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February 29, 2024
A Self Aware, Self Healing HCI Alternative to VMware with Scale Computing | Episode #79
Join us in Episode 79 of Great Things with Great Tech, featuring Jeff Ready, co-founder and CEO of Scale Computing. Discover how Scale Computing has navigated the virtualization landscape, harnessing hyper-convergence and AI to offer self-healing, efficient IT solutions. Learn about their unique journey, steady growth, and how the Broadcom acquisition of VMware is playing…
Join us in Episode 79 of Great Things with Great Tech, featuring Jeff Ready, co-founder and CEO of Scale Computing. Discover how Scale Computing has navigated the virtualization landscape, harnessing hyper-convergence and AI to offer self-healing, efficient IT solutions. Learn about their unique journey, steady growth, and how the Broadcom acquisition of VMware is playing out for them
Scale Computing did hyper-converged infrastructure (HCI) first! We talk with Jeff Ready, co-founder and CEO of Scale Computing.
Join us in Episode 79 of Great Things with Great Tech, featuring Jeff Ready, co-founder and CEO of Scale Computing. Discover how Scale Computing has navigated the virtualization landscape, harnessing hyper-convergence and AI to offer self-healing, efficient IT solutions. Learn about their unique journey, steady growth, and how the Broadcom acquisition of VMware is playing out for them
Founded in 2007 and headquartered in the Midwest of the United States, Scale Computing has established itself as a significant player in the HCI industry, known for its simplicity and cost-effectiveness, while providing the performance and availability organizations require.
Topics Covered:
Hyper-converged Infrastructure (HCI)
Edge Computing
VMware Alternatives
AI Operations (AI Ops)
IT Infrastructure Management
Virtualization Solutions
SC Platform
HyperCore Operating System
Data Center Innovation
Channel Partnerships and MSP Strategies
Remote Work Infrastructure
Scale Computing Growth and Market Adaptation
Technology Ecosystem Partners: Intel, Nvidia
Infrastructure as Code (IaC)
☑️ Web: https://www.scalecomputing.com
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☑️ Technology and Topics Mentioned: Scale Computing, Hyperconverged Infrastructure, Edge Computing, VMware alternative, AI Ops, IT infrastructure management, Virtualization, HyperCore, SC Platform.
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Transcript
RAW TRANSCRIPT
the reason when you look back at at the whole world of of hyperon convergence most of which were just doing virtual storage for VMware we had this different angle that AI Ops back end could keep things running when they went wrong in the absence of you sitting there in front of it was extremely helpful hello and welcome to episode 79 of great things with great Tech the podcast highlighting companies doing great things with great technology my name is Anthony sper and this episod episode we're talking to a company that
was founded during the birth of the hyperon converged infrastructure industry with a story marked by Steady growth strategic Partnerships and a commitment to customer Centric Solutions this company has carved a niche in the evolving it landscape of virtualization and in the year of 2024 has renewed Vigor given everything that's happening in this crazy world that company is scale Computing I'm joined today by Jeff ready the co-founder and CEO of scale computing welcome to the show hey thanks for having me Anthony excellent no worry
so just to give a bit of a shout out to the show as a reminder if you like great things with great Tech and we like to feature on future episodes you can click on the link on the show notes or go to jtw j.com as a reminder all episodes are up on the website they're on YouTube and on all good podcasting platforms Apple Spotify all hosted and distributed by Spotify podcasts all right Jeff I rushed through that because I want to to the meat of you know why we're talking to scout Computing today but I think like
all episodes it's it's really good to get a background about yourself where you started um and then obviously talk about the the founding of scale Computing but you know to start off with just give us a bit of a background about yourself and how you came to be in this great industry sure uh so I am I am probably the definition of a serial entrepreneur I've been starting companies um since I was 11 I've had a I've had a company continuously operating since I was 11 wow that could be a record I don't think
I've ever had someone I don't know maybe um you know and I uh and most of them have been Tech not all you when I was 11 I was mowing lawns but by the time I was 13 I was building computers um and so I've been I've been in Tech forever the um you know I'm a computer science by by University training um so I can I can talk all the tech although I I was once deemed the worst programmer on the team which is how I got this job so um somebody had to sell it right so we're kind of lined up I mean I don't I don't
run like multi-million dollar companies but I I definitely was building computers when I was like 13 15 and I definitely went to UNI went to computer science but it was a horrible horrible programmer so there you go so we kind of matched up a little bit at least on that part yeah I was always the guy who was the you know the team lead and the group that had to talk to the professor while the other guys did the did the real work but but I do know how it all works um so I've got that and then you know kind of
coming out University I I started a um an internet service Prov provider back in the early this was dialup modem days this was a long time ago so I was in the ISP business um I started uh one of the very first companies that did online advertising in the 90s um and we did ads in in software programs which we would Now call apps but they weren't called apps back then um so I apologize for that but then um after we did that I started a company in the email security space specifically anti-spam uh so we used U neural networks and natural
