Chief Information Officers are on the front lines of digital transformation. Not only are CIOs responsible for managing change, but the role can affect both the internal organization and customers. On this episode, we explore these issues with Bask Iyer, the CIO of VMware.

Bask Iyer joined VMware in March 2015 and serves as the company’s Senior Vice President and Chief Information Officer. Iyer leads VMware’s global information and technology organization, a group that manages critical technology systems supporting the company’s worldwide business operations.

A respected industry veteran, Iyer brings more than 25 years of experience in executing and driving change in traditional Fortune 100 manufacturing companies and Silicon Valley-based high technology firms. Prior to joining VMware, Iyer served as senior vice president and chief information officer at Juniper Networks, where he was responsible for the company’s technology and business operations, which included critical services around business transformation, global business services, IT and real estate, and workplace services. Before joining Juniper Networks, he served as chief information officer at Honeywell, and chief information officer at GlaxoSmithKline Beecham for consumer healthcare research and development, where he was also the company’s e-commerce leader. Iyer holds a bachelor’s degree in mechanical engineering from Annamalai University in India and a master’s degree in computer science from Florida Institute of Technology.

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Digital Transformation and the CIO with Bask Iyer, CIO, VMware

Dion Hinchcliffe:

Hello and welcome to CXOTalk episode 185. My name is Dion Hinchcliffe, it's Tuesday August second and we have a great show for you. I'm a Chief Strategy Officer of Seven Summits a ZDNet contributor, and a host here on CXOTalk. And I'm very pleased to have a very special guest Bask Iyer, he is the CIO of VMware and we're here to talk about digital

transformation and the CIO. Welcome Bask.

Bask Iyer:

Thank you Dion, how are you.

Dion Hinchcliffe:

I'm doing very well. So we're excited to have you on the show and we know that you're a very experienced CIO and we want to kind of get your perspective on you know the hot topic of the day digital transformation. Talk about future of the CIO. I think you want to talk about things like Internet Of Things which is also very popular subject with me as well so I look forward to talking about that. So why don’t you give us a little bit of background and context and tell your story so that other folks watching know a little bit more about you.

Bask Iyer:

Sure about 30 years ago I was selling refrigerators and air conditioners in Bangalore and I thought Bangalore was a sleepy town that would go nowhere. So I left to learn about computers and came to the US about 30 years ago. Worked for a few years as an intern in Cape Canaveral and then spend a lot of my years and in the large companies, you know manufacturing, automation companies like Johnson & Johnson, GlaxoSmithKline. Then I did a lot longer stint in Honeywell. I was there for about 10 years as the General Manager roles and IT roles and went back and forth between CIO role and GM role. Then I ended up as a group CIO for Honeywell.

One of the things that I was always fascinated by was Silicon Valley. So I have come here on visits and about six years ago I had the bug to actually come and live in Silicon Valley of learn how Silicon Valley operates. So I did a stint with Juniper Networks as a CIO and for the last 6 quarters a year and a half I been in VMware as their CIO so my background is generally business and IT.

Dion Hinchcliffe:

Yeah that's quite a journey from Cape Canaveral to Honeywell to VMware. So tell us a little bit about VMware. You know I’m inside the technology business so I know who you guys are but I think most people aren't aware outside the technology world what VMware does, who you guys are, how big you are and where you sit in the industry.

Bask Iyer:

Yeah I think we got famous because we came up to this concept of virtualization and the VM in VMware stands for that. And if you recall in the late nineties we used to have so many machines, hardware machines. They heated it up all the data centers and we have thousands and thousands of them, and everybody wanted their own machines. So we ended up buying more and consuming energy etc.

But we found out that not all the computers were used 100% of time, so if you look at the CPUs and the utilization of the computers, they were not really used all the time. So the inventors in VMware came up with this concept of a software layer and abstracted this computer and make it look like a virtual computer for you. So the end users, you felt like you were getting it on a private server and I felt like I was getting my own private server and in reality we were just sharing that right.

So obviously the efficiencies that IT professionals like me got it was tremendous. You know, we could have one third of the computers we had before and still provide value that we did. Needless to say the energy utilization you can get and the amount of greenhouse gases etc., so the company took off like a rocket. Almost every data center that you have today would have VMware products.

The good and bad about it is our brand is so popular with virtualization software that sometimes people think that's the only thing we do. And for us for the last few years from virtualizing the computer to virtualizing the network because that's another area that's prime for opportunity and virtualizing storage. So we are now doing what we did on the CPU in the computer on network in storage. So there's a big wave of that coming and then we be branched out into virtualizing desktops and we branched out into mobile products. So you know motilities and use enterprise and it is going to grow, how do you make it secure, how do you make sure that it's manageable. So new products in those areas, but if your brand is so big it's something we're very proud of if the brand is that big, it’s the first thing people associate with virtualization.

