Copyright 2013 VMware, Inc. All rights reserved. EMC & VMWARE STRATEGIC FORUM NEW YORK MARCH
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1 1 EMC & VMWARE STRATEGIC FORUM NEW YORK MARCH
2 2 Raghu Raghuram Executive Vice President, Cloud Infrastructure and Management VMware
3 3 This presentation contains forward-looking statements including, among other things, expectations regarding the evolution of corporate and enterprise IT, VMware s strategy and drivers for growth, potential business opportunities for VMware and the total addressable market for VMware products and services, and potential benefits, planned features and expected availability of VMware products and services including VMware NSX and vcloud Hybrid Services. These forwardlooking statements are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (i) adverse changes in general economic or market conditions; (ii) delays or reductions in consumer or information technology spending; (iii) competitive factors, including but not limited to pricing pressures, industry consolidation, entry of new competitors into the virtualization market, and new product and marketing initiatives by our competitors; (iv) our customers' ability to develop, and to transition to, new products and computing strategies such as cloud computing and desktop virtualization; (v) rapid technological and market changes in virtualization software and platforms for cloud and desktop computing; (vi) changes to product development timelines; (vii) our ability to protect proprietary technology; and (viii) our ability to attract and retain highly qualified employees. These forward looking statements are based on current expectations and are subject to uncertainties and changes in condition, significance, value and effect as well as other risks detailed in documents filed with the Securities and Exchange Commission, including our most recent reports on Form 10-K and Form 10-Q and current reports on Form 8-K that we may file from time to time, which could cause actual results to vary from expectations. The information in this presentation reflects management s views as of the date of the presentation. VMware assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release.
4 The Software-Defined Data Center
5 5 Software-Defined Data Center All infrastructure is virtualized and delivered as a service, and the control of this data center is entirely automated by software. Abstract Pool Automate
6 6 Windows Linux Databases Mission Critical HPC Big Data
7 7 Windows Linux Databases Mission Critical HPC Big Data Software-Defined Data Center VDC VDC VDC VDC VDC Software-Defined Data Center Services Abstract Pool Automate
8 8 Infrastructure for Traditional Apps Traditional Applications Infrastructure for Traditional Enterprise Apps Existing Application bound to vendor specific HW M 70% M Hardware-based Resiliency Hardware-based QOS Hard To automate Complex to scale
9 9 Infrastructure for New Apps Infrastructure for New/Cloud/Data Apps Application Specific Network and Storage Next Gen Cloud Applications M M 700% Software-based Infrastructure Transformational Economics Automation and Agility Designed For Scale
10 10 SDDC Delivers Single Architecture for New and Existing Apps Infrastructure for New/Cloud/Data Apps Application Specific Network and Storage Any Application Infrastructure for Existing Enterprise Apps Existing Application bound to vendor specific HW Any Hardware
11 All Infrastructure Copyright 2013 VMware, Inc. All rights reserved. 11 SDDC: The Strategy For Growth All Applications Traditional Applications Next Gen Cloud Applications M M 70% M M 700% Management and Automation Compute Virtualization Software Defined Storage Network Virtualization
12 12 SDDC: A Significant Opportunity for VMware 2016 Our Starting Point $28B VMW TAM 20%+ CAGR $6B Compute TAM Source: Analyst Data and VMware Internal Analysis, 1Q2013
13 Range of NPS 13 Our Starting Point: A Powerful Foundation Net Promoter Score 60 VMware 2012 NPS 40 VMW Today: ~36M VMs 480K Customers 20 0 Industry Average NPS GLOBAL Source: Analyst Data and VMware Internal Analysis, 1Q2013, Source of Benchmark data: Satmetrix 2011 Industry NPS study. Segment shown: B2B Computer Software (incl. Microsoft, Oracle, SAP)
14 Server Virtualization The Foundation for the Software-Defined Data Center
15 Server Virtualization Adoption on Path to 80% Over Next 5 Years Copyright 2013 VMware, Inc. All rights reserved. Millions 15 % Virtualized of x86 Workloads Total x86 Workloads 80% IDC 2012 to 2016 Change = +12 pts % 90% 40% Gartner 2012 to 2016 Change = +22 pts x86 % Physical Servers Unvirtualized IDC+ VMW Estimate: Workloads to 2016 CAGR = 21% 80% 70% 60% 50% 40% % 20% 10% 0% % Source(s): IDC: Annual Virtualization Forecast, Feb-13; Gartner: x86 Server Virtualization, Worldwide, 3Q12 Update; Gartner: Forecast x86 Server Virtualization, Worldwide, , Jul-11; VMware estimates, Note: Server workloads only 1 Installed Base totals assume 5-year refresh
16 16 Drivers for Growth of Core Server Virtualization Next Gen Cloud Applications Emerging Markets and New Customers Emerging Markets 2016 ized 42M M 105% (excluding North America & Western Europe) M M 700 % Traditional Applications New Workloads Unvirtualized Traditional Workloads M M 70% Telco HPC Embedded
17 Network Virtualization
18 18 The Network is a Barrier to Software-Defined Data Center Software Defined Data Center VDC SOFTWARE-DEFINED DATACENTER SERVICES Provisioning is slow Placement and Mobility are limited Hardware dependent services Operationally intensive Compute Virtualization Abstraction Layer Physical Infrastructure
19 19 The Solution: Transform the Network with Virtualization Software-Defined Data Center VDC SOFTWARE-DEFINED DATACENTER SERVICES Programmatic provisioning Run any workload anywhere Decouple services from hardware Operationally efficient Network Virtualization Abstraction Layer Compute Virtualization Abstraction Layer Physical Infrastructure
