VMware Acquisition Close: Q&A with Sanjay Uppal, VP & GM, Software-Defined Edge Division – Six Five Insider

By Patrick Moorhead - November 22, 2023

On this episode of The Six Five – Insider Edition, hosts Daniel Newman and Patrick Moorhead welcome Broadcom’s Sanjay Uppal, VP & GM, Software-Defined Edge Division, for an inside look at how the now combined Broadcom and VMware are approaching opportunities at the edge.

Their discussion covers:

  • Why a software-defined edge approach will enable the combined Broadcom and VMware to win going forward
  • How is software-defined edge technology changing what customers can do at the edge
  • How do the combined Broadcom and VMware think about the need for infrastructure, orchestration, and programmability at the edge
  • Why scalability and flexibility impacts the design of software-defined edge solutions

You can watch the full video here:

Or Listen to the full audio here:

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Transcript:

Patrick Moorhead: The Six Five is live at Broadcom headquarters in San Jose, California. It is deal day between Broadcom and VMware. The deal is done. It’s an historic day. And Dan, I’m just excited to bring all the action to The Six Five audience. We’re talking to the senior leadership team. We’re talking strategy, we’re talking products and everything pretty much in between.

Daniel Newman: Yeah. The Six Five was really born on the idea of going a little bit deeper. So we are here, we are on the ground to have these conversations, to really pull the insights, to do the analysis. A deal like this has left you and I busy for more than 18 months following its progression. We’ve had multiple conversations with the president and CEO Hock Tan, but we’ve spoken across the industry given our opinions, and now it’s time for the leadership and the new leadership that’s going to be part of this combined Broadcom VMware to start telling their story and glad we’re here.

Patrick Moorhead: That’s right. It’s time to talk about the Edge. And it’s amazing the amount of action that’s happening on the Edge. And if you look back in history, Dan, if you can manage everything on the Edge, if you can process the data, aggregate it at the right time, in the right place, a lot of magic happens. And the Edge is going to be a huge part of the go forward strategy between Broadcom and VMware. And with that, I’d like to introduce Sanjay, a leader of the Edge at the new company. Great to see you and welcome to The Six Five.

Sanjay Uppal: Thank you. Thank you so much Patrick and Dan. It’s very exciting to be here.

Patrick Moorhead: Yeah, it’s big day.

Sanjay Uppal: Yep.

Daniel Newman: Sanjay, thanks for joining us. I’d love to start off talking a little bit about the opportunity at the Edge for the newly combined Broadcom and VMware. You’re going to be leading this group, I’m sure you have some ideas of how the business needs to grow, how it needs to change, how the combination brings you new opportunities to innovate. So just give us a little bit of the status where the Edge business sits today and how you see this deal shaping things as we go forward.

Sanjay Uppal: Yeah. I think one of the first things of relevance is that workloads are growing fastest at the Edge. Now, of course, they’re starting off from a small base, but just like what we did in the software defined data center, if the workloads are really migrating to the Edge, you need digital infrastructure that will support those workloads. So the exciting part is that there’s a diversity in what we call the Edge. It’s not just one Edge, it is everything from telecom to manufacturing to healthcare to oil and gas. And then when that happens, all that diversity gives us an opportunity and it’s the opportunity that I’m so excited about. Lots of excitement with a little bit of nervousness to go.

Patrick Moorhead: No, that’s great. And always been a big proponent of the Edge, not the nervousness, right? That’s great. But the Edge-

Daniel Newman: It means you care.

Patrick Moorhead: Yeah.

Daniel Newman: It means you care.

Patrick Moorhead: And like I said, if you can manage it, it’s the right place to do this. And as we’ve seen, the performance per watt and the storage, the ability of the Edge, and right now, most video inference for commercial applications is done on the Edge and it just makes sense. You don’t have to ship all that data up there. And there’s even a lot of talk about how do we do some even training on the Edge when it comes to AI. But I’m going to ask you just a very point-blank question, and that is, why will the combined companies and the strategy that you’re laying out, how does it position you to win out there in the marketplace? There’s a lot of players out there doing the Edge.