Dion Hinchcliffe:

Yeah I know it's really hard to get permission to go into these new spaces and be recognized as a leader. I you know you guys are 6.6 billion in revenue and had 19,000 employees, you're responsible for service delivery to all of those folks plus a lot of customer facing technologies I’m sure. You know and so you just highlighted one of your biggest challenges which is a permission to grow. I mean you guys realize the economics in cloud right virtualization does that right. So that gave you permission to do a lot more, so what are your largest global challenges? You know in terms of most CIOs you’ve got the Millennials coming in, you’ve got consumerization. You know you’re probably having your own issues transitioning to the cloud, but what are you really facing?

Bask Iyer:

Yeah so as you said I run probably one of the largest private clouds in the world you know every bit of what VMware uses including all the R&D runs on our private cloud so we drink our own champagne if you will. We have challenging customers you know we are growing exponentially. The company is a pretty young company still, it looks like it's been there forever but we've gone from zero to six and a half and in record time and still growing. So with that the needs of the computing is exponential.

So the first thing is you want to make sure that the computers and the resources that we have are all functioning in a private cloud, so that's one. But this the second important thing is we perform a very important use. We are typical an enterprise company, most of our customers are CIOs like myself. They want to know how do you run VMware. So we are a big use case for you know drinking our own champagne if you will. So a lot of you know our IT time is spent talking to our external customers because they want to know how you run it. Don't tell me the book, don't tell me the theory, you tell me how you run SAP, how do you run Office 365 how do you run Workday, how do you go to SaaS. So I'm good portion of our time is spending on something on VMware, and VMware we are very proud of where we show people how we actually run there.

The third thing is mobility I think it's a very strong one for me. The challenge is I believe that we can talk more about it. Enterprise mobility has not really taken off. Compared to what is happening in consumer mobile, enterprise mobility is in it infancy right. So we we've done a lot of things to kind of fix that and still we have ways to go and it's pretty exciting. And the talent, talent is always a challenge. What do you do that attract Millennials and you know not all creative things come from you know Millennials; that's something the tech world believes. People like you know, the the silver haired gentleman like you and I can produce value as well so we cannot forget that, and then have a rich diversity of talent that we bring. How do

you do this when everybody else seems to want the same people.

Dion Hinchcliffe:

You said two very important things there and one is mobility. I very much see that there is virtually no parity between the consumer mobile world and enterprise mobile world and I have some theories about why that is. But what are you seeing in terms of what's holding enterprise mobility back? Why can't it achieve the same kind of effortless use and the same kind of value creation that we're seeing on the consumer side?

Bask Iyer:

I think it's a little bit of lack of leadership internal IT so I should take some responsibility and I think a lot of risk aversion. And we’ve gotten into this area of let's just outsource, let's just get it easy, let's just be brokers of information and not applying creativity to enterprise and thinking out of the box. So I think you know we need to put the creativity and technical talents back in. So look at the stats, the phone store I’ve heard anywhere from 5 million applications are available, and an android store has probably even more and you cannot be without some of the mobile apps that you have. You cannot leave your home without your Google maps or your Ways, and banking applications.

Dion Hinchcliffe:

Yeah we’ve lost our ability to navigate without our phones right.

Bask Iyer:

I can't find my local coffee shop without a map program. But then all of a sudden you come into the enterprise and people say well we have mobile, well what do you do with it. We do email and calendaring. Okay let me remind you in 1998 I think you gave Blackberries to everybody and we did an email and calendaring then.

Dion Hinchcliffe:

They were doing it back then absolutely almost 20 years ago.

Bask Iyer:

There’s a technology it’s like half of the world if you will, so all you're saying is now you're giving them an email and calendar access on your iPhone. And you're proud that it’s a mobile strategy. And people stop say, oh no, hang on there's an application we’ve got called Concur, which does expense reports. You can download the client, you can download the Salesforce client. You can download the Coop client. You can download the Ariba client. I'm looking and saying okay, again that's kind of laziness. You are kind of expecting the vendors to give you all this stuff, and by the way I now have 15 client apps and you know, if you have a phone you have to something make a decision on which client you have to delete to make room for the other one.