language processing to identify and filter junk email ironically nearly the same technique that's used by chat GPT today except 30 year 25y old technology so what was what was that company called that company was called um corv ago um we were around about two years then we got acquired by a public company um called tumble Communications it was also an email security um yeah it's funny because I just just to sort of off there I mean I dealt like we talked about before working in hosting early on that
was one of my first gigs was working with a company called malard that was in Australia which basically did the same thing right so yeah it was kind of and that was what 20 yeah over 20 years ago so almost the same time frame but yeah crazy to thing that you were using Nel you know the machine learning kind of component that's so popular today I've I've come across that with a few guests over the last you know 12 months that have S oh yeah we we we definitely did AI before before it was a thing but it
definitely was yeah I say it was before was cool yeah so yeah that's it so yeah go go on yeah yeah so so we had that company and and that company um you know we sold that that product as an appliance so this was um you know to your own your own background right this was when people mostly ran their own exchange servers and so it was an appliance you would sit physically in front from a network topography standpoint in front of the exchange server and it got rid of the the junk email before it ever made it there and
um so that was that got me into kind of the the world of Appliance type it um and so from there when that when that company was acquired we I spent some time with the company that um that acquired us obviously and um the uh one of one of the weird things that happens you because they were public so when when that acquisition happened um it was it was very public that I sold the company and you know me and all the other Founders were being bombarded by every money manager wealth manager all all under the false impression that we got
all the money which is not how this works but um I wish it was but it is not how this works but but um so then we decided hey we could use the we could use our AI backgrounds and we should use the same kind of you know techniques and we'll do stock market forecasting and we'll be our own wealth managers right so we uh so we started kind of a science project that that grew and grew um and we were using you know again different kinds of AI algorithms to uh do stock market analytics and and it worked and
it was working pretty well and we decided we were going to turn that into a real business um which meant we had to be a hedge fund so we're going to take other people's money and and use this algorithm um and so so we started down that road and what I learned what I learned was all the the Hollywood movies that you see about Wall Street and all like how shady and squirly it all seems it's all true as far I can tell I was going to say this isn't leading I mean I know scale was founded in 20078 I mean
I'm just you know something happened around that time as well so yeah yeah yeah and so we we we hit the we aborted right we actually there were six of us involved and we had an offer to to bring in about $20 million of investment Capital into that business and but but that was it was going to be real before that was all our own money right so you know and if you made money one day or lost money the next day it you know I mean it hurt us but it wasn't like it wasn't somebody else's money yeah um and
so we we took a silent vote to see who was yes or no and we everybody unanimously like No And and the thing was and I learned a lot about myself in that process is that the technology was really cool right I mean I love the the tech part of it but the business was kind of lame right you weren't really solving anybody's problem you know the customers didn't care how it worked they didn't care they didn't feel better because you did it was just like you made a money or you lost money right and
and that was it and that wasn't that wasn't fun right going all the way back to when I was 11 it was always there was a product there was somebody that had a problem you were trying to fix it right it's kind of the engineering Mindy yeah I get you yeah yeah and so so when we shut that down we decided okay we need to do something else and over the time we had built an entire infrastructure um again this was all Grassroots our own our own stuff so we had a a Computing engine and a storage engine and all that
this that that we couldn't afford to buy from the market you people wanted millions and millions of dollars for the kind of stuff that that we put together and so we it was all homegrown and and we thought well surely other people would want this kind of infrastructure that we built for ourselves and in in effect um that infrastructure was a direct competitor to what I Loosely call VMware right VMware being the quote unquote operating system if you will for the data center um so we had our own software stack that
was that operating system and then the componentry that that feeds into an infrastructure so the network the storage the compute all of that and um so literally my first business plan was a was one sentence that said compete with VMware right now at the time VMware had just gone public and you know they had 98% market share and we thought well okay perfect they got to have some competition right and so that's that was the The Genesis of it and you know that the the interesting thing and there's a little bit of an entrepreneurial story
in there which is you know I thought what we would take to Market initially was the full solution right everything that we had put together and I started um and I recommend anybody to do this you're starting a company right I always I always start making sales calls before we even have any actual product right and so knowing we were going to with theare that isn't it that's that's not not not outrageous that in terms of a strategy yeah no no I mean that's you you know I always say customers have all
