VMware Explore 2025 | Sarbjeet Johal, StackPane

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Keynote analysis: Private cloud defines VMware’s streamlined strategy

Private cloud has emerged as the defining strategy for enterprises navigating cost, governance and artificial intelligence integration, reshaping the balance between on-premises infrastructure and public cloud elasticity. The shift reflects a consolidation of services and a push toward efficiency as companies weigh how best to modernize legacy applications while preparing for AI-driven workloads.At the center of this evolution are clear choices around streamlining services, reducing complexity and aligning ecosystems to support enterprise-scale adoption. The conversations in the industry now revolve around how VMware, under Broadcom Inc

play_circle_outline Hock Tan's consistent message highlights community engagement and the importance of VMUG.

play_circle_outline Discussion on VCF as pivotal for VMware's future and its integration with Kubernetes.

play_circle_outline Certifications viewed as key indicators of VMware’s health and customer engagement.

play_circle_outline AI use cases addressed, including local processing and sovereign cloud opportunities.

play_circle_outline Broadcom's networking capabilities may enhance VMware's offerings in AI and cloud computing.

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Sarbjeet Johal, StackPane

In this VMware Explore 2025 keynote analysis, theCUBE’s John Furrier and Rebecca Knight are joined by Sarbjeet Johal, president of Stack Pain, to break down Broadcom’s latest strategy for VMware and the enterprise cloud ecosystem. The discussion examines how Hock Tan’s keynote message - centered on VMware Cloud Foundation 9.0, streamlined services and renewed focus on private cloud - signals a decisive shift from past experimentation to operational simplicity and AI-driven innovation.

The conversation unpacks the disappearance of Tanzu, the consolida... Read more

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What are the key points discussed regarding Sarbjeet’s analysis and Hock Tan's approach towards VCF and VMUG? add

What is the significance of Kubernetes in relation to VMware Cloud Foundation (VCF) and how are customers utilizing VMware Stack for their applications? add

What is the current response and sentiment of VMware's customers towards the company's offerings following its acquisition? add

What are the core components and capabilities of VMware's AI services? add

What is Broadcom's involvement in networking and how might their acquisition of VMware impact their future capabilities in that area? add

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Sarbjeet Johal, StackPane

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Rebecca Knight

>> Hello everyone and welcome back to theCUBE's live coverage of VMware Explorer. I'm your host Rebecca Knight, alongside my co-host and co-analyst John Furrier, and I would like to welcome back to theCUBE, good friend of theCUBE, Sarbjeet Johal, President of Stack Pain. Thank you so much. Gentleman, we're all just back from the main stage. We heard the keynote. Hock Tan was there, the era of private cloud is here. I'd love to hear your first impression. Sarbjeet, I know you were tweeting-

>> He's got his notebook....

Rebecca Knight

>> Well, and also his personal computer. He was tweeting like crazy.

>> His tweets.

Rebecca Knight

>> Exactly. Do you want to read some highlights, some first impressions highlights?

>> Yes.

Rebecca Knight

>> Yeah, why don't you start there?

>> I think my first impression is that there's a lot of cleanup being done this year. Last year, quite a few promises made, and last year and year before last year, Hock Tan has been on main stage for last two years. Even before the deal went through, he was on main stage once and he spoke for two minutes that time. And last year, he spoke longer. Long story short, the Tanzu was talk of the town a couple of years back, and last year, well, Tanzu's gone. So, we clean up. No mention of Tanzu. I think they should have mentioned it and state, why did they kill that sort of brand of their services, if you will? And where they're shelving those services. So, they're putting that under VCF 9.0, yeah, and we'll go through that actually what is there now. But there's a lot of cleanup and a lot of streamlining. The message was more crisp on the AI side this time. So, I think they're going to the substance, very core services, what VMware was known for, and they're trying to sort of kill this shiny objects which may pan out or may not.

>> I mean to me, Sarbjeet, I think good analysis. I think the key was they're flexing all-in on VCF as they've always been doing. So, if there's one thing Hock Tan has been, it's been consistent. He's been consistent and transparent what they're doing, we're moving to subscription, increasing prices, cutting expenses. Rein that in, that business performance is good. We commented on that on our analysis. But clearly, his opening line was, "I love you all," and he loves the community.

Rebecca Knight

>> He called everyone family.

>> Calls them family.

>> He mentioned VMUG.