I end up deleting the enterprise client’s right. I cannot delete my google maps and I cannot delete my you know important banking stuff and so on, which again tells me that we're taking the easy way out. So on here's one problem statement for you. When I started this profession the way you did approval as a manager is your assistant will give you a manila folder and say there's purchase orders, travel expenses, account requests, salary increases. And you look through them and sign them and give the file back. How quaint but now what we have to do is…

Dion Hinchcliffe:

But that was a workflow designed around you right. Now we’re designing and shaping all of our behaviors across those 15 very different applications with very different user experiences right. If you ask me the root cause is that you know iOS and Android are really impressive accomplishments right. From big crime to super computer and an incredibly rich software development kit into this tiny little device that does so very much, but these platforms are not something our IT departments grew up with right. Our IT people have a lot of silver hair like you and me as we were mentioning. And so we don't know these technologies very well and developing the applications is something that we're still building up the capability. It takes us 10 years to really fully absorbed technology sometimes in IT so that's problem one. And two, what I hear from a lot of people is mobile device management platforms there's no standard, no leader and so the management tools we have for distributing the applications and creating internal app stores are still in their infancy so we're just really behind. What do you think about that?

Bask Iyer:

Well I kind of agree with infrastructure being in infancy but I think we're putting the cart before the horse. You know if you haven't a really good use case, we can overcome that so typically how we role MDM we tell people, must use MDM because it's secure okay.  So it's like a hammer that we throw on people and it goes only so far, especially in the days of bring your own devices where people are saying it's my phone. What do it get out of it, and what are you going to do with my children photos and my personal information and so on which is a valid question.

If I started my career again you can kind of say well you work for the company tough, and get used to it whether it’s your phone  or my phone, you will use you know what I tell you to do. Those days are gone, and you know again when you're competing for talent you know where is the carrot. You know you download your consumer apps and if you read through some

of the privacy statements it looks pretty scary, but you download it because you get value out of it right, you believe you’re getting something for that. So what will my trade get from an enterprise app.

So here's an example I give you, we created an approval application that we call VM Approve that VMware have, but all the approvals comes to one app. So now I go to one app it has notification and pushes me and said there are four things for you to be approved right, and I click and it’s an expense report application and then click and approve it and it works in the back end with Concur or whatever expense report system you have and APIs to improve it. Or you have a procurement application you click.  I'm not thinking about what the app is, I’m approving a purchase order, I'm approving an expensive report, I’m approving a head count, I'm approving an increase..

Dion Hinchcliffe:

You're thinking about the business and you’re  think about the user experience right.

Bask Iyer:

Exactly, the thing is I think we were initially all of us lazy in not thinking through, and lazy is probably too strong a term. Somehow mobile doesn't feel like a real application unless you put it on a big desktop and you have an ERP system in the back you don't feel like you've got your money's worth out of the CIO so we always tend to think about those.

Dion Hinchcliffe:

Well I have another related theory you know talking to a lot of CIOs over the years there's been a kind of this big backlash against customization. We learned that if you try to over customize these enterprise platforms and when the new version comes along we can't get it because we have to redo the customization. So there's been a big move to say we're going to adapt our businesses when it's not strategic, we're going to adapt our businesses to the software rather than the other way around it. And I think we took that lesson with us to mobile. We're not building the custom business apps that would really unleash value and productivity, what do you think about that.

Bask Iyer:

Yeah I totally agree I think this IT industry itself has flip-flopped several times right. When I started it they took the most technical guy and they promoted him to be the head of IT or CIO or whatever. And then they were surprised at this person, you know why is he a geek, why does he not communicate the right way, obviously not part of the business. So I suppose we should hire a business guy, a business guy who's had no understanding of technology. That went the other way on the pendulum. And what value are you adding to your customers if you don't have any clue or interest or passion on technology.

Now it's kind of a melding of those two. This debate about customizing, not customizing. I agree, certain things you don't want to customize your email application, but you need to go through a brain process to say, what are the differentiators that I have that I must customize and add value, and what are the table stakes that there's no point customizing right.

Information Technology I believe is the biggest differentiator, the biggest competitor that I have, so if you and I have the same competitive companies and you use email and I  use email, who's better?

Dion Hinchcliffe:

It’s not a differentiator right

Bask Iyer:

Yeah so it’s well okay you’ve got to a table stake, I’ve got a table stake. So I think we have to go through an IT process of these are five things I'm going to be better at than you. I am going to invest my people and time and creativity to differentiate and I think this permission to be different, permission to innovate, permission to create and develop we have lost that muscle. And I think in mobile especially we kind of think of it as a toy and and this is the computer.  The mobile is the computer for people so we have to start thinking completely differently now.

Dion Hinchcliffe:

Yeah I agree about that, so I think it sounds like your recommendation to other organizations is pick and choose your battles carefully and win the ones that will give you the differentiation that really matters is that right.