Sanjay Uppal: Yeah. So I think it’s less about combining specific hardware and software. In fact, all the software infrastructure that we build should run on the widest diversity of hardware. So really, the combination, what it brings is the efficiency in execution. That’s what we are so excited about and that’s what I’m excited about. So the execution efficiency should allow us to get to a much wider set of customers across strategics as well as the smaller customers and allow them to deploy these new workloads. As you were pointing out, video inferencing, computer vision is one class, aggregation of very large streams of data is another class. And if we can get out there and efficiently solve those problems for those new workloads, then we would’ve won.

Daniel Newman: So let’s talk a little bit about the customers and the success stories. I’d like to think about how this whole software Edge combination is really going to enable VMware to see its next wave of growth. You mentioned something where it’s growing fastest and in my opinion, that is exactly where an opportunity lies to see this particular business unit grow at scale. But I think with all of this proliferation at the Edge, there’s also a lot of complexity, a lot of unknowns, a lot of companies trying to figure it out, like AI. And so in fact, even the opportunity of AI at the Edge. So talk a little bit about how all this growth and proliferation creates an opportunity and what you’re hearing in terms of what your customers are saying about that.

Sanjay Uppal: Yeah. So there is a lot of complexity at the Edge, and it’s our responsibility to make sure that we come in with a simple way of operations. Now, you pointed out AI. So in 2022, only 5% of the applications at the Edge had any machine learning to do. In 2026, that’s going to grow up by a factor of 10. A factor of 10. That’s huge. And the reason that that is happening is because of the kinds of applications that we’ve been talking about. So there’s large streams of data being aggregated. So if you’re looking at a telecom cell site, there’s a very large stream of data coming in. You’re looking at a manufacturing floor, oil and gas, all of these are examples at the Edge. So if you have large streams of data coming in, you cannot afford to store them. You have to make use of them ephemerally, make a decision, and then move on. Computer vision is another example. So this complexity requires us to come with a simplified way of operations, and it’s that simplified way of operations we encapsulate in saying software defined Edge, just like software defined data center. But now, you could say, well wait a minute, “Why can’t you just take software defined data center and just plug it onto the Edge?” It doesn’t work that way. There’s a lot of difference between what happens in the STDC versus what we’re seeing in the SDE. So we’re crafting our product roadmap and our innovations and our strategy to go after winning with SDE with a different set of characteristics and constraints that we are finding in a lot of places across a large number of verticals.

Daniel Newman: Can you share a little more? And by the way, everyone, the SDDC, SDE software defined data center and software defined Edge, only in case. We love as analysts, love acronyms.

Patrick Moorhead: Some acronyms.

Daniel Newman: And executives love acronyms. But for everyone out there, you’re moving quick. And you mentioned there are some really striking or significant differences. I suspect I think I know what a few are, but I’d love to hear kind of how you address that and then some of the use cases that that enables, because I think otherwise, people do conflate what can be done in the data center, what can be done at the Edge. Just because the storage network compute, it doesn’t mean that it’s going to work exactly the same way.

Sanjay Uppal: Right. So the first thing is that one has to realize that in data centers, you’re talking about large infrastructure installed in a small number of places. It’s the exact opposite at the Edge. At the Edge, you’re talking about very small infrastructure deployed over a very large number of locations. Those numbers of locations could be thousands, tens of thousands, hundreds of thousands, or in some cases even in the millions. So when you’re looking at that, you cannot afford to put a large stack. So the first thing we need to do is to rightsize the infrastructure, and I call it honey, I shrunk the stack. So if you’re able to shrink that stack and put it in a large number of locations, you solve problem number one. The second problem is because of diversity, you have no centralized control. You can’t at one place, sit over there and say, I’m going to roll out this infrastructure to 10,000 locations and then keep them all updated. It has to be done a lot more autonomically, meaning that every Edge wakes up and says, do I need to be updated today? What is my update? And then figure it out and then download it and get it installed. And the third thing, extremely important when you’re talking about the Edge, there always is a wide area network to connect to because the Edges are all distributed. When you talk about the network, there’s always an operator, telecom operator, communication service provider with a variety of networks that are involved. If we can program the network in the context of the application, then we’ve won. So there’s really three things, large numbers of locations. Secondly, you have a pull based way of getting things done. And third thing, if you can program the network and those three attributes are what we are putting into our software defined Edge.

