Oral History of Carl Eschenbach

All right, my name is Doug Fairbairn. I'm here to do an oral history interview with Carl Eschenbach, who spent most of his career, a good section of his career, with VMware, which is going to be our focus, but other important positions before and after that we'll delve into a bit as well. The date is December 4th, 2023. And Carl, we like to start with the beginning. Where were you born? What was your family life like? What were especially things that might have influenced your future direction? Tell me a little bit about those sort of things, when and where you were born.

Sure.

Yeah.

Well, first of all, Doug, thank you for having me here today. And And I'm looking forward to this conversation. I think it'll be fruitful for the listeners and get a better understanding of myself and my experience and history with some amazing companies like VMware, where I spent, you know, 14 years of my career with. As it relates to me, I grew up in Pennsylvania, Northeast Pennsylvania, with one sister who's a couple years older than me and an amazing set of parents. I was very blessed. We were a very close-knit family. We did everything together. Both my sister and I were very, you know, active in a lot of athletics. Both of us were 3-sport athletes growing up, our, you know, whole childhood and through, you know, high school and even into college. And we had just amazing parents. We had parents that taught us the values of life start with that of your family. There's nothing more important than your family, and you keep that at the center of everything you do and all the decisions you make. And as we talk throughout today, Doug, you'll probably hear how a lot of the transitions in my life were focused on family decisions that drove my professional decisions as well. My parents have both passed. They're in heaven now. I get to talk to them every day. They're up there. They got the best seat in the house now to watch my sister and myself and what we're doing with our families now and, you know, our careers. My sister still lives in Pennsylvania. She's back there. She's an amazing woman, a very strong Christian lady who has her own ministry and has really helped me understand and live a life of servant leadership. And I'm still pretty close to my sister. I miss her dearly, but I get to speak to her quite often. 2 daughters, you know, who are my nieces, are special young women in my life. And then, you know, for my family, I'm super proud to say I'm married 33 years to the most amazing lady in the world, Anna. I have 3 amazing children. I have twin girls who are 22 and a son who is 20. And all 3 of them are in college. So they didn't go far from us, Doug. We can get to see them quick or they can come home to see us. Again, going back to the importance of being close with our family. We moved—

What year were you born?

I was born in 1966. This is my birthday week. I'll be 57 this week in a few days. So we're doing this talk right now, right before my birthday. And I grew up my whole life in Pennsylvania, got married, lived in Pennsylvania, lived in New Jersey, Pennsylvania area. And then I guess it was probably about 19 years ago, actually with VMware, that my wife and I decided, after having our twin little girls and then our son, it was time to move to California because I was doing the commute back and forth for many years with VMware. And prior to that, even commuting with a company called Inktomi back and forth to Silicon Valley. It was just getting too much on both my family and I, so we decided let's pick up and let's move to the Bay Area. We landed in Los Altos and we've been there ever since.

Wow. So let's go back a little bit. You've given us a good summary of sort of how you got started there. So you went through high school. What sports did you play?

I played football, baseball, and wrestling. I was a big wrestler, so those were my 3 primary sports.

Did you ever have any dreams of going professional in any of those?

No, if I'm honest, I was never, you know, big enough to be a professional, probably baseball player or football player. I played, you know, a lot of those sports. I excelled also in wrestling and had, you know, quite a career in wrestling. In fact, I went to college, initially to college on a Division I wrestling scholarship. That's a great sport because you wrestle people your own weight, so your size didn't always matter, Doug. And it was a very big passion of mine and something that taught me a lot about life. It's a very disciplined sport. It's all about, you know, drive. It's all about resiliency. It's all about being mentally tough. And it's also one of these amazing sports that teach you as you get into business how to be both an individual, because you're on the mat one-on-one.

Right.

But you're also part of a broader team. So how you can have impact even as an individual on a broader team is something that wrestling has taught me a lot about as it relates to business. And I speak about wrestling and the impact it had on my life quite often. 2 years ago, I was very fortunate, Doug, to get inducted into the United States National Wrestling Hall of Fame.

Wow, congratulations.

In Oklahoma at Oklahoma State University. It's their equivalent, wrestling's equivalent of a Baseball or Football Hall of Fame, and I got inducted a couple years ago, and it was one of the best honors of my life to have my family there with me and be awarded such a prestigious, you know, induction into a great sport's Hall of Fame.

Great recognition. Congratulations. Yeah, thank you. So what, you know, when you were in high school, What did you think about in terms of a career? What was your—

Yeah, it's a great question. You know, I was probably more thinking about, you know, food and beverage, hotel, restaurant management. My parents grew up, you know, owning a, you know, an ice cream stand, a Dairy Queen-like, in Northeast Pennsylvania. So I was always, you know, interested in, you know, the food business, in this case soft ice cream. I was always interested a little bit in entrepreneurship because not only did my parents own a soft ice cream business and stand, but in the winter you can't sell soft ice cream in the Poconos of Pennsylvania. So my father actually got into the Christmas tree business. So, you know, from, you know, early November to Christmas, we would harvest and produce Christmas trees and ship them all over the East Coast and sell them at local stands. You know, it was software ice cream, you know, software soft ice cream in the summer, Christmas trees in the winter. And again, just learned a bunch from my parents on entrepreneurship. Never had an education or background to do either of those, but were very successful. And, you know, so I thought about, you know, probably I was going to school for business management, not necessarily for technology. I somehow I stumbled into technology when I made a pivot in my college education.