Bask Iyer:

Sure absolutely so that is part of the strategy, don't outsource everything. Outsource the ones that other people can do better at a lower cost. Don't delegate everything because then what is the value you bring to the table. So I think IT has to go through the process of critical ones and differentiators and non-differentiators and then put some resources and thought and effort into it otherwise you know what do you really bring to the table.

Dion Hinchcliffe:

So I think we put a good bow on mobile kind of capturing the state of the art there. so let’s move the conversation to the second thing that you brought up which I think is even more important is how do you realize, how do you activate on this. That requires people who you know understand the technology and today have soft skills like collaboration and communication and empathy for f user’s right. Those are the kinds of the words we’re using. How are you dealing with the issues of talent management which is you know, we know talent  is super scarce for Silicon Valley companies what are you facing today.

Bask Iyer:

Yeah so we compete with the best and most of them are in the cycling distance and more people can bicycle across to our competition and to go and everybody's looking for the same talent that we have. And companies are doing different things, that you have noticed people have the dry cleaning service and washing machine, and the best food and so on. All of that is you know somewhat important.

But what I find is with the differentiating we do and I give it as an open secret because I want people to copy it if they can. The days when I started working I used to work for you know anybody that you know gave you money and you work for people who are really bad managers but you felt like what didn’t kill you makes you stronger. So you work for the worst manager as possible they were ruthless whatever.

But what is happening now is the best talent want to work with managers. They want to work for good people, so maybe good people want to work for good people, so you must have good people, you must have values. I think company's value systems become very important. They have to have a goal that’s about we are taking the corner. So I've often told people that that you know, you need to have a mission that is above and beyond just creating a lot of money. Because it attracts a certain type of talent, but more often the wrong type of talent and honestly there's a lot of companies making enough money.

So having core values and then really talking about social cost and really trying to change the world through technology and then being an example for that. Being a good person and being a good leader in a good company. Sounds very old-fashioned but I find that a lot of people want to work there. I mean there are their managers I have who I call them Chi givers, energy givers. Come into work and you feel energized when you see them. And there are some people who take the energy out of you,  the chi sucker as you call them. So I think placing emphasis on creating an environment of where good talent is attractive is pretty important and that's our secret sauce I think.

Dion Hinchcliffe:

Yeah I would even argue that it really isn't that old fashioned. You talk to Millennials and you know that's going to be the biggest part of our workforce for the next couple years right and probably in your business right.

Bask Iyer:

I'm a millennial expert because I have two children who are millennials and the way they select companies is quite different than you know I would take a job that gave me a good salary and you know I can start on Monday whatever. Then they are asking a lot of questions they want to know what is the company really do, how it doesn't matter. What are you going to do different that's going to change the world? So I think that's very critical having a purpose

above and beyond you know and just making the corner

Dion Hinchcliffe:

And the Millennials, if you look at all the surveys the top among the biggest concerns is the ability to go to an organization where they can grow and develop, and do you see that and how do you provide that given that you know it only goes so high in IT before you know there's not that many jobs whereas on the business side there's so many more opportunities.

Bask Iyer:

I think we should challenge that. That's what we have done is first of all I told the folks that we all work for VMware to raise the share price of VMware, so don't put yourself into a box that says you’re support function. You can only go so far in IT and you're not allowed to dream and innovate. Only the product development folks are allowed to innovate and create. Just challenge them because nobody wants to go work for a place which says I just want to do my nothing job. I don't want to be creative or innovative or whatever

So the way we challenge them is to say yes there's a critical support function, your email network, everything has to work. So get it working, get it automated but then don't get stuck in that speed. You know that like the Maslow's law of hierarchy, if you only get a few things working. But you need to go beyond that. You need to think about what products to develop you know.

For example, I tell them you our customer number one, you are the people who use our products. So what is the point of view, where do you think these should be, how easy or difficult is it to create a public cloud? What do you think about the competition? What do you think about OpenStack? What do you think about VMware? So you know when you talk to business folks, now they come to our IT folks and ask them for use cases. When you guys, DevOps guys, would you guys like this product or not like the product.

We took two things that make it happen, and one is straining the back and making people confident to say you could dream and innovate and create, but also getting the operations in order. I mean you cannot really say you know, I'm too busy to run the email for you or too busy to run the network. So that's the combination we have to do.

