Revolutionizing Cloud Infrastructure: VMware's Leap and Broadcom's Innovative Vision
Apr 25, 2024
Evan Kirstel
Embark on a journey through VMware's evolution as we chat with Prashanth Shenoy, VP of Marketing from the VMware by Broadcom Cloud Foundation team about the company's transformative leap post its Broadcom integration. You'll uncover the strategic shift to a subscription-based model that's revolutionizing customer access and flexibility, and hear firsthand about the bold decision to whittle down a staggering 8,000 product offerings to two foundational products. These changes are not just about numbers—they represent a cultural shift aimed at refining customer experiences and driving innovation in the dynamic cloud infrastructure realm. Get ready to have your perspective on enterprise software transformed.
As we pivot to the broader landscape of Broadcom's innovation ethos, prepare to be intrigued by how their business approach distinguishes them in the tech space. This discussion isn't just about software; it's a glimpse into the future of cybersecurity and AI, particularly the exciting potential of Generative AI. Tune in to understand the synergistic power of Broadcom's diversified portfolio, and how it's instrumental in digital transformations across industries. Plus, we'll give you a sneak peek at Broadcom's commitment to community engagement, with a calendar of events that promise to keep partners and customers connected to the pulse of technological advancements. Don't miss this engaging blend of insight and foresight where technology meets strategy.
Embark on a journey through VMware's evolution as we chat with Prashanth Shenoy, VP of Marketing from the VMware by Broadcom Cloud Foundation team about the company's transformative leap post its Broadcom integration. You'll uncover the strategic shift to a subscription-based model that's revolutionizing customer access and flexibility, and hear firsthand about the bold decision to whittle down a staggering 8,000 product offerings to two foundational products. These changes are not just about numbers—they represent a cultural shift aimed at refining customer experiences and driving innovation in the dynamic cloud infrastructure realm. Get ready to have your perspective on enterprise software transformed.
As we pivot to the broader landscape of Broadcom's innovation ethos, prepare to be intrigued by how their business approach distinguishes them in the tech space. This discussion isn't just about software; it's a glimpse into the future of cybersecurity and AI, particularly the exciting potential of Generative AI. Tune in to understand the synergistic power of Broadcom's diversified portfolio, and how it's instrumental in digital transformations across industries. Plus, we'll give you a sneak peek at Broadcom's commitment to community engagement, with a calendar of events that promise to keep partners and customers connected to the pulse of technological advancements. Don't miss this engaging blend of insight and foresight where technology meets strategy.
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Speaker 1:
Hey everybody, always excited to have conversations with the VMware Cloud Foundation team at Broadcom Prasant. How are you, hey, doing? Good Evan.
Speaker 2:
Thanks for inviting me here.
Speaker 1:
Well, thanks for being here. Last time we met, we discussed your work at VMware Explorer in August. That was only last year, but it feels like a lifetime ago At least. Yeah, so this is a very quick update on how things are growing, how things have progressed. A lot of work has been done. How are you settling into your new role at Broadcom?
Speaker 2:
Yeah, it's been exciting. But first I have to say you have a way more exciting background than me. Mine is kind of this dull, boring background.
Speaker 1:
Well, the beauty of working from home is you know you have full control over your plants, so that's always good.
Speaker 2:
It shows there.
Speaker 1:
But thank you, thank you for that.
Speaker 2:
Yeah, it's been a whirlwind. It's been five months but, as you said, it feels like a lifetime in terms of the shift from us being an independent VMware company to now being part of Broadcom. But I have to say I'm pretty excited for a few things in terms of the pace in which we are moving the decision making, in how we are working with our customers, partners, influencers to make decisions and move forward with that and, three, I think, the level of focus that we have on our R&D and bringing things faster to market. So a lot of good things. But obviously, with this pace of change and the amount of change comes some complexity and confusion in the market, which I'm sure we're going to talk about, and that's the thing that we are trying to balance and juggle.
Speaker 1:
Yeah, talk about the general transition at a high level for people who might not be deeply personally involved. What are the top two or three main changes you've experienced moving to Broadcom?
Speaker 2:
Yeah, I would say number one. When we became part to Broadcom yeah, I would say number one. When we became part of Broadcom there were three big areas of changes that we did right. So one I would say is the business model transformation, the second is the portfolio and the product transformation and the third is our ecosystem and route to market transformation. Right, and engulfing all of this is what I would call a cultural transformation, because we tend to forget it's not just about technology, it's a lot about people and processes too, and that's been kind of one of the biggest change and, I feel, a change for the better. So let me just talk about the portfolio transformation, the business model transformation first.