20 Ports in Millions Copyright 2013 VMware, Inc. All rights reserved. 20 The Starting Point For Network Virtualization: Virtual Switch Virtual Switch Ports 32% CAGR HALF of all server access ports are already virtual and are on track be ~67% of all ports in 2 years 20 Physical Server Access Ports ~40% of virtualization admins also manage virtual switching Source: CREHAN RESEARCH Inc. and VMware Estimates, March 2013
21 21 VMware: Two Most Deployed Network Virtualization Stacks VMware Openstack VCD VCNS vsphere Openstack NVP KVM/Xen Hardware and Location Independent
22 22 Introducing VMware NSX VMware OpenStack Multi Cloud Management Platform VMware NSX Multi - Hypervisor Physical Hardware and Location Independent LAN/WAN L4-7
23 23 Early Adopters Transforming Operations with VMware Speed 7 Days to 60 Seconds Transformed the time it takes to deploy complex test and development environments. Cost 60% to 90% Asset Utilization Delivered enterprise-class private networking in a public, multi-tenant cloud.
24 Storage
25 25 The Challenges in Storage Infrastructure Software Defined Data Center VDC SOFTWARE-DEFINED DATACENTER SERVICES Provisioning is slow and operationally Intensive Continue to drive down TCO Not suited for new app types Compute Virtualization Abstraction Layer Physical Infrastructure
26 26 The Solution Software Defined Storage Software Defined Data Center VDC SOFTWARE-DEFINED DATACENTER SERVICES Abstract from hardware Pool local and external storage Automate provisioning Support new apps Software Defined Storage Compute Virtualization Abstraction Layer Physical Infrastructure
27 27 vvols VIRTUAL FLASH Virtual SAN Pool and abstract local and external storage Automate through software-based policy for all apps VIRTUAL Volumes The Road to Software Defined Storage
28 Management
29 29 New Approach to Management Traditional IT Management Cloud Management Health Risk Efficiency Manager of Managers CMDB Cloud Infrastructure Rigid. Complex. Fragile Agile, Scalable, Simple
30 30 Vision: Simplify, Automate, and Govern Across Multiple Platforms and Providers Cloud Service Provisioning vcloud Automation Center vfabric Application Director Broker of IT Services Cloud Operations Management vcenter Operations Management Suite Cloud Business Management VMware IT Business Management Suite Strong growth in license bookings now 10% of bookings Customer base increased by ~200% Significant opportunity ahead Single digit penetration into installed base Portfolio expansion doubles market
31 31 Customer Value Propositions Cloud Service Provisioning vcloud Automation Center Cloud Operations Management vcenter Operations Management Cloud Business Management vcloud ITBM Reduced provisioning from days to minutes Solution extended throughout NewsCorp Managing over 10K VMs Reduced daily alerts 10x Found 92% VMs over-prov., reclaimed 1000 VMs 6% reduction in unit costs through Unit Cost Analysis $20M in annual cost savings
32 Packaging and GTM
33 33 From Virtualization to SDDC vcloud Suite SDDC Virtual Operations Management Software Defined Storage and Availability Virtual Networking and Security Cloud Service Provisioning Transactional Journey
34 34 Driving the Transactional Business vsphere w/ Operations Mgmt: Managed Virtualization VDP-Advanced: Backup for Mid-sized Deployments From Powered by VDP/VDPA VMware vsphere Data Deduplicated USD $1745- $4245 per CPU USD $1095 per CPU
35 35 The vcloud Suite MANAGEMENT VMware vcloud Automation Center CLOUD INFRASTRUCTURE Virtual Networking and Security VMware vcloud Director Software-Defined Storage and Availability EXTENSIBILITY VMware vcloud APIs VMware vcenter Operations Management Suite VMware vcloud Networking & Security VMware vcenter Site Recovery Manager VMware vcloud Connector VMware vfabric Application Director VIRTUALIZATION VMware vsphere VMware vcenter Orchestrator Physical Infrastructure (Server, Storage, Network)
36 36 All vcloud Suite Editions Deliver ~4x ROI Cumulative Over 5 years 0.6 years 0.6 years 0.6 years Payback SOURCE: roitco.vmware.com
37 37 Summary SDDC: The infrastructure for the cloud. Server virtualization: Foundation for the SDDC Introducing VMware NSX VMware uniquely positioned to deliver the SDDC
38 38 EMC & VMWARE STRATEGIC FORUM NEW YORK MARCH
39 1 Carl Eschenbach President and COO VMware
40 2 This presentation contains forward-looking statements including, among other things, planned features and expected availability of VMware products and services and the expected benefits to customers and partners, including vcloud Hybrid Services, potential business opportunities for VMware and the total addressable market for VMware products and services and our continued investment in service providers. These forward-looking statements are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (i) adverse changes in general economic or market conditions; (ii) delays or reductions in consumer or information technology spending; (iii) competitive factors, including but not limited to pricing pressures, industry consolidation, entry of new competitors into the virtualization market, and new product and marketing initiatives by our competitors; (iv) our customers' ability to develop, and to transition to, new products and computing strategies such as cloud computing and desktop virtualization; (v) rapid technological and market changes in virtualization software and platforms for cloud and desktop computing; (vi) changes to product development timelines; (vii) our ability to protect proprietary technology; and (viii) our ability to attract and retain highly qualified employees. These forward looking statements are based on current expectations and are subject to uncertainties and changes in condition, significance, value and effect as well as other risks detailed in documents filed with the Securities and Exchange Commission, including our most recent reports on Form 10-K and Form 10-Q and current reports on Form 8-K that we may file from time to time, which could cause actual results to vary from expectations. The information in this presentation reflects management s views as of the date of the presentation. VMware assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release.