The Millennials you know the thing we tell them is I think sometimes you get over rotated on millenniums. We say a very cool idea is when it comes from a millennial and not from the other folks. Surprisingly when we did workshop a lot of the enterprise use cases and ideas and stuff came from you know not millennials. It came from experienced professionals who having an inclination and readiness to mentor the millennials. So find those mentors and I actually have rewarded them, I actually I recognized them because they are the ones who make the millennials look good right. You know when you get out of college what do you really know? So you need to explain one of the enterprise use cases, developed them, guide them and show them how the back end and everything works and take pride in the success of your main keys…

Dion Hinchcliffe:

You know it shows again the strength of diversity right and it sounds like your vision of IT in terms of the talent is you want to create a very empowered workforce, but first make sure the lights are on right. Let’s take care of the basics but then people are empowered to innovate and push the envelope and come together. So it's very interesting what you just said about you know we see these groups come together in the ideas come from every direction and not just the newer younger people who are supposed to be chomping at the bit and this kind of takes it to that hot topic of the day which is digital transformation. If I understand you know what you were saying earlier on, you know you're drinking your own champagne, and a big part of digital transformation for you is to kind of transform into your own products and be using your products as much as possible. What else does it mean, what are your plans? Have you a kind of 18 months or two years list, where else you going to take VMware in digital transformation.

Bask Iyer:

So I’ll give you two examples and one is you know one is internal and one is external. So when I used to talk to other CEOs are CFO's, typically the conversation for a few years would have been, hey you know CIO, my IT group that it seems like a rattle. I don't know how much money you're spending these guys are spent a lot of money to buy a lot of cool things but I don't really know how to get stuff out of them. So you being a CIO for a long time what advice do I have?

So the question was about operations and how much money and so on. I think the CIO has gotten very good at managing on spending the money. Infact a lot of the CIOs you talk to they sound like CFOs,  they go over on the ROI and the finance part of it. So now it is you know the CEOs seem to come back and say, hey I got a great CIO, he can keep the trains running on time. He’s very good but what I'm worried about is it am I going to get uberized. Is somebody going to come back and do something and completely changed my business model. So you should I hire a digital guy, should I hire somebody else.

So there's a lot of talks about this and what that means is the CIO has not transitioned. I mean you've got to keep on changing; every year the stakes go up. The CIO is now the digital leader, so you have to be the head of the table and they won't give it to you. You have to earn your right slowly and you got to challenge the business model. You have to challenge, showcase for the changes that are happening. So that's something we do routinely, one way I could do is first again deliver value otherwise they'll send me back to fixing the network. And then once you do that you run the product, you know I have a good idea of what our products do. I probably know better than a lot of the folks who work VMware themselves across the valley of products.

I mean obviously they’re brilliant people in product development that's not what I'm

Saying, but I know how to operationalize and run it across the planet. I also know what products I will be buying if I'm not buying VMware. I'm the guy who writes purchase orders so I know how to sign an order purchased with VMware, how to execute an order. And so now you can translate all that as here's the typical customer thing. You know so you can transition, you transition ourselves as customer number one where the Senior Executives all the way from CTU tells people to say talk to this group and these guys are not going to buy this product versions there's a good chance nobody else is going to buy it outside.

Dion Hinchcliffe:

Yeah exactly, so if I could just pause you there just for a moment we're about halfway through episode 185 of CXOTalk. We're having a great conversation with the CIO Bask Iyer of VMware talking about digital transformation, talent, mobile, hopefully we'll get the Internet Of Things. We'd love to take your questions on Twitter the hashtag is cxotalk I will see that and I’ll be happy to pose your questions the Bask, so great conversation so far and it's been lovely talking with you. We were talking a little bit about digital transformation and it sounded like you were saying that the CIO should be leading the business from the front, explaining the art of the possible and guiding you know, having the true leadership of the business not just the technology did I understand you correctly.

Bask Iyer:

Absolutely because I think we made a mistake before and again in 2000 I was the digital leader for Honeywell. That's how I got hired into Honeywell. You know so digitization and Chief Digital Officers are not a new thing. We think its new things so if you go back and listen to Jack Welsh, he talked about the digitization of GE 1999, but the issue that we had is you can start dreaming about the new things. When you actually put it at scale it falls apart. So typically people come back and they dream big things, but execution is still people process technology. The best person in your function who has done this is the IT to CIO. You implement massive changes for 20-25 years sometimes, so why would you give up that space and not be the leader. That's the first thing is it's fun, you get a seat at the table and you should be dreaming, and who else can do that better than you. So someone people…

Dion Hinchcliffe:

But might not the Chief Digital Officer isn't he or she getting all the fun work now about you know reinventing the business for digital or the CMO is buying a lot of customer facing IT these days. Aren't they competing with the CIO?