Speaker 2:
So, not surprising, this was even when we were an independent company. We were talking about how we want to move from a CPU and a perpetual licensing model, which was a very archaic old system, to more of a subscription core-based pricing model, right, which is a new way of doing business. And literally I think VMware was one of the last vendors in the enterprise software space to move to a subscription business model. So we did that change literally on day one of joining the company. But with that we made sure we provide license portability for our customers, which is very, very critical and, I feel, pretty unique in the industry where our customers can take the license of our product, deploy it in one place in their data center and tomorrow take it to a hyperscaler or a cloud service provider of their choice that VMware supports and ask them to deploy it without having to pay anything. So they're entitled to the license and true license portability. So true investment protection, true flexibility and choice, right. So it's a big big deal for us and we are off to the races, where Google Cloud has already signed and you're going to see other hyperscalers and all our cloud service providers signed. So that was the first big change.
Speaker 2:
The second big change was on our portfolio transformation and this is where I think we made some very big changes. For all the innovation juggernaut that VMware was as a company, we made it a bit too complex to do business with us and the number of choices that we provided to our customers, and it's a bit of an analogy to research done on 401k, right. So where they figured out, if you provide too many choices of 401k investment options to the customers, they don't tend to make any. They're like analysis, paralysis and it makes it very confusing. They're like analysis, paralysis and it makes it very confusing. Your choice, where it really hits hard and provides the right value, is really really valuable. So it's kind of what we did with our portfolio.
Speaker 2:
We had around 8,964 SKUs I'm literally not joking Of offers and SKUs out in the market for essentially our cloud infrastructure product line. Right, like every different permutation and combination of our software of compute network storage management, automation, kubernetes, orchestration, et cetera. Right. And while the intention was initially good, it very soon devolved into a very complex set of offers, right. So we took a very hard look at what customers truly want from us was only two major things. One for large enterprise customers and customers who are looking towards major cloud transformation they wanted VMware to provide a true private cloud experience. Right, give me that full software-defined private cloud of software-defined compute network storage management automation and give me that public cloud-like experience on-premise or wherever I want to deploy right in co-location et cetera. So that is VMware Cloud Foundation. So that is VMware Cloud Foundation.
Speaker 2:
The second was hey, I don't need this full buffet, I just need a virtualized compute environment with some good operations to manage my compute environment. And that was vSphere Foundation. So those satisfied 90 or 95 percent of all of our customers' requirement. And that's what we did in terms of portfolio simplification moving from those 8,000-plus offers to just two critical foundational offers that most of our customers want from us. And on top of that, we provided a key set of hybrid cloud add-on services right, whether it's for ransomware and disaster recovery, whether it's for modern workloads like private AI, with our private AI foundation for application developers it is the Tanzu. And then for advanced networking, we had advanced networking services. That's it. That's the portfolio simplification.
Speaker 2:
Now, when we do this, it obviously causes some confusion with the customers to say, hey, what do I do with all of the stuff that we had? So we've created some really good transition models in terms of where you are in your cloud maturity and what is the right product for you and how do we help you get from your existing environment to this new environment. So that's the second big area of transformation and change that we have done, and the third is the route to market and ecosystem right Like VMware is always known for building some of the strongest and ecosystem right Like VMware is always known for building some of the strongest ecosystem partnership right From the OEM vendors that we have to the chipset vendors, to ISVs, the software vendors, to, obviously, our hyperscalers, to cloud service providers, to our DCs and resellers. Right, there are various different route to markets in which our customers can purchase, deploy and get services from our partners. But, just like with our portfolio, we made this route to market extremely complex inconsistent experience of our product, depending on the route to market. Inconsistent pricing, depending on the route to market.
Speaker 2:
So what we did in one word was standardization. Market. So what we did in one word was standardization. So you'll get the same product with the same software release, no matter which route to market you go to, with the same pricing model. And that was very critical because of the license portability that I talked about. Right? So if you need license portability, it cannot be different when you go from one route to market to another. A customer should be able to take that license and go through any route to market. So that was one of the main reasons why we also did standardization there. So those were kind of the three big areas of changes and transformation that we've done, and literally we did this in less than a month to two months, and in any other company this would have taken at least three to four years to do this, and that is what I've been saying the pace of change and decision-making, but being very thoughtful about why we are doing it and working with our customers to make sure they understand the value of this for them.
Speaker 1:
Well done. Well, thanks for that explanation. It's no secret that Broadcom is doubling down on VMware Cloud Foundation with tremendous focus and emphasis from an R&D and a related perspective. So what are the potential benefits over time and today from that strategic decision?