>> VMUG. He loves VMUG. And by the way, it's strategic.

>> Yes.

>> VMUG is critical for the success of VCF because they need the product requirements, they need the community, they need to get the metrics up on certifications. This is a key metric to keep the subscriptions up and also the technology pipeline and flywheel. Broadcom knows how to do technology. So, that's good that he's got that nailed down. The events changing into a smaller intimate event, bigger ecosystem partners, Google and IBM, Amazon, all the big whales are here. So, Google and Microsoft seem to be the top dogs in their partnership. But he came out and said, "Last year we said private cloud, this year we delivered." Now, some would say, is it good enough? I think it is. Did he knock it out of the park? We'll see. There's still some cracks in the foundation, Tanzu, what's going on with developers. That's clearly an interesting comment. I think that's right. It seems to be not getting a lot of love. However, Kubernetes is native to VCF. So, VCF seems to be the galvanizing point and they're not hiding from that. They're leaning into it.

>> Yeah, I think that's their cash cow. And even for the cloud providers, when I was at Rackspace, we made the most amount of money from VMware Stack. So, a lot of customers are still running their older applications on VMware, right? So, the question is, are they writing the new applications on using VMware Stack? So, that is a question. Of course, they are maintaining the old applications, it can be SAP. It can be any other homegrown applications and/or third-party applications, but they're kind of moving it, from one data center to other and/or consolidating and/or taking it to a cloud provider where they want the same sort of continuity, if you will. And some of the application vendors don't even support the certain cloud-native constructs for their applications because they did never bother to made their applications or SaaS or on-prem applications cloud native.

>> Yeah, I mean I think that's a good point. I mean, I'd throw back at, love to kind of unpack this. VMware is operational. People who have VMware, they're running stuff. So, the developer piece is kind of above them. I think the Kubernetes thing is something to watch because they're taking kind of an AWS approach Sarbjeet. We've seen AWS do this. They have a database or you can use Snowflake. So, if you're going to bring native Kubernetes into the VCF, well, if you want all VMware, great, you got it. If you want to do your own thing, do your own thing. So, that's that. I think the ecosystem opportunity besides the big whales here is the upcoming new partners, more engineering-oriented. We talked to a few yesterday here on theCUBE and also on the floor. This is where we got to connect the dots is that I think there's going to be a surge of new kind of ecosystem partners that look a lot like SIs because there's integration work done. Because if they want to be the private cloud, which is basically the cloud for the enterprise, and have all that elasticity and have the flex and people buy their own gear for on-prem. That's a bet. It's got to work. It's got to be friendly for developers and it's got to be manageable and costs. That's going to come down to integration because when you start rolling in gen AI and operational day two, day three operational things, this is not for the faint of heart, and you can't just wave at it and wave your hand at it. What's your reaction to that?

Rebecca Knight

>> I think you're right. The key is that VMware is an and story, not or. So, it's like public cloud and VMware. You can't say that don't go to public cloud. I think the message should be, okay, you can put stuff in public cloud where it belongs there, but we are better for you when the workloads are mature. The economics of the systems will be better if you run it locally, and this is how we will do it for you. I think that message will sort of jive well with the audience. I've said this many times, there's a economics of creation of systems, right, and economics of operations of systems. When it comes to operations of systems for mature workloads, the public cloud is always more expensive. We know that. The unit of public cloud is always more expensive. But then can you innovate faster on the private cloud versus the public? We know the story there. So, I think that, they need to be very clear that, hey, for these workloads, we're the best bet.

Rebecca Knight

>> Well, I want to ask you about how this message is resonating, and you talked a little bit about it in that last comment there. But as you said, VMware is really sticking to its knitting, doubling down on its core services. Going back to this, VCF, as you said, it might not be setting the world on fire, but it does work as advertised, and it works. So, what is the community now, the customers, the people who have been at VMware Explorer from the start, how are they responding and what is their take on the company that had a storied history, and that they felt some affection toward or loyalty toward? In your conversations, how are they responding to what VMware is giving these days?