Bask Iyer:

I don’t mean I read about it so as a practitioner I don't see it. First of all I'm a CMO and I are very close, we work together and she sees me as a valued contributor I certainly don't have the skills that she has. You know I can't even market one line or whatever but I have 25 years of implementing you know, 30 years of implementing systems and solutions. But the thing with the CIO you have to be open-minded. You know I compared it in writing as surfing the waves is you cannot rest on the laurels to say I've surfed you know these waves yesterday. You have to surf the wave in front of you right. So every day there's a new wave coming, so I am probably the world's leading authority on VACS, VMS and Fortran programming and so on, so what, how does the matter now.

So I think…

Dion Hinchcliffe:

I’ve forgotten all my Fortran unfortunately.

Bask Iyer:

Yeah we should go on a hackathon and see who’s better. I guarantee you I’m still good. But it doesn't matter. The thing is you got to be in a mindset to say change is good. You've gone into technology because you weren't interested in it, and you should have the mindset that says go with the change otherwise - and quite honestly in technology what I found is that  change agents are typically the guys who stop the change for the next wave. So the (dream-frame?) guys who look at it and when people like me got into the world they were the guys who almost killed me and said you know no amount of VACS, VMS, and Dec sound is going to work like a mainframe. You don't understand programming till you done so much of COBOL. You just sucked the energy out of me trying to challenge that right.

So the most mainframe folks did not get me midrange. Most midrange folks did not get PCs. Most PC guys did not get internet. Most internet guys not get more and been going on and on…

Dion Hinchcliffe:

Well that’s, I mean that's the issue, these days those that are illiterate can't unlearn and learn the new things right. I mean this is our this is our big challenge and I think that this is why companies are falling behind technology change. But you said something really important I want to highlight and it is about change agents. That's the conversation is happening more broadly. As you realize we can't wait for everyone to do this. You’ve got to find the people who are able to effectively deliver on change. Are you doing anything specific to cultivate change agents inside or outside the organization to kind of help you with your goals?

Bask Iyer:

Yeah absolutely it's a process. So what I look at it is typically people used to look for heroes; can you find me this one change agent you know, who is so super brilliant that he can lead the company and all will follow. That's not how real organizations work. We have 25,000 people and include all the contractors, suppliers and so on to work with. I had to let 2,000 people in my thing to work, so me being brilliant and coming at 6am and going home at 9pm is not going to move the needle for VMware there quite honestly. So what is going to move the needle is me kind of creating an environment where I have those 25,000 people kind of working and creating and creating the change together and not fighting against each other.

So I think that's the trick you learn, there are books written about it and so on but the practical stuff is you know, people like a common cost I mean that if the goal of my digitization is to make sure I'm a hero, my CMO is not going to support me. If I make the thing on we’ve got to change and we've going to get better than the competition it's the right thing for

VMware, 99 other people in the company want to do the right thing

for VMware. There will always perhaps be the 1%, I don't see them but if I see them they don’t last long enough in the company.

Dion Hinchcliffe:

Well I think there is a difference between change champions I think you're right, you know most of the people want to change, but when changing actually shows up a lot of people either don't want to do it in reality for a variety of this reasons or they can't. And so change agents are ones that are actually effective and so I think there’s a difference. But you know let's say you have change agents and be able to cultivate them, let's talk about practical realities. You once said something really important when I was researching this episode and that is you said that making sure you have a strong foundation at the back end of your IT is ready for this right and so we've heard all the conversations around containers and micro-services architectures, and this investment we should have been making for years. And Nordstrom has been you know the poster child for digital transformation because they spent all that time building a strong foundation. Now they can build all these great mobile apps and services. What is your experience there that sounds like you have real challenges in that space?

Bask Iyer:

Yeah, so everywhere I've gone to the most companies and I go into companies particularly when they say they want to scale, and you know we need somebody like you to come and help scale. When you look at what is really the root cause of scale is the foundation is weak right. What people end up doing is putting more and more clever cute little things on the front end because they don't have the time or the patience to go change the foundation. So let me just for another two years write something pretty on the front…

Dion Hinchcliffe:

Well it's too long a payoff to like everybody wants they want IT and ROI in one year, but to get that foundation it’s going to take you three, four?

Bask Iyer:

So it's like you know when you go to the doctor I want to lose weight, what do you want exercise? No. You want to eat right? No. Okay I want a pill, so I have two choices. I can either give you a pill otherwise you're not going to come back. So I think we’ve also trained the CIOs. I mean, if I talk about ERP and transformation and so how do you want to actually talk about this? Nobody wants to talk about it. The business doesn't want to talk about it, but in some state you have to and you know we always talk about how great Amazon is on the front end and I  can search for shoe and get it. But the beauty of Amazon is the fact that the shoe gets delivered on time and you can track it and you know it's what I…

Dion Hinchcliffe:

It’s the customer experience yeah, exactly.