Speaker 2:
Yeah, one of the key things is I talked about the culture, right Broadcom invests close to 15% of our revenue directly into R&D, right. So it's extremely critical for us to know that if we don't invest in R&D, we are going to be left behind and customers have choices. So we are very, very aware of that. So part of this ruthless simplification and hyper focus on few products plus an incremental investment in R&D gives us that confidence that we can build products that are better than what is available out there and we can deliver it faster to our customers. So that's the promise that we have for our customers and that's one of the biggest cultural changes too, right, the simplification and incremental and increased R&D investment. So I just wanted to kind of state that Now, when it comes to benefit of VMware Cloud Foundation, simply put, we want VMware Cloud Foundation to be the best private cloud infrastructure platform in the world, bar none, right, for any customer who want that cloud operating model experience in their co-location, in their data center or wherever they want to manage service from. We want to provide that in a single integrated product offering to our customers, and what that means is it provides a complete, modernized infrastructure for our customers to run their modern applications, whether it's VM-based, container-based Kubernetes, orchestrated. That's number one. Number two we build infrastructure for developers to build awesome, kick-ass applications. So you truly need to provide that seamless, frictionless cloud experience that the developers truly love. That's why they moved to the public cloud on premise or in the co-location, wherever this private cloud runs right. So that's the second best thing how do you create the self-service cloud experience for developers on this infrastructure?
Speaker 2:
It's the second key focus area and benefit for our customers. And third, we are known for providing enterprise-grade security and resiliency. Right, because our customers trust us to run their most business-critical applications on us. So it's our accountability and responsibility to create a very highly resilient infrastructure but also help our customers rapidly recover from any cybersecurity threat like ransomware, if and when it happens, right.
Speaker 2:
So those are the three big focus areas for us and, frankly, the benefit that we deliver to the customers. Focus areas for us and, frankly, the benefit that we deliver to the customers and we do this in a highly highly efficient total cost of ownership and we stand by that right. When we have done analysis of our customers' actual deployments, we come out better 40% to 50% lower TCO compared to a native public cloud service percent lower TCO compared to a native public cloud service. Light to light comparison or any of the traditional hardware defined infrastructure in their data center, a three tier architecture, if you will, and these are based on customer deployments, based on our current offering, and those are kind of the key value propositions, I would say for our customers value propositions.
Speaker 1:
I would say for our customers, Very exciting. What a great overview and opportunity there. So you had an amazing 22-year run at Cisco. Without going into too much detail on the past, how does that experience kind of inform your view of the marketplace today and the opportunities that are still out there?
Speaker 2:
Yeah, there are some similarities and some differences and I'm comparing, like Cisco and Broadcom right Like. I've had an awesome experience in both companies. Otherwise there's no way I would have been at Cisco for 22 years of my life right, I spent my youth there, but I had my kids as I was being there. I got married, had several job changes there, from engineering to product to marketing, et cetera, so I had a wonderful time.
Speaker 2:
And Cisco is known for a few things, right Like it's a market leader in very key areas of where our customers are looking for digital transformation, like networking, for example. Right, so, and it's known to have a very strong ecosystem of channel partners, et cetera. Right, so those are kind of the similarities that you see with Broadcom, right, broadcom has 26 different business entities and every single business division is a market leader, so we pride ourselves in building sustainable but market leading innovation and business divisions. Where we see the difference in terms of the culture is these business divisions are very independently run and we have complete control, autonomy as well as accountability and responsibility to go running. So that ruthless focus is what I feel is very, very unique to Broadcom.
Speaker 2:
That I quite enjoy, because you get to collaborate but you get to make decisions and you get to stick with it and you fail right, like people fail, but you learn from that mistakes and you move rapidly and you invest enough.
Speaker 2:
So that for me is very, very exciting. We don't get bogged down by all these matrixed model of having 55 people in a room having to make decisions. We get to make those in a lot faster. Think outside in, think what the customer wants and everything else is noise and we just move ahead. So that for me has been very exciting here the pace of change and the pace of innovation, and we just move ahead. So that for me has been very exciting here the pace of change and the pace of innovation and what we get to do with the customers. But we also need to do a better job of articulating all of this with our customers, to our partners, to all of the industry, analysts and influencers, so that they understand the inner machinery of why we are doing what we are doing. Otherwise, there's enough part in the market out there that causes a lot more confusion than providing clarity in terms of our strategy, and hopefully customers will get that over the next few months as we unveil our rapid innovation in the market.