Patrick Moorhead: Yeah. I like to think of the diversity in infrastructure. You can go from a for you rack in a software divine data center to a large Edge. A large retailer does have raised floor and does have racks to a server that doesn’t have a fan that’s nailed to the wall in a drive-through or in an elevator to a sensor system that’s sitting on top of a traffic light, that is the Edge and everything in between. And I’m so glad, I love the honey, I shrunk the stack. It’s perfect because that was the big delineation and quite frankly, why a lot of other companies got their hands into that, just off that. But it’s much more complex and it’s about delivering value. And as more and more of these applications are moved to the Edge, how should customers be thinking about the management, the deployment, the security? How do you know what should I be running in the SDDC and what should I be running on the Edge?

Sanjay Uppal: I think you nailed it, Patrick. In terms of management, this is absolutely critical because it’s one thing to get digital infrastructure in thousands or tens of thousands of locations. But then how do you manage it? How do you do day one, day two and beyond operations? So it really requires a democratic infrastructure, meaning that it’s not centrally controlled. It has to be controlled by distribution, it has to be pull based, it has to be thin enough that it can actually deploy and then it’s got to accommodate for diversity. Everything from a cell site to a manufacturing floor. You pointed out all the different kinds of footprints you could have. At the side of a machine that is running on the factory floor. You can stick one of these new sensors, just simply from the vibration and the temperature, you can tell when that machine is going to fail and when it’s close to failure, you better act on it really soon. So latency is a critical attribute that one has to think of when one thinks of management. So real-time control is part and parcel of the management of these Edge systems. Now security has to be done in a way that it is simply zero trust. You cannot trust some of these devices out there. In fact, one of our customers, they own gas stations in Northern Africa, they said, anyone could come in, do anything in those gas stations. You have to make sure if that happens, that the integrity of the network is not compromised. So zero trust is the edifice on which we build the software-defined Edge. And when you look at that management security scale, these three attributes have to be taken into account in terms of architecting what we need to get done in the future.

Patrick Moorhead: Yeah, some people do a double take. When you think about somebody could walk into this fast food store and pick up that pedestal server or the one that’s screwed to the wall and walk out with it and the thought of how can I secure that asset if it’s literally sitting in some nefarious group’s lab or something like that. It really gets you to think as opposed to the SDDC that has palm security and multi-factor biometric security, it’s a very different situation. So yeah, enabling the management of it and the security, the provisioning, and even something we didn’t have, which was updating, right? Updating that software. But I think zero trust in a way on the security part hits all those. You basically trust nothing unless it’s signed and approved.

Sanjay Uppal: Yeah. And no one’s going to put the software-defined data center in their pocket and walk away, as you said, but someone could do with one of these Edges. So way around of course, is to make sure that you have really close GPS enabled so that you can tell when it’s far away from where it’s supposed to be. And these are the kinds of things that we can do at the Edge. So we’re basically living at the edge.

Patrick Moorhead: Right. Exactly.

Daniel Newman: When we are able to put the Edge data centers in our pocket, software defined edge data centers in our pocket, we will reach the air of honey, we in fact did shrink the Edge data center and it will be coming to a drive-through near you.

Patrick Moorhead: There we go.

Daniel Newman: I was dying to find a way to get that into this story. So let’s end a little bit with scale and the overall proliferation, how you think about. So we’ve talked a lot about security, we’ve talked about AI, we’ve talked about these large data use cases and all of these things are driving rapid, exponential growth of Edge data center, Edge infrastructure, all that. How do you think about flexibility and scalability with the growth being so fast and what kind of opportunity do you see that providing for you and the business unit you’re going to be leading at VMware?