Bask Iyer:

So if not who. Recommendation doesn't make any sense if I don't get the shoe delivered right. So in a lot of cases this is the hidden dark secret about IT is in VMware we went live with an ERP system  month back, I don't even talk about it unfortunately because people don't think of that as digital transformation. People say well what about cool things on mobile cool things on that. You can’t do the cool things if your foundation is weak.

So a lot of places we go one of ITs jobs is you're also like a doctor. You have to tell the patient you're sick and you need to depend upon medicine. Well you can just over rotate and say the only thing you're going to do is medicine. You need to balance that out to say I’m going to give you some candy, I’m going to save you some cool things but you know you must take this and you need to get the credibility to make the call. So if you ignore that and you say I’m just going to forget about everything else that is in the back end and I’m just going to do the cool things and get out, you end up in an even bigger mess. So I think this is pretty much the dark secret is you know a lot of companies that good CIOs go to do the transformation at the foundation level, and make sure you have proper networks. You know, you don't have to go really to put everything on a public cloud you know if your datacenter is reasonably operating. So you can give up on that. You can run a good private cloud and then make a choice on which one makes sense to be in the public cloud, what stuff should be staying in the private cloud and so on. But it requires some thinking and it's not an instantaneous answer like that right

Dion Hinchcliffe:

Well you brought up a really good point there and that is this whole debate about public cloud vs hybrid cloud and I've been making the argument that the transition to the hybrid cloud is going to take you so long and still going to leave you with having to solve the problems of going full public cloud why unless there is some burning issue why wouldn't you just move directly to public cloud first. That would give you a major competitive advantage over time and save you an entire major multi-year step in the process I wonder what you thought about that.

Bask Iyer:

So if you and I are a startup and we're thinking of an idea and we don't have time to worry about a datacenter server and so on, yeah put it on a public cloud right. See how far you go, you don't have to worry about scaling and if it sells well at Christmas you know good. Then we can think about forming a company. For startups that’s what I always advise and say. Yeah don't even think about it, it’s is a beautiful environment that you have.

But when you when you get to a certain kind of scale I believe you still have to think a little bit more thoughtful about what goes on a public what goes on a private cloud.  I mean look at the statistics. You know you should look at good SaaS applications that are available, you should try to put things on the public cloud where it makes sense, but completely abandoning it, I mean again we're looking for a secret pill. It's similar to what we talked about outsourcing. I don't know why you run this at all and just outside of the whole thing to somebody else..

Dion Hinchcliffe:

Something is stopping me, why wouldn't I  take the shortest most direct route to my goal. We know that if you look 15 years the road public cloud will be 95% of our IT you know, you can see all the all the graphs you know by 2017 the majority of IT will already public cloud -  the majority of corporate IT just barely, 51%  Unless there's some burning reason why can't we just go straight there I think that can give companies the ability to leapfrog.

Bask Iyer:

I think all I’m saying there's nothing wrong or right just be thoughtful about this,don't  take the easy way out. This thing has happened before their used to be companies called Application Service Providers. I moved a lot of my stuff from Honeywell into the Application Service…

Dion Hinchcliffe:

Yeah cloud 1.0 right.

Bask Iyer:

Yeah and they went out of business and was very painful to bring back. So I don't like to get into vendor law or dependent on somebody completely so be thoughtful about if you go to a public cloud, and you come back and you go to another public cloud you know, how easy it is have you actually…

Dion Hinchcliffe:

Yeah, until we can transparently move workloads between clouds, I mean but going all public forces you to confront that earlier instead of kicking that can down the road and kicking the can really hurts when it comes to digital transformation.

Bask Iyer:

Could be, all I'm saying is when you actually go to data base, you're going to look and say you're going to make decisions like email. Do I want to run it inside or outside, let's go out. Okay, that gives you some bandwidth to do something else. Then you say I’ll look at an application like salesforce dot com, do we wan to ride it or want to go online. So there's some good SaaS. (Fedora?) , do I want to run it do I want on to give it to somebody else so you can go through this.

I would just say you still have to go through what is critical for me and what is not critical for me. You have to go through the exercise, because if you don’t differentiate, all of us are running on salesforce, all of us are running on Office 365, all of us are running the same tools and so on whatever we’re differentiating.

The first dialogue we have on, I think thoughtfully  about what is critical infrastructure for you, where it should it be, and think beyond just putting it on one cloud provider.  Think a little bit of getting locked in and have the flexibility.

There are also studies to prove that if you have scale, and I run a public cloud internally and I put a public cloud internally and also put a lot in public (unclear 39:27). A lot of the public clouds are not necessarily matching your cost or flexibility that you want if you’re not running it well.