Where did you go to college?

So I started out at Wilkes College, a small liberal arts college in Wilkes-Barre, Pennsylvania, in Northeast Pennsylvania, a Division I wrestling school where I was wrestling. And then my brother-in-law, who wasn't my brother-in-law at the time, this young man who was dating my sister, Went to a tech school, Doug, called DeVry University.

Yeah.

And I saw him, you know, go to school, finish in 2 years, and get out and get in this industry called technology and just was, you know, doing really well. Started making some really good money. And I was like, that's interesting. I looked into it. My parents didn't know. I ultimately decided I want to go there. And I came home and shared with my parents, Doug, that I was going to Leave a 4-year university with a scholarship to go to a technical school for 2 years. And, you know, now I sit here, you know, proudly stating that I have 2 years of, you know, formal college education. Not a degree, not an associate degree, a diploma in electronic engineering. And I made that pivot. And you look back, it's one of those crucible moments in your life, Doug, where— You know, one day I'm sad I'm not, you know, sitting here talking about a 4-year degree and, you know, went to 4 years of college. On the other hand, I will say I sit here super proud of myself and my family to go to a 2-year tech school and to just, you know, build a very blessed and fortunate career because of the people I was associated with.

Well, I'm glad you mentioned that because I, you know, when I was looking at your background, your resume, I thought, hmm, that's interesting. You know, so many people in this industry come from the traditional 4-year universities to get the double E or, you know, MBAs or whatever. And there's often the talk of if you don't have that name school or whatever in your resume, then it's hard to move up in the business.

Yeah.

So before we get to all of that, I mean, did you ever find that your lack of that 4-year degree or being from a name school held you back or you were overlooked or not appreciated for the talents that you brought?

Yeah, never once, Doug. I must admit, no one ever questioned it. Some people question it when you're, you know, early in your career and you're getting those first couple jobs or you're transferring one company to the other, but it never held me up. It never slowed me down. I, you know, ultimately think that your attitude in life determines your altitude and how far you go personally and professionally. I think it's about hard work, being driven, being motivated, and being inspired to impact others. And if you do that, I think your career can take care of itself. It's interesting now with me at Workday, one of the things we're spending a significant amount of time talking to the industries, talking to our customers and prospects about is the importance of skills.

Mm-hmm.

I think we're moving to a skills-based economy, a skills-based world where, you know, the C-suite is completely focused on upskilling their people and no longer focused completely on pedigree.

Mmhmm.

So it's interesting how this has come full circle, and I hope I can be a living example of how, you know, you can be very successful if you acquire the right skills throughout your career and have big impact on, you know, companies, others, and even your own career. So it's interesting how that's come full circle now, and now I get to speak about it and hopefully provide a little bit of light to others to say, you know, it's about skills, not pedigree or where your resume says you graduated from.

Well, that's a great story. I'm glad that we got a chance to talk about that. I think it's an important message to get out to people. All right, so you went through DeVry, you were focused on electronics.

Yep.

And were there any particular teachers, professors, whatever, mentors that guided you in one Did you have a sense that you were headed in a particular direction or another?

No, geez, you're taking me back, Doug. You know, 37 years ago now, thinking about, you know, DeVry and the education I got there. No, I had really good professors along the way. I was intrigued at the time, you know, when it came to, you know, a topic was communications and learning about communications. You know, back then we were talking about AM and FM. We were talking about, you know, all of these different types of communication. technologies now, I kind of, you know, laugh at it. There weren't cell phones, there was nothing at the time. And actually my first job out of DeVry was with a telecommunications company, a PBX company. So that was something that was interesting to me. And in fact, I was fortunate enough to get a job at the place, at the company called Intacom at the time, that ultimately was acquired by Wang. Where my brother-in-law who went to DeVry was also working. So he got me an interview and I was able to land and secure a job there and get into the communications industry in 1987.

Okay, yeah, I was gonna ask you. So '87 is when you— so you must have entered DeVry in '85?

'85, yep.

And graduated in '87 and went to work. And how was the— it's always nice having connections. Do you know people? And in this case, your brother-in-law?

Yeah, in this case, a young connection in my brother-in-law who just started a couple years before me. And yeah, got an interview and raised my hand and said, I'll go and work wherever. I did quite a bit of traveling. I was part of, you know, an implementation team where we were putting in these big PBX systems at places like Lehigh University, like Exxