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VMware CEO Pat Gelsinger: Hybrid Cloud Is The Future, And VMware's Success Is Proof

Gelsinger, in an appearance on CNBC's Squawk Alley, said VMware's 4,000-plus cloud partnerships, including that of Amazon Web Services, show his company's long-term commitment to be a key part of the coming decades-long push to build a hybrid cloud world.

VMware CEO Pat Gelsinger took to the airwaves to make his case that the IT business is moving toward a hybrid world that seamlessly combines on-premises architecture and the public cloud.

Gelsinger on Friday appeared on CNBC's Squawk Alley program a day after his company reported a hugely successful third fiscal quarter of 2019 that depended on large part on the growth of hybrid clouds for that success.

Gelsinger's appearance alongside Jon Fortt, co-anchor of Squawk Alley, also came just two days after VMware unveiled VMware Cloud on AWS Outposts at the AWS re:Invent conference in Las Vegas.

[Related: VMware CEO Gelsinger: 3Q Growth Highlights Impact Of Hybrid Cloud Investments, AWS Partnership]

VMware Cloud on AWS Outposts is a new version of VMware's software-defined data center software specifically designed to use on Amazon Web Services' new AWS Outposts infrastructure that brings AWS-designed hardware to customers' on-premises data centers.

Fortt opened the conversation by noting that hybrid cloud now accounts for more than 10 percent of VMware revenue, and that that part of the company's business grew 35 percent.

He then asked Gelsinger what advantage VMware may have received from, as he put it, telling the hybrid cloud story earlier than many other companies.

Gelsinger said VMware is focused on a hybrid-cloud future.

"There are just workloads, whether it’s latency-driven, whether it's cost-driven, governance, that are going to remain on-premise," he said. "And the right answer for customers, not just in the near-term but in the long-term, is hybrid cloud, bringing the best of private and public [clouds] together in a seamless environment."

VMware has been on the hybrid cloud journey for a number of years, and has over 4,000 partners, including Amazon and IBM, Gelsinger said.

Gelsinger said the big partnership news for VMware during AWS re:Invent was his coming together with AWS CEO Andy Jassy to introduce VMware Cloud on AWS Outposts.

"This idea of Amazon now having the same hardware, the same operational model, on premise with the VMware software gives us yet another position of strength in our hybrid cloud strategy overall," he said. "[At AWS re:Invent,] the momentum of the Amazon-VMware partnership really was evident everywhere you were."

Fortt said that Amazon used to say that brick-and-mortar is dead, and that customers should stop buying server hardware, and he said the IT industry as a whole has been thinking about hybrid cloud as just a step towards cloud for customers not ready to fully embrace the new business model.

However, he said, the narrative about hybrid clouds appears to be shifting as shown by VMware's fast growth in this market, which led him to ask Gelsinger if the hybrid cloud is a permanent part of the cloud story with the ability to grow for as long as the cloud business grows in general.

Gelsinger said he really does believe in the long-term future of the hybrid cloud because of what he calls the "three laws."

"The laws of physics," he said. "You know, it just takes time to get there and back. If you have low-latency workloads, they must be near to where the data and the operations are. The laws of economics. There's just costs associated with going back and forth, and often you'll have the need economically to be closer to where the data or the usage is. And finally, the laws of the land, where certain geographies, certain countries demand things to be closer or domicile in a certain way."

New areas of IT, including edge computing and IoT, are going to significantly increase the amount of data at the edge, making the idea of the hybrid world one that will stretch decades into the future, Gelsinger said.

"That's why we've said it's not a way station to the future," he said. "It is the future. And as now you've seen major announcements by essentially everyone of the cloud partners, and now many of them [are] our partners. And with VMware and Amazon taking this very strong position this week with [Amazon's] Outposts announcement, I think everybody is now seeing [that] it's a hybrid world into the future. And VMware is uniquely positioned in the industry now to enable that for our customers at scale."

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