Dion Hinchcliffe:

It's all about control right at the end of the day.

Bask Iyer:

That’s right but even when we had everything in our own data center it was difficult to do integration. I mean there are software companies who say we’ll integrate across multiple clouds, it is not simple you know because we could not integrate applications that were sitting in my own data.

Dion Hinchcliffe:

It's the Holy Grail and really there's not a lot of incentives for providers to do that and I won’t put you on the spot and ask you what you guys are doing there. But I do want to you talk about another topic and we have about five minutes left in the show and one that I like to call it’s the cave painting days and it's going to be bigger than anything it's going to you know make our networks ten times, a hundred times bigger and it’s Internet Of Things. Everything in our businesses and our personal lives is about to get connected right. Every trivial object that I think at some point will be connected soon. What does that really mean? What are your thoughts on and how we're going to deal with the avalanche of data and compute power that we're going to need to deal with all this?

Bask Iyer:

Yeah so when I started my career,30 years ago we were thinking about automation robotics and we talked about all this in manufacturing. We used to our computer integrated manufacturing and I was one of those engineers. Then what happened is we said why are we deal with it. You know let's just move to China we’ll move somewhere else, we don't care about that part.

A couple of things that happens with that is then you spend a lot of time on supply chain you know in tracking containers and things across the board. And then what happens if you have to go to another country? I think some people are going to look back and say

we need to figure out how to make the things efficient and simply by supply chain and the cost of these robots and stuff have come down tremendously. So there will be a people really looking at the total cost and flexibility and the 3D printing, and robots that are coming up to say how do we do it effectively? That's one.

The second thing that you have is there's so much data in factory or in a device that people throw away because they don't know what to do with it…

Dion Hinchcliffe:

Well it’s the whole dark data problem. They either don't know they have it or they can't use it, they don’t have the bandwidth to consume the information out of it. Yeah it's a real big challenge

Bask Iyer:

So you you go to some pharmaceutical companies and sometimes the pills don't come out the right way and you asked him is all prescriptive recipe driven by manufacturing? So you want the right batch and you have a variance and why do you have this. And they will say something like you know, some days when it's foggy and when its rainy, or you know third day of the month or new moon or whatever we have this year. Which really means we don’t have to pay you to figure out what is causing that batch to be different than the other batch.

Now in order of things you can actually measure a lot more data points, so you can have a lot more scientific (unclear 42:25)  and then you don’t have to throw this data away. So I think you know when I started this gave me the responsibility again as a CIO being in the table and looking at the problem he says why are you look at this problem and tell us you know what VMware should do.

So initially my approach is what is so different about this, I've done this before. This is just the same old stuff coming along. But it is different fundamentally. Now there are a lot more elegant solutions, a lot better companies, a lot better sensors and being a lot more you can do on the internet and lot more on the analytics platform.

So what I tell the CIO is this is a big train. What I tell the CIOs are quite honestly if you're frank with each other we kind of missed the SaaS strength right. We found that people the CMOs and other people signed up with the SaaS then we try to say how do I get control of the shadow IT, which we created in a way. And then we kind of try to go back and say can I put some kind of solution to monitor how many cloud application I have.

Similar mobile, we were happy with the Blackberry applications until people started selling or I like to use my iPhone, or I use my android. We know that saying why should I worry about that. And then when people started bringing their own devices we kind of said well here’s an Air watch, my mobile device management solution that helps you which is fine.

What I'm telling CIOs now is get ahead of this one. This wave is coming. I don't know if it's coming in six months, if it's coming in a year, if it's coming in two years. This wave is coming, you have an opportunity to define the architecture and take a leadership position in this and be really valuable to the company. Or you’re going to get consumed by it and all of a sudden you're going to find out that your air conditioning machine is talking to the Internet, your robots are tied to the internet. You have no control over it and then it's going to affect your SAP system, your audit committee as and you can be ….

Dion Hinchcliffe:

I think that's going to be one of our big challenges is the sheer complexity and the combinatorics right. Now I only half-jokingly say the CIO 20 years from now will be artificial intelligence agent running things for the most part.

Bask Iyer:

Look forward to it, anything that will make me better and smarter I would put anything …

Dion Hinchcliffe:

You got it. Well great. Well thanks so much for taking time out of your busy day to come and talk to us at CXOTalk. And so thanks for joining u, I appreciate we had Bask Iyer CIO, of VMware sharing his thoughts on the future of IT, digital transformation and a whole bunch of other things. Thank you very much Bask.

Bask Iyer:

Thank you Dion.