Pat Gelsinger and his calculated plan for VMware

As the Carbon Black and Pivotal acquisitions expand VMware’s remit, the man in charge told ZDNet every step his company has taken has been deliberate.
Written by Asha Barbaschow, Contributor
Image: VMware

The last 12 months for VMware has seen a handful of acquisitions, a commitment to open source through a focus on Kubernetes, and preparation to become the platform for telcos as they make 5G a reality.

But according to its CEO Pat Gelsinger, every step taken has been a calculated one, and one also helping the chief get closer to his passion project of "fixing" the security industry.

Speaking with ZDNet during VMworld 2019 in San Francisco, Gelsinger dismissed the idea that all of this action has spread VMware too thin.

"Every move that we're making is calculated. And one of the -- I'll say the business Bibles for me, is profit from the core, how do you expand a business," he said.

"If you look at what we've done over the last six-seven years, every move has been how do I take what I'm doing today and augment it with a capability that has a high adjacency to what we're doing.

"If you do adjacent moves, you have a high probability of success; if you do very unadjacent moves, you have a low probability of success -- that's the whole thesis behind it."

Specifically pointing to the Carbon Black acquisition, Gelsinger told ZDNet he sees security as a very adjacent move. He said VMware has been building its network security capabilities since the launch of NSX; similarly, Workspace One, which is bundling security and management.

To Gelsinger, VMware was already on its way with security, but now his company will have common cloud analytics that Carbon Black has already built.

"And I've got this monster sales channel right next to me called Dell," he added.

"So to me, to be able to bring Carbon Black, a sales channel that reaches the CISO, which to me is a weakness I have today, but compliments all these other things that we've already put in place, to me, it's a very adjacent play and one that if we solidify and position as not just the infra but the secure infra provider, that's pretty powerful.

"That's how we've thought about that."

Gelsinger has a "deep passion" to fix security. Reiterating what he has said in the past, he labeled the industry as "broken" and "bad."

"The world should not put more of their lives on technology platforms unless we do a better job here. For the entire tech industry, we've just got to do a better job in the security space," he continued.

Meanwhile, the Pivotal acquisition was described by the boss as both a defensive and offensive play, one allowing VMware to position itself as relevant in the world of next-generation applications.

"You're not positioned to capture people's next-generation applications and as they build applications they can shift away from your platform," Gelsinger told ZDNet, quoting what market analysts had said previously.

"Three years ago, your biggest risk was cloud; six years ago, your biggest risk was Open Stack. If you look at it now, you can clearly say, 'Hey, these next-generation applications, are you going to be the enterprise supplier of choice?'. So in that sense, I think we had a bit of defensive risk ... our platform was at risk.

"At the same time, if you look at the dollars, the business value at play in the developer layer -- a lot of money there. It's a very rich, offensive opportunity as well -- both defense and offense -- and if we expand the value proposition for all of the VMware operators today, to be able to effectively reach the developers and the application in a much more effective way than they do today ... if we can bring those worlds together, that's a pretty huge benefit for our customers as well."

Also: Technology as a force for good: The VMware plea How to run a company like Michael Dell: A lesson in mergers, acquisitions, and cultural alignment | VMware claims PKS for itself with Pivotal acquisition

More of a case for separation

A year since ZDNet last spoke with the CEO about why VMware is its own entity within the Dell Technologies family, rather than wholly-owned by the Michael Dell-led organization, Gelsinger said every reason he gave 12 months ago has become even more pronounced.

"Is the ecosystem more or less consolidated for VMware? If anything, it's become more diverse as we moved into more areas, so having ecosystem independence is more valued," he said.

According to Gelsinger, a hardware supply chain company and a software innovation company have become even more pronounced of late, particularly in the current climate, pointing to the China-US trade dispute

"How much time do I spend worrying about surface mount technology and injection moulding -- and this is a dominant issue inside Dell. Now if I bring those two companies together, executive staff meetings are dominated by supply chain issues," he said.

"I don't care -- I care, but it's not the core of my business, so I'll say every aspect has reinforced a major innovative enterprise software company that has independence, but also great value for interrelationship and partnership with a world class-scale hardware partner.

"I think we're carefully navigating those two worlds ... and now with Dell going public, it sort of removes some of the craziness ... we have a very clean and I think sustainable structure.

"I'd say it's working pretty well."

Also: Telcos the target for VMware's Edge and IoT upgrades | VMware updates networking and security portfolio VMware Cloud on Dell EMC now available | Dell Technologies backs VMware's Kubernetes by announcing PKS support

VMware closing the purse, for now

When asked where VMware's next line of acquisition is going to come from, Gelsinger said his company isn't planning on making any further direction-shifting purchases.

"I was asked that yesterday by our largest shareholder ... they were relieved by my answer that I have a whole lot to digest and I'm going to focus on getting these well operationalized," he said.

"I'm not saying that we're going to do this in an episodic way, but we've done little acquisitions and organic and meaningful expansions over the last three-four years; if you go back six-seven years, Nicera and AirWatch -- two very, I'd say category-defining moves for us in fairly short order. Now we've done two [more] fairly category-defining moves, and our focus will really be on operationalizing those."

This doesn't mean, however, that the shopping spree is over.

"Not that we won't do some other tuck-in acquisitions -- Uhana helps my telco initiative, Bitfusion it's just, you know, managing GPUs ... Avi [Networks] is a no-brainer -- we had a weak load balancer, they had a really good one," Gelsinger said.

"Had we had more R&D resources over the last couple of years and weren't so consumed on the [NSX] V to T transition, we would have done it ourselves, but we just didn't get around to it. So Avi was a very natural extension. You could see us do those natural tuck-ins, natural extensions, but I don't see us making any major category-defining moves for a while."

"I've got a lot of work to do," the chief concluded.

Disclosure: Asha Barbaschow traveled as a guest of VMware to VMworld in San Francisco. 

Editorial standards