>> Yeah, there was some bitterness in the beginning when the acquisition happened, and first the clarity was not there when some information came in. It was said that we were going to shrink the number of services and we were going to cut the long tail because VMware was getting bogged down. Their sport was getting bogged down by this long tail of customers. They were paying little, but they're sucking a lot sport sort of calls because the way the whole business model was, right? So, they said, "We want to keep the biggest customers and serve them well." That's number one. Number two, they reduce the number of SKUs. It was crazy actually. So, they shrunk the number of services and they repriced those services in a way that it is great for big customers, but it is not good for the lower end of the customers. So, the lower end of the customers are kind of pissed off, mad, sad, they're actually going somewhere else. So, they have mixed feelings.

Rebecca Knight

>> On the main stage though, we heard from Grinnell Financial, Jeremy White, a company of 17 people with 40 mission-critical workloads. I mean, was that trying to counter that narrative, would you say, in the sense of here's a little guy punching above its weight with VMware. I mean, what would you say to that?

>> Yeah, I think they are trying to prove that. On the other side, they also mentioned Walmart, and we know Walmart doesn't have a choice kind of, in many ways. They can't go to AWS. I remember when they came to Rackspace, to us, why they came to us was because they couldn't go to AWS. So, yeah. No, definitely. There is some nimbleness. Let's talk about, on that note, let's talk about the AI on VMware, right? So, they have I think a pretty good story there. If you want to run AI locally, it can be sovereign clouds for a country and/or for a company or for a region. There's some smaller countries in the Middle East, for example. They can use these kind of services, right? So I think it makes sense because they have four core components. They have the model mart, right? The model gallery, they call it. The model runtime. And then they have data indexing and the retrieval service. That's for the RAG. When you want to infuse your data into the models at runtime. And also, if you want to fine-tune your models, you need data indexing. And actually, one thing was very interesting during that, under number three, data indexing and data retrieval, that they have, you can set a policy that it will pick up the same data and refresh that data, put that new data into the inference at runtime. You can shut that policy every week, every five hours and all that stuff. I think that was kind of cool. They're addressing very practical sort of needs of the enterprises on the AI side. And the last one is agent builder. Agent builder, everybody has it, but nobody has a good story. I think they're in the same boat.

Rebecca Knight

>> Okay.

>> Well, I mean, I think VMware is putting a stake in the ground. They said last year, "I promise we'll deliver value." They increase prices, they have to deliver the package. Now, their strategy is clear. You buy the one SKU, simplify the product set, they did that. We'll hear from the community, we'll find out. I went into the expert sessions. The expert sessions are packed, but some of the other demos aren't packed. So, you're starting to see more, I think, peaked people. And again, I think the key for VMware is if they can get heat to certifications, that's the tell sign. It's like a report card. It's a health check.

>> Yes, yes.

>> Certifications are up, that means they got momentum. If not, it's waning. So, that's going to be, to me, the true test. Does this dog hunt? That's going to be clear.

>> Yeah, actually, I usually say that, I only pivot if there's a dip. Individually, we pivot from one carrier to other, there's a dip in our income, in our productivity. So, any vendor, they pivoted big time. So, there will be a dip. They knew that, we knew that. So, I think the dip last year, that was the bottom. I think last year was the bottom. They're coming, just coming out of that right now. And if people are getting more certifications, that means they are creating more skills gravity, and we talk about skills gravity all the time. So, a vendor which has more skills gravity, they will win because they have more practitioners who are out there. And then, for the companies which want to deploy that technology, that means they can get that sort of labor or know-how at a reasonable price.

Rebecca Knight

>> The other tell, you mentioned the certification, but Sarbjeet also mentioned the idea of, are you moving new workloads to VMware or is it just the old ones? Because we know that VMware has coexisted with the cloud for some time, but is this new stuff too?

>> Yeah, they're turning on the features that are in there because remember, they get everything as one package. So, if I'm Vmware, as a product person, I want to get more features in there to turn on more subscription. Because, I mean, the fact that VMware now is a subscription business is a huge testament to the management team because the torpedoes, as Dave Vellante says, full speed ahead, they did it. And look at the results. The financial results of VMware inside Broadcom is remarkable. Okay? Again, they cut a lot of the bloated fat from the old VMware, some say, and doubled prices, simplified the SKUs, promised innovation. That's the key. They got to keep doing that. That flywheel is, if you don't have the customer requirements, you don't have the technology people implementing it, getting those requirements or build some chips in there. Sarbjeet, we talked about, Broadcom has another business, which we have a senior executive coming on this morning on Ethernet side, these clouds need networking. If you look at all the top conversations around what runs an AI factory, whether you're talking about Nvidia or large-scale clustered systems from Dell, it's all network fabric. Storage and networking. Now, there's no storage. There's all storage companies here, NetApp, Rubrik, IBM. Where's the networking companies? Oh. So, Broadcom does networking.