the answers right and and they also you know have most of the questions you just haven't discovered them yet right so yeah so I went to literally me and one of my co-founders went to vmware's website they nicely had a whole bunch of case studies listed and those are the people I called right like okay these are their top customers let me call them and and my pitch was hey I've got um I've got something I'm working on something that's quote unquote exactly like VMware but it'll be 30% cheaper
right what do you think nobody was interested right nothing and and I I finally I got a guy on the phone um was a law firm out in California and I he he was really being very open with me and so I said okay what if it was 50% cheaper no probably not and I finally got to point said what if it was free right what if I had everything VMware had but it was free and he said I probably still wouldn't do it and I thought you know and I asked them I said well how much did you spend on VMware um you know he's like about
it's about $200,000 a year for them and I thought how how could you say no to free and um I said okay and I was puzzled and I was thinking and I said well what else are you spending on he's like well we just built a new Data Center and um he's like and that's how I know exactly what we're spending on VMware because that was part of this new Data Center and I said oh well what all went into the data center he's like he rattles off all these components it was it was a $20 million build
and the light bulb went off in my head and I said I thought oh I you know what I think I'm asking this guy is can I save you a 100% of $200,000 and what he's hearing me ask is can I save him 1% of $20 million right and I said well what else is in there and he he go he's like different components what's the most expensive thing in the data center he said oh data storage for sure that was like 70% of the cost and and I saidwhat if I could save you 30% on your data storage and he said I'd write you a
check right now I said okay all right that's the key and we had that right because we had the whole solution and so we went to Market with data storage which turned out to be um hyperon convergence right I mean that that led straight into the world of hyperon didn't have a name then right yeah um but that was the idea so so so just backing backing up a little bit because it's quite interesting so number one I love the the hard pivot from stock brokerage platform to to to what becomes scale that's a great it's one of the
best pivots that I've had on the show love it completely um I want and we foreshadowing a bit of the conversation around broadcom and VMware afterwards I think you made a really good point though part of what you what you were trying to trying to sort of convince that that customer you know 20% 50% I'll give it to you away for free sorry VM we've got VMware even though the whole concept was around the data Center I think that's the that's the pool that VMware had that was that good that even
if you're offering stuff for free people understood that it still wasn't worth it because it was that good you know in the market so I think that's an interesting point to touch on a little bit later on when we get into what's happening now right and and what's going on um so 2007 you kind of found the company 2008 you Incorporated the company um and then it wasn't until 200 that you launched the hyperon converg software and Appliance um so is that what was it to start with you mentioned storage but from the start
what componentry was it and and was it just was it a box that you put in to a data center so just explain what SC Computing is there correct yeah so the initial product was a scaleout San right it you know we they were it was a a series of of primarily one and two youu pizza box servers that you could and hence you know you could stack up and and sort of start small and add to it over time and have a clustered sand effectively um and you know that that was always meant to be a Gateway into into again what sort of became the first
version of hybt convergence otherwise I would have had a really dumb name for a storage company right scale Computing isn't a great name for a storage company but that that's where the market took us right like they they people wanted that storage component and um and so that's what we we launched with and then a couple things happened right it turned out this was around the time that um you had a big price war in the storage market around 2010 between EMC and Dell um and and it became very difficult
right as a startup you know I mean no investor ever wants you to say hey our advantage is price but as a startup your advant one of the advantages has to be price almost every time right I mean there's some exceptions but when you're going into a mature Market yeah I you have to get people's attention right and so so we had a pricing advantage and when that the margins collapsed in that market that's a bad spot for an early Sage company to be um you know it's it's hard enough to make a business on 50%
margins and if the margins go to 10% you're you're never going to make it right and so we said okay well now is the time to launch what has has been the the underlying product the whole time uh which was the idea of combining uh the compute and the storage and importantly the virtualization stack together in one right that was the idea and that you know that and going all the way back to the stock market you know system we set up the the realization we had then was that you know a storage device a s is a
dedicated server right just for storage so a server then you had a special server for a San you have another special server for Network called you know a switch um which is again just an x86 server doing something special and at one point in Computing the CPU was the bottleneck and so you had to separate all these things out to make it work and CPUs got fast enough that they weren't the bottleneck if you looked at the CPU on your typical sand it was a tenth of a percent was being used and so we thought well we practically said well