Speaker 1:
Well said, very, very helpful. And as you settle within Broadcom you must be discovering tons of synergies as well with the rest of the business. What does that mean for customers and advantages opportunities, broadcom's business. Now you can truly call Broadcom a very critical strategic partner for most of our customers' digital transformation right.
Speaker 2:
We got the underlying semiconductor and hardware to make these digital transformations happen.
Speaker 2:
Then we have that market-leading infrastructure software, whether it's the mainframe software, whether it's the endpoint security, whether it's the whole cloud infrastructure software, whether it's the application development with Tanzu, whether it's the software defined edge with our SDE business, or the advanced security.
Speaker 2:
So we got all the key critical components that most of our customers need to help think and transform their business models, come up with new services and also transform their IT. So I feel we elevate the level of relationship that we build not just with the IT folks but truly with the business leaders of our organization, not just enterprises but also other type of organizations. That's one and two. The breadth of channel partners SIs, oems, hyperscalers and cloud service providers is bar none right, like the extensive relationship that we have built with them only expands right now and with standardization that I talked about, it gives that predictability both for our partners to see what to expect from Broadcom, but also to our customers in terms of like, hey, here are my choices, but I can expect that consistency of experience, consistency of service and consistency of pricing too right that they kind of lack in the previous model. So those are some of the other benefits that I feel us being part of Broadcom will deliver to our customers.
Speaker 1:
Fantastic, what a fascinating insight and just big picture. Wise, beyond your immediate day-to-day, you know what are the two out of three major trends that you're most excited about, personally, professionally as well. Over the next year or two. There's so much happening. What do you think about on a day-to-day basis? Big picture.
Speaker 2:
Yeah, big picture I mean the buzzword of maybe the decade is AI right, and especially Gen AI. So I feel there's a lot of potential for good if we all behave as good corporate social citizens in terms of how to responsibly and ethically use AI. There's a lot of potential for Gen AI to transform business models, to provide smarter products, to provide better and new services to the end customers. So I'm particularly interested in what we as a company are doing, both from our semiconductor side on how critical that is for making GenAI successful, from the networking side to the server interconnect side, to the optics side, everything right, as well as our cloud infrastructure software side right. So the power of those two is very exciting for me.
Speaker 2:
And Gen AI I think it's a big, big market trend that I feel is going to define the way we work, live, learn, play, et cetera. Going back to the Cisco vision that we had right. It's going to impact Gen AI big time is one thing that I'm looking forward to. The second is the world of security is ever changing and very, very exciting. There's always a cat and mouse game between the threat actors and the threat preventers and now, with all the advances in AI done too. It very nicely ties to how the landscape of security can change and how we can help our customers rapidly recover from threats and also prevent threats from happening using AI and machine learning. So those two are pretty exciting fields for us to keep track of and see how we can see the next 10 years of transformation happening in our customers. So looking forward to that.
Speaker 1:
Exciting times and I share your enthusiasm for all of that and in the run up to Explore, you guys have a busy schedule. I see lots of events and meetups and roadshows and other things. What are you personally looking forward to? Any trips coming up in the next few weeks, months that you want to call?
Speaker 2:
out. Yeah, we've been doing a lot of. As I mentioned, one of the things with this big of a chain is to take the time to truly sit one-on-one with the customers, listen to them, listen to all of their concerns on one with the customers, listen to them, listen to all of their concerns and help articulate what we are doing and why we are doing and how we can help them and truly take the feedback and make changes in our go-to-market pricing. So that's what we've been doing. In the last three to four months with the Roadshow, I've met hundreds of customers, from CIOs to VP of Infra and IT operators. We also have our EBC centers here where customers from all around the world come here. So it's been a lot of listening and learning and also helping articulate our strategy. So we'll continue to do that in the next few months with expanded roadshows across 25, 30 cities.
Speaker 2:
That we are doing Wow. Number two it's Explore, right. So this is the first Explore as we become part of Broadcom. So we are really, really excited to unveil our strategy, some of our broadest set of innovations that you're going to see come out in the market in all the areas that I talked about. So looking forward to talking to our customers and partners there over the next coming months.
Speaker 1:
Wonderful, well, so exciting. Congratulations on all the hard work and your enthusiasm is infectious. I hope to see you, if not at Explore, then earlier. So thanks, prasad, thanks for your time and insights.
Speaker 2:
Yeah thanks a lot for inviting me. Looking forward to our conversation and, yeah, hope to get to see you at Explore.
Speaker 1:
Take care, thank you, thank you everyone. Take care, take care.