>> Yes, they do that.

>> So, is there a dot to connect there? I've been saying it for years.

>> There is, actually. We said that long ago, when we actually, VMware was acquired by Broadcom during that year, I was sitting with you and Dave and I sort of had the hunch, or we can see where it's going. So, if they can put their chips with the software, with what VMware has and they can make it work, perform better, it uses less power and it's more economical, I mean, game over.

>> Well, that's the puck.

>> Exactly.

>> That's skating where the puck is. So right now, I think there's a lot of undercurrent around let's get VMware solid, packaged, let people run their clouds. But if you look at all the hyperscalers, every single one and the new ones, the Neoclouds, and throw OpenAI into the mix and all these big AI companies because they have to build large-scale clouds themselves. It's all designing large-scale systems with systems software and networking, and HBM, solid status packaging. It's a total systems engineering problem. And I think Broadcom might have a little bit of a secret sauce going on that they could bring to the table. Again, that's my speculation of no inside information, but that's what I would do. I mean, makes sense.

>> The other prediction, other thing we talked about a couple of years back was that Google's TPUs are as strong as, if not stronger than Nvidia's GPUs, and that proved to be right. Now, OpenAI is using their TPUs for inference.

>> Google, one of the big boots here. Look at...

>> We said that.

>> We did say that. We're always right on the queue. Follow our advice and buy all the stock. No, don't do that. Dave always says, "Don't buy stock advice." Well, I don't know why he said that. We're not brokers. But I mean, people are looking for product-led growth. I mean, if I'm looking at Broadcom stock right now, it was over 300, dropped below 300. It's a darling stock on Wall Street. Nvidia and Broadcom are up there. If you bought them when we were starting and have this conversation a few years ago, you'd be very well off. So, very strong financial performance on the business front. So, that's going to come from just good business, and that's going to come from building large-scale systems that are cost-effective with operating leverage. We'll see.

Rebecca Knight

>> But you have to continue to, as Jeff Bezos says, delight customers. That is...

>> Yeah, and that's the transformation. And that's where they got to keep the eye on the ball. And that's why Hock Tan is smart to come out and saying, "I love you all," including the customers and VMUG, because they have to nail the customers because the customers are the ones that have been transforming their business. And, yeah, I'll take the tax and price increase, but deliver the value and hit the objective

Rebecca Knight

>> Yeah.

>> Yeah. From the public cloud side actually, I think that's where you're going a little bit, that I think the AI has thrown a monkey wrench into the public cloud party, if you will, and it has sidetracked that discussion. But having said that, the cloud will play a pivotal role. At the end of the day, economics of the AI will dictate where people go. For that reason, the native chips of AWS, the native chips of Google will be a huge benefit. Maybe not in the next three months or six months, but two years from now, three years from now, they will win because a token is a token is a token. The industry is proving it now. We are token agnostic. We are getting GPU agnostic going forward. So, we don't care if it's NVIDIA or if it's TPU or it's in , right?

>> I was talking to Edward, a good friend of mine who stopped by theCUBE yesterday. Rebecca, you'd appreciate this. Most of the young generation that's coding the AI, they don't know what the physics about how machines work. They just think, give me more servers, give me more cores, or whatever. They don't know L1, L2, L3. I mean, they don't know the actual hardware. They've never loaded an OS on a server.

Rebecca Knight

>> material to them. Exactly.

>> But a lot of the design now on how to maximize performance, it's a lot of math around the physics, thermodynamics. So, there's a lot of stuff going on in the old data center world that's now creeping into the on-prem system design. So, there's actually a class going on called the Physics of Virtualization, which is kind of an oxymoron, but there's actually servers that run all this stuff. So, I mean, a whole another generation.

Rebecca Knight

>> Indeed, indeed. Then we can spend a whole show talking about Gen Z and Gen Alpha on the rise. But gentlemen, this has been really fun and really interesting talking about this keynote analysis. So, John Furrier, Sarbjeet Johal, thank you so much.

>> Thank you.

Rebecca Knight

>> I'm Rebecca Knight, stay tuned for more of theCUBE's live coverage of VMware Explore. You're watching theCUBE, the leader in enterprise tech news and analysis.