we we don't need to buy servers we should just run the application on that same device and that that sort of became the impetus for hyperon convergence and what you know the irony right I think that you know of all the companies in in HCI most of which have gone away um some of us are still around but you know new tanic is the most well-known right and nanic existed first similar to us as just storage for VMware right they they didn't position themselves as HCI it was you know they had a logo that said San
with a slash through it like no San um and so I have the the dubious honor at this point I guess of being the person who coined the term hyperon convergence which was ironically meant to differentiate us from new tanic right which seems ridiculous now but but the the term meant or was originally to mean converged infrastructure so you may remember at that time converged infrastructure was a thing right it was the idea that you would put all the components in one rack right and you'd have everything running so was converg
infrastructure inclusive of the hypervisor that's what it meant right so the hyper meant hypervisor converged infrastructure it just sounded cooler to say hyper converged infrastructure yeah right and that was something that we did that at the time nanic did not do right so we had our own um virtualization stack our own swor stack all combined into one and we sold it as I had to go back and think about it right because I you know I mean initially yeah nanic was storage and and I've actually almost put that out of my
my my memory the fact that it was only after the fact that they you know announced their their hypervisor competitor to because they could because much like what you're saying it's like well we're doing all the storage we we've got crazy compute resources getting better every year um you know the hardw was getting that good we can we can do something here we can push the limits of the hardware to actually get more and actually carve our own Niche here and that's exactly what they did and um before that it was just like vsan
versus nanic that's what it was right like it was and that was the hyper converg componentry in itself and was a massive outrage and must you know when nanic brought out their hypervisor Acropolis was like whoa what are they doing they can't do this they they're threatening vmw dominance here and then it became a bit of a holy war and then I guess you guys just kind of sat back and kind of went we're going to let this all play out a little bit right because we've got we've got a same same play
here but I mean your your hypervisor like I guess like Acropolis as well it's KVM based right correct yeah that's right yeah yeah yeah i' I'd like to think that nanic copied us right like when we had that that out there um but right it's not you know I mean copying is good flattery but it's not like they'd be oblivious to the same thing that we saw which is hey not not everybody wants the the VMR stack right I mean that's it's it's a thing and and one of the things that um that was and
still is unique to scale and this was sort of the impetus for the entire company is that the entire product is built on going back to my my AI Roots right it's built on an AI Ops Foundation right and the idea is um we can I mean AI is all pattern recognition right I mean we I think anyone Tech recognizes that's what it is um and so what we knew is that hey in an IT infrastructure troubleshooting it is all about pattern recognition if you're an IT administrator you see what's going on you're looking for the patterns and then
you try and take different actions to fix it right um same as troubleshooting a car for that matter right it's the same kind of thing and so we built this engine to monitor thousands of different things in an IT environment and look for the patterns that indicate something's happening and then have a system which can take action to fix it right this has nothing to do with hyperon convergence but this is this is in this has been in this was in the original storage product this was in the hyperon converg product and this
was in our our our all of our products today and it shows up to a customer as it's self-healing it's easy to use it's all of these sorts of things and and so that that unique element is always how we differentiate ourselves from uh primarily VMware but also nanic which is it had this kind of self-healing capability yeah which is interesting right because if you ask about you know what's your problem statement and what's your value prop I'd say that would be it compared to what I know about VMware and
UT tanic and others out there yeah VMware is great as it was as is um lots of overheads in terms of you know there's a reason why you needed VM admins right um stuff could go wrong um there was not the concept of it being self-healing probably what still doesn't really exist today it's it's just not there which is kind of interesting given how popular it is and how accepted it is it's it's it's a strange one I've I've been thinking about this a lot over the past couple of months since the broadcom
stuff like how did they get themselves to a position where they just deao themselves um it was through a lot of good Community they really won the community over so there's an element of that to it as well which obviously I fell into it that's my world um but yeah it's an interesting point to make is that it wasn't easiest um and it wasn't the most bug free but it still dominated while you had Solutions like yours which were doing this you know Point differentiator around the self-healing
and through your roots which probably people just didn't understand I mean they're understanding it now I'm getting like they're understanding the value prop now which is you know it's being thrown onto you literally uh we'll get onto that a little bit later on but this before we get to 2024 I mean over the next few years I mean how did you kind of navigate you know from the from the start um 2012 2015 and through you know I guess leading into Co and and and how that kind of impacted the company I I