41 VMware Hybrid Cloud Service Offering VMware Brand and Operated Mid 13 Launch Hybrid Services Partners Public Agility vcloud Hybrid Service VSPP
42 4 VMware s New vcloud Hybrid Service WHAT: vcloud Hybrid Service WHY: Customers: Support traditional & NextGen applications Partners: Capitalize on public cloud opportunity VMware: Extend success of private cloud to hybrid cloud SIZE OF OPPORTUNITY: $14B by 2016 VMware uniquely positioned to be the trusted cloud provider Source: Analyst Data and VMware Internal Analysis, 1Q2013
43 5 Bridging the Gap Between the Business and IT Line of Business Requires speed, agility and the ability to innovate IT Team Focused on maintaining reliable, secure infrastructure Two Key Challenges: 1. Growing chasm between Business and IT due to lack of agility 2. Lack of trust for business-critical workloads in the public cloud The Solution: Common platform that spans private and public cloud, linking them together seamlessly VMware & Our Partners Bridge the Gap Accelerating the adoption of cloud across IT and the Business in a coordinated approach
44 6 Mutual Benefits, Common Goal Line of Business Build Once, Deploy Anywhere IT Operations Deploy Anywhere, Manage Once Common Toolset Common Skillsets Common Processes
45 7 Extending the Private Cloud to the Hybrid Cloud Private Cloud Common Management & Orchestration Platform Unified Network Seamless Architecture Extension of the Data Center Common Security Model Public Cloud Software-Defined Data Center One Support Call Any Application, Any Place No Changes Software-Defined Data Center
46 8 Our Cloud Opportunity Our Starting Point The TAM VMW Today: ~36M VMs 480K Customers Expanding our Share of Hybrid Cloud Opportunity Source: Analyst Data and VMware Internal Analysis, 1Q2013
47 9 A Significant Opportunity for VMware Future Opportunity The TAM Expanding Relevance with Customers Grow Our Share Source: Analyst Data and VMware Internal Analysis, 1Q2013
48 10 vcloud Hybrid Service GTM Partner-Centric from the Outset Partners Private VMware Salesforce Hybrid From Selling Private Cloud To Selling Hybrid Cloud Same GTM model Standard VMware vcloud Hybrid Service SKU High value services opportunity for partners
49 11 Partners Increase Reach, While Maintaining Relationship vcloud Hybrid Service Bill Partners Bill Customer We are trying to build that recurring revenue stream and this fits right into that strategy Great timing we don t want to host this kind of infrastructure service but we do want to offer managed services on top of it This strengthens our portfolio considerably our emphasis has been consulting, consulting, consulting this enables our focus on managed services This will fix a lot of customers issues we love that you will deliver most of that fixing through a partner
50 12 Continued Investment in Service Providers and VSPP 87% Growth 26 Countries 220 Public Clouds Customer Management Software Reference Architecture Operations IP vcloud Suite vcloud Hybrid Service IP for Service Providers
51 13 Optimizing VMware s Strong Ecosystem with Cloud Credits 55,000 VMware Partners Worldwide Reseller Partners SP Partners Cloud Credits
52 14 VMware s Hybrid Cloud Services Business Unit Pleased to Introduce: Bill Fathers, SVP and GM of VMware s Hybrid Cloud Services Business Unit Right Team, Right Time
53 15 Introducing VMware s New vcloud Hybrid Service WHAT: vcloud Hybrid Service WHY: Customers: Support traditional & NextGen applications Partners: Capitalize on public cloud opportunity VMware: Extend success of private cloud to hybrid cloud SIZE OF OPPORTUNITY: $14B by 2016 VMware uniquely positioned to be the trusted cloud provider Source: Analyst Data and VMware Internal Analysis, 1Q2013
54 16 Thank You
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