. And then we have to come in there and decipher what's going on and tell them the truth about what's happening.

One thing I know about Broadcom is that they're constantly changing. Every single week there are changes in terms of what is going on. So the media is not necessarily the right place to go to look at what's happening from a financial standpoint with your licenses.

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Patrick Moorhead: So Nirav, let's say there are customers who are just unhappy with this. I mean, what are the alternatives? I mean, obviously there's different virtualization techniques. You want to go full containers or something different.

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Nirav Sheth: So a couple of things, and I love Raph's kind of representation of fake news. That's awesome, Raph, it's great to hear that. But backing that point up, there is absolutely a lot of confusion right now in the market, and I would look at it in a couple of different ways. Even if there were no changes to what Broadcom might be looking at, customers are always looking for efficiency and ways to optimize their costs. I mean, in good times and bad times with surprises or no surprises, no customer is ever going to take a look at it and say, oh, I don't want to save costs. If there's ways that they can optimize their environment, they're going to seek to optimize that environment.

Now that's exacerbated because there have been changes and there's no doubt that certain customers are definitely very disappointed by some of the changes, whether or not there's a really good value prop, the change is inevitable and change is tough. And so what are the things that we're engaging in and what we're seeing with our customers? And first and foremost, we know that VMware has a very rich and deep ecosystem, and we've built amazing integrations around that ecosystem. And what we want to be able to do is deliver to our customers who are choosing to stay with VMware, a very optimized environment, and also an environment that's very, very easy to manage. And so if we think of vVols capabilities and VCFA, if I think of our new VMware assessment capability in our Pure1 management platform, which enables customers to really optimize their licensing costs by reducing the number of core accounts they might need to license. If I think of other management capabilities that we've got within our infrastructure, such as Pure Fusion, which enables customers to take a look at their infrastructure as a pool of assets rather than array by array, we're striving to enable our customers to deliver and to enjoy most specifically a very cost optimized experience for those that are choosing to stay with VMware.

And we've had a number of customers as they relicense, maybe they take out vSAN in some way, shape or form, certainly transitioning out of VxRail and coming over to us. And back to Raph's original point of, hey, we're actually seeing some growth in terms of customers sticking with VMware. The other side of it, again, in any kind of major transition, and again, I'll go back and I'll talk about AI as well. We've got a lot of workloads that are emerging. And so as customers navigate, hey, what does my environment look like in terms of virtualization? At the same time, you have all of these cloud native kinds of workloads that are emerging that are basically containerized. And so the other angle that we're looking at and what we've done through the power of our platform is to deliver customers a very flexible capability that's going to be able to accommodate all workload types. And so those customers choosing to stay with VMware, we're going to give them a super efficient, super optimized experience, best in class, most performance, and easiest to manage. Some customers might want to take their VMware workloads and transition to a cloud environment, let's say Azure Virtual Services and take advantage of the CSP's VMware licensing. Well, we've extended our OS capabilities, our best-in-class optimization capabilities that run our platforms and extended that into Azure and extended that into AWS. So many customers can actually continue to work with us, take their VMware workloads to the cloud, and actually have a tremendous amount of cost savings in that Azure block or AWS block environment. We're also seeing customers evaluate alternative paths. Are there other hypervisor strategies like a Hyper-V or Nutanix? In fact, Pure just announced a first-of-a-kind partnership with Nutanix where for the first time ever, Nutanix is actually going to be supporting a three-tier architecture for scale and performance. And we're seeing a tremendous amount of customer enthusiasm about that. In fact, Nutanix and myself, we just signed off on yet another customer going into the early access program for that. And then finally, as I talked about some of these newer workloads, if I think of AI or others, all of these workloads are being containerized. And with our Portworx capabilities, we're giving the ability for our customers to have a really resilient and very optimized stack, even if they're completely modernized in that stack. For me, I typically look at things as an and not an or. There might be certain workloads that a customer sticks with VMware, they might take a look at other workloads with a potential alternative hypervisor, and/or we kind of know that a lot of their new workloads are going to be architected in a containerized fashion and they're just going modern right out of the gate for those newer workloads. And so for us, it's about serving all of the above and not any one in particular of the above.

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Patrick Moorhead: Right. Raphael, any quick comments on challenges associated with moves or changes like this?

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Raphael Meyerowitz: Yeah, look, the first thing I want to say to people is don't panic, but also don't wait either. I mean, I think that's important, right? Because a lot of people wait until the last minute and then they can't figure out what to do. The one thing that I've seen, and Nirav kind of covered this as well, is operationally, VMware has been tied into a lot of customers' environments for over 15 years. It's not easy just to move off VMware, and it's certainly not that easy just to figure out, hey, I have a new hypervisor, I'm going to... Even if you look at how many applications have moved to the cloud, not net new applications that are built in the cloud, new applications that have moved to the cloud, it's not that easy. Imagine now I have to transform more so my hypervisor, I have to figure out the dependencies around that hypervisor. There's a lot of things that you have to figure out.

So it's not necessarily just about, hey, changing the hypervisor, right? We have a customer that actually went through this and just a great example where actually their load balance doesn't work properly. And they said, all right, we're not doing this. These applications are too important. We're going to stick with VMware. So you have to look at everything within that ecosystem.

And the one thing that I would also say around this is you need to choose a platform like Pure Storage that you can leverage whether you use VMware or that you want to use an alternative. And Nirav covered a lot of those points that whether it's brownfield or greenfield, you can still leverage the same storage platform. And storage is at the end of the day, the underlying pins of AI. So it's really important.

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Nirav Sheth: And Raph, if I can piggyback off that, and I think you were kind of alluding to this in your conversation just now, these are not simple decisions, these aren't plug and play decisions, no matter how large or small a customer organization might be. And when a customer is thinking about this journey, and I have to believe that pretty much any customer, and certainly any customer we're working with is thinking about, okay, what is the two, three year roadmap of our application architecture? And that's no different for us. We as Pure are thinking about what's our three year journey in terms of in-house application architecture? Every organization is thinking about this.

And I think expertise is so critical to bring to the fold. And one of the reasons I was very excited about doing this session with Raph is that Presidio has an amazing virtualization workshop that they're running that can bring forward all of that expertise to customers as they think about the road ahead in a very, by the way, neutral stance because while Presidio might have that highest status with VMware, they've also got a multitude of partnerships.

Same consideration for Pure, right? Please, please, please think about engaging our experts. We'd love to have a very kind of advisory style of engagement and work with your organization to just help you understand the road ahead, similar to Presidio and Presidio and Pure together, our only objective is to make sure that customers have successful outcomes. We're very proud of our market leading NPS score, and because we're anchored on outcomes. It's not about, hey, go in this direction or go in that direction. Our platform is flexible enough to serve all directions. Our platform can be consumed in different ways, you can co-term us with your VMware subscription if you need to.

And so for us, it's about flexibility and choice. And so when you're to engage with Presidio and you're choosing to gauge with Pure, it's genuinely an advisory engagement and let's get you to that right outcome, and let's build that through your strategy together with you.

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Patrick Moorhead: Yeah, those are great words of wisdom. Our listeners or our viewers might be wondering, hey, what is the correlation between storage and VMware? I mean, listen, we're all technophiles. We've been in the industry a long time, but why is storage even in the VMware conversation? And Raphael, I'd like for you to answer this one first.

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Raphael Meyerowitz: Well, going back even before Pure existed, I think storage remained foundational for VMware environments. If you think about many, many years ago when VMware came out with vMotion, it was shared storage that actually enabled that. This was over 20 years ago when that came out. What's happened since then is customers are looking at VMware and saying, well, I need my VMware environment to be fault-tolerant, ensure high availability, in case the server dies I need to make sure that my VM still stays up and that I can recover very, very quickly. That's the underlying idea behind why customers actually chose shared storage in the first place. Now, the industry has changed. If you think about it, there's many, many protocols that have existed. Now, the fiber channel has been out for a long time, NVMe, and a lot of different protocols that customers can leverage. But at the root of it, if customers cannot access their applications as quickly as they need to or they don't have the amount of storage that's needed, what's going to happen is the customer's not going to be in business. And I think there's other pieces as well. If you look at Pure Storage, what's happened is, there's many ransomware attacks that have happened. Well, Pure Storage has defense mechanisms built in to detect these ransomware attacks before they happen.

So the underlying pinnings of storage have evolved over time, and it's become a defense mechanism more so for companies. And then also when you factor in AI and the unstructured and structured data that customers have on the storage side, there's no AI without storage today at the end of the day. And then-

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Patrick Moorhead: Yeah, I very rarely ask a question that I know the answer to, but I just want to make sure all the viewers out there understand this. I mean, we would virtualize an application that sat on top of a VM and then we virtualized storage, and it became important. Then what became important was, and still is resiliency. Which is particularly now that we're under attack more every year and potentially with ransomware, and I'm really glad to see Pure step up and offer these foundational services on top of the storage. I mean, I know it's a thin delineation between storage and data now, particularly with all the data service that the storage vendors are offering. But yeah, I just wanted to make sure the audience knew this, and I appreciate you answering that question.

So both of you I think gave a really good view as well on words of wisdom of how to make that happen and the partnership that the two of you bring. And with that, I just want to thank you for joining us. The thing I really liked about this conversation is it's all about how the enterprise wants optionality, and you guys talked about doubling down on VMware and how you could do that. Raphael, you addressed that, how to get through that. And then we addressed, hey, maybe you want to look at different things. Which is just a reality, that's the way the enterprise is.

So really, we hit the gamut here, and I just want to thank you.

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Raphael Meyerowitz: Thank you for having us. I appreciate it.

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Nirav Sheth: Thank you. Thank you very much, and thank you Raph for the amazing partnership with Presidio.

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Raphael Meyerowitz: Thank you, appreciate it.

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Patrick Moorhead: Absolutely, and good luck with the huge event that you have coming up, I've been getting pre-briefings on that nonstop, and it's been wonderful. So thank you very much.

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Nirav Sheth: I appreciate it. We're going to be unleashing a lot of innovation that is right in the wheelhouse of this conversation.

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Patrick Moorhead:Absolutely. Well, I want to thank you all for tuning here to The Six Five, a great conversation about optionality in the construct of VMware and some of the changes going on there. I want to thank Nirav and Raphael from Presidio for coming on the show. Tune in, hit that subscribe button, and hit all the content about Pure that we have out there, and all of the storage and data management conversations we've had over the last seven years.

Take care. Bye-bye.

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