noticed that in 2019 you had you opened a miror offices and that must have been interesting as well given what happened with Co but you know what what was scale Computing basically doing in these years up until 2022 23 24 well you know I think what's the reason when you look back at at the whole world of of hyper convergence of which there were probably 50 companies at one point at the peak of of all that most of which were just doing virtual storage for VMware that's but most of them did um you know new tanx was the
dominant player so they survived and and we were right we had this different angle right this angle with that AI Ops back end and so you know it lent itself very well into environments that you know maybe had limited IT staff or limited IT staff per site you know a construction company with a thousand employees but 20 jobs sites and five it people right that AI system that could keep things running when they went wrong in the absence of you sitting there in front of it was extremely helpful to them and so we kind of carved ourselves
a niche within um you know mid-market companies lower Enterprise companies remote offices those kinds of things um and and so we were right unlike nanic for example that went very heavy into vdi vdi was one of our use cases but it was not I mean our primary use case was was literally like moving from vmw to scale like I mean you you you I got 100 applications I'm now running them on scale because I want that ease of use I want that that self-healing and for us it became it was frustrating as a Founder right because I could see um I
could see companies like nanic and others like exploding right you're kind of writing you know writing even a little bit on the coattails of a VMware yeah where we we were more slow and steady right like okay we'd find the customers they'd come to us I wasn't raising $500 million I wasn't you know doing that kind of thing we just kept growing but you know we were building a reputation within that group that that we could do this and then as things started flaming out we just kept going right it wasn't any really any different
for us when when covid hit um that really kind of opened up the world for the idea of remote work right and and that the IT team wouldn't necessar they couldn't maybe couldn't even go into the data center right so um so that that gave us some uh some Tailwinds in terms of the kind of things that that we did now it had business challenges right I opened an office in am Mia in 2019 I I opened an office in San Francisco in February of 2020 um which is hor you know it sat for years empty right and so
um but you know we were we continued to expand and um you know one thing that we did that's um less different than nanic but more different than what a lot of the other HCI guys did is we went 100% through uh the channel resellers and msps and so forth right from the get-go we were always a channel company and you know it's a big investment up front but as it starts to work then then you become part of their practice and they have relationships with customers especially right when when you look at we're focusing on those midsize Accounts
at the time very I mean it's very fragmented Market very hard to reach them but they may they'll have a local partner of some kind who they trust and that's who can get us in the door so um so that's that's what we did and we kind of went through all of that obviously early covid everybody was freaking out but then then it became it became kind of a big boost to us really so and what about Edge because you've on your on your site a lot of your messaging is around Edge and being successful around there and
being the right solution for Edge can you can you explain that and why why scowl's good for Edge yeah so so the one thing that that you know started to happen really I first probably started seeing it in maybe 2021 2022 is you know the idea that that companies were deploying infrastructure at the you know way outside the data center which became known as Edge Computing so the you know on a truck on a ship in a restaurant these kinds of places and the thing about those environments is there are a lot more like the construction company
than they are a a big global data center right I there's nobody there and and so the AI piece to keep things running in the absence of a human being able to physically touch equipment um was very handy the other thing which was always just a nice to have with scale um but worked very well for Edge is that our entire stack um again maybe because I'm a computer science guy and I care about you know elegant code and stuff like this but it's extremely lightweight right so like I mean this is an Intel
nuok right so our our entire system will run on this hyperon convergence the virtualization stack everything and will consume you know a gig of RAM and a tenth of a CPU core and you know in the data center that meant well maybe you need to buy a few a few less servers which is nice but out at the edge where you need to run on something like this it's a big deal right and so we just lent itself very well to that kind of environment and also VMware was weak there right so as a VMware alternative um all of the things I just said about
scale don't really apply to VMware and so customers even if they were running VMware in their core data center they were more open to running something else out at the edge and with that I mean you've got the Intel Nook there is do you do the um the other arm chipsets and everything as well have you got compatibility with that all we don't we yeah we we do in the lab we don't have any customers running the arms stuff yet um although I expect that's coming right you know it started off as sort of
Raspberry Pi type you know experiments but with the Nvidia arm stuff there there's more coming I mean certainly a big driver for Edge is AI um and you know it's very expensive to run gpus in the cloud and so and so that that that's another application that lends itself well to Edge Computing and that's a big big Focus area for us yeah so you got like in terms of the the products you got the SC platform the the hyper core as well so just explain those two and then we'll spend the last sort of 10