Sanjay Uppal: Yeah. So what we really started off with in terms of a building block was the experience that we had in rolling out SD WANs. And we have more than 600,000 of these rolled out in the same kind of architecture that we’ve talked about. But that’s a networking service. When you have a compute service, it brings additional layer of complexity. Now that compute service, what we did was we rolled it out into thousands of locations for cell sites for telecom. Now you might think, wait a minute, cell site for a telecom, what’s that got to do with the manufacturing floor? But the commonality is this digital infrastructure and we have that experience under our belt now. DISH, which is the fourth operator here, we’ve rolled out more than 15,000 cell sites with exactly the same infrastructure that we believe will be used for oil and gas, for the power industry, for manufacturing. And it is that experience that has given us the confidence that we think that software-defined Edge, once it starts taking off in a number of verticals, we’re going to climb that hockey stick, that curve.

Patrick Moorhead: Well, with scalability, you require even the flexibility of almost any type of hardware platform as well. And I can imagine that’s a major investment, but also, a major value and a requirement for scale. Because the last thing some of these folks want to be dictated to is what hardware they have to run.

Sanjay Uppal: Exactly.

Patrick Moorhead: Right? And particularly, we’re getting into a world where… There are MNC hardware providers, but there’s a lot of local heroes out there. And being as compatible with security as possible is really the only way to get to scale and have your cake and eat it too, like we saw in the SDDC with VCF, doing that in a, I hate to say single pane of glass, less panes of glass, but in a similar fashion really seems like a little bit of Nirvana because the Edge has been the wild west. There really has been very little that you could rely on and everything was bespoke. And quite frankly, I think it was one of the big reasons that when it comes to… Again, I hate to throw out another Web 4.0 or transportation, next generation warehousing or manufacturing and autonomy, it’s, the reason it’s taken so long is the lack of consistency, lack of standards. So I’m really excited to see what you can do to not only move the cause for Broadcom, but move the cause ahead for all of businesses as a whole. Because quite frankly, that’s part of our problem. And the problem is us, the tech industry at this point.

Sanjay Uppal: No, I agree, and I look at this as in the shape of an hourglass, meaning, that you have to have the widest set of workloads and applications. You’ve got to run them on infrastructure that is consistent, that is simplified, but then you’ve got to have the diversity of all of the hardware. You cannot dictate to the end customer that you have to buy this specific piece of hardware or this gear as you were pointing out. And it’s this complication of getting this hourglass to work correctly for the variety of hardware, for the variety of workloads that’s going to be the proof point whether we’ve succeeded or failed. Of course, we plan to succeed.

Patrick Moorhead: Exactly.

Daniel Newman: Sanjay, I want to thank you so much for joining us here today on Deal Day to talk to Patrick and myself about the Edge and what you’re planning to do. And I’m sure we would both agree that we look forward to hearing more, seeing more, because we’re going to be opining all about it. So it’s great to have access to you. But thanks for joining us today. Congratulations on getting the deal done and the role in the new Broadcom and VMware combination.

Sanjay Uppal: Thank you very much Patrick and Dan, great chatting with you and see you in what? A years time?

Patrick Moorhead: Hopefully soon.

Daniel Newman: Yeah.

Patrick Moorhead: Hopefully soon.

Daniel Newman: Maybe in Barcelona.

Sanjay Uppal: Okay.

Patrick Moorhead: Exactly. Thanks.

Daniel Newman: All right everybody. You heard it here we are here on Deal Day at Broadcom headquarters. The deal is done. Broadcom and VMware’s tie-up. 18 months, Pat, we’ve been covering this multiple conversations across the executive teams. People have been wondering, but we said it. We said it. What happened?

Patrick Moorhead: We called it. We called it. And let’s do our little victory lap there. Okay, we’re done.

Daniel Newman: One more time.

Patrick Moorhead: There we go.

Daniel Newman: One more time.

Patrick Moorhead: There we go, Dan.

Daniel Newman: All right everyone. But hit that subscribe button, watch all of the episodes here from Deal Day coverage. And of course, we’d love for you to watch all the episodes here on The Six Five. But for Patrick and myself, we got to go. See you all later.

Patrick Moorhead
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Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.