minutes talking about the the elephant in the room but yeah let's let's finish about the the product overall is called SC platform um a platform for running applications the the operating system that runs on the equipment is called hypercore and an operating system is what contains the um the AI engine the hyper converge storage the virtualization stack all those things and then that that ties into a component an optional component but most customers now are using it called fleet manager which is a central portal through which
you can control all of your environments right whether whether you have one system or whether you have 10,000 and and the idea is that you know we want to be able to turn your entire fleet into something that looks and behaves like a private Cloud because even if it's two systems right that's okay right you can still manage it centrally and deploy applications and do infrastructure as code and all that kind of stuff that's awesome um I haven't and what about the networking component is it is is that
obvious that's obviously built in but do you have something that is what would be a equalent to what was ner NSX uh in a in a in a lighter weight version right we wouldn't have everything that that had right but again the kinds of customers environments we're going into typically don't need it um so you do have networking stuff in there you can even just you know in in some Edge environments you directly connect these things to each other because then then you don't need a switch right so it'll basically do its
own networking um internal uh so you've got a number of different options there but um but yeah so it's all built in yeah and to that point your point you know that was a huge acquisition and a huge bit of technology which I think was retrofitted forcefully um from a from a operational point of view and also just from a from a revenue Point of View to a lot of customers right it's like well now you're going to use it um because we have to kind of realize the the investment that we made in in the
product right as great as it was and as Forward Thinking as it was it it did feel like it was pushed on a lot of people there and was definitely overkill for what it was so yeah there's something to be said for a simple networking stack as well that's for sure um all right so let's let's let's finish off talking about this broadcom scenario because obviously you know it's it's it's it hasn't I didn't plan it this way but you know I had xcp on NG on in the last episode I don't think you'll be the
last sort of virtualization company they have on this year obviously as well but you know what's your whole take on the whole broadcom scenario I mean obviously we know that it has been impactful we talked about this earlier I think in in the space of two weeks I've gone from oh this is a bit of fud and this might pass to this is actually quite a serious inflection point in the world of virtualization which is good news for you for companies like you it's like you've kind of been here ready to go um
for this particular moment for all of your existence right so what what's your what's your thoughts around it well yeah I mean from a business standpoint it's obviously great for us um there's been even I being in the throws of this and and we started to see you know benefit even right after the the acquisition was announced which was over a year ago now we started seeing a lot more inquiries into what we were doing and so forth but then once the deal closed and broadcom started taking actual actions and
changing the way pricing worked changing the way they worked with their Partners um taking customers direct away from Partners um there there's been a enormous increase in demand both from the end user side as well as the partner side I mean just this January versus last January we've had a 500% increase in uh in inbound uh leads so it's that is a huge it's enormous right because and we're an established company right it's not like we're a startup that you know this is It's you know my
expectation was that we would grow about 30% which is what we typically grow right and now I mean it could be double triple I don't know it it's it's huge the the thing is and I I think this is what caught everybody off guard even even kind of maybe lulled me into uh being caught off guard is that historically broadcom has made Acquisitions and focus those Acquisitions on on literally their top 600 customers right they openly State this 90% of their revenue comes from 600 customers they did it with sanch they
did with Computer Associates but then when they announced the broad deal they they were saying the things that lead you believe maybe that's not going to be the case they they want the SMB customers they believe in the channel they're going to continue to invest in R&D and so everybody's like well all right maybe this one will be different and then as soon as it was done they did all the same stuff that right out of the manual or whatever right that they make and and they'll make money with this
right I mean don't I'm not bashing their business model like they will 100% they've made money with santech they'll do well but it does create if you're not in that 600 customer group it's easy to be disenfranchised right I I've seen customers show me quotes where they've gone up 20 times in terms of like how the expense right it'll be advertised as a price reduction but it's only a price reduction if you had exactly the right components and exactly the Right Mix otherwise now it it costs more I I had
Partners tell me that they had you know I had one partner had over a thousand customers taken away from them and taken direct to uh to broadcom that's going to cost them half a billion dollars right and which is yeah and and so as going back to my entrepreneurial roots and and having been an ISP and and having worked with partners and built my whole business around Partners like that's actually kind of painful personally for me to watch like knowing it's hard right like I think I yeah like I know like you
know when I think about stuff that I was building and services that I was responsible for and then the Natural Evolution of the cloud meant that you know potentially customers were taken away because of that and then we were having customers who are saying okay well we're going to migrate you off we're going to pay for 24 months worth of licenses just come with us right and I'm not going to the company did that but it's quite a big company in the world um but you know there's there's an
element of hurt there that you definitely feel and it's it's disappointing because I think that also speaks to if I can go back to the first comment you made around having that conversation with the customer talking about the discount you know there was a reason why he said no a number of times is because he believed in what VMware was as an entity as a partnership as a relationship as a community um and that's what's kept VMware number one for a long time there there's a strong sense of that it's just more than the
technology even though the technology is obviously pretty damn good um when you destroy that that's that's that's a fundamental shift right and I don't I can sit here we can sit here and say it and you know the broadcom exx and those guys that have got like a share price that's the highest it's ever been and whatever it's obviously working but from a from a just a sort of ground level perspective I think they've kind of missed the the essence of what VMware was and they might come to Ru that um and it seems to
be happening like you're seeing a massive you know questions going hey what about you guys now I think what's happening as well um we're going to run out of time but I think it's just really interesting to say this is that there's a bit of a reaction Happening by customers who are going oh you know like 200 a 20x increase I can't I can't swallow that but then I think what maybe broadcom are thinking is that well that's a stick that's a sticker shock but what is actually the total cost of
Shifting to a scale Computing like what is actually going to cost you right so I think that's where you know you're you're getting those inquiries and then what's the reality of the 500% what's actually translated to to C to actual customers moving we're going to know more in 6 months you're going to know in more in like the next three to four months when you see your sales starting to roll in but I think that's still to sort of sort of work itself out the actual reality past the emotional
reaction of it yeah no and that that's why you know when you look at some of the things that we've done um since the launch is trying to make it easier for customers to make that that shift right the first question they always ask is will my applications run and they will right I mean so that's that's easy uh the second is well how do I move them over right and we have tools and we're giving those away for free and the important thing and I think sometimes this is missed right the same tool that we we provide to move
applications onto scale you can also use to move them off right so if you decide like oh never mind um use the same thing we gave you right that'll work fine good I love that anti-lock in I love that yeah you know it's like having an unlocked phone right you can switch to any carrier you want and um right and then what we're doing is we we're we're providing customers if you have an existing vmw contract that's still you know you got nine months left or 15 months left or whatever if you move over
to scale we'll just give you that time for free um so you're not going to lose uh lose lose that and then you know mentioning on the you know on the partner side we're also providing you know extra incentives to Partners not because it's just like hey hey you know now's the the moment time opportunity but but Partners have a switching cost too right they have to learn the new products and they have to represent those products and so we're providing incentives to them to say Hey you know
we're we're here with you right I just thought about I just thought about all the costs that they put into training and cific it's significant huge anyway we can go about that for hours but hey I think you know I think from the sounds of it though because you know you're you're more than 10 years in in play here you're basically a pioneer of the hyperon converg infrastructure right so you're so well placed to be able to have those conversations and offer an OP an option to these customers and an
alternative that's pretty tangible and real right so then if they do decide to make that move it's it's it's going to it's going to happen in you're making it easy so I'm really looking forward to to seeing how you grow and how you navigate the next 12 months especially and you know what this actually looks like at the end of the 12 months so you know thanks for being on great history great per it I love the story about yourself you know and where you started and love the story about scale Computing because
I think it it fits so perfect with a lot of people listening in terms of the time that they started in virtualization and you're still around and it looks like you're going to have a great trajectory going into 2024 and be on so thanks for being on um this is a final remind if you like great things with great Tech and would like to feature in future episodes please hit the link at jtw JTC uh please tell your friends about the podcast as well a bit of a new strategy here that I learned from other podcast
if I yell out a link that maybe not work but go tell your friends about the podcast tell your tell your co-workers tell your mom it's a good show so that's another way to get some listen listenership I'm trying we'll see if that works but anyway hey Jeff thanks for being on the show this has been episode 79 thank you to scale Computing this is great things with great [Music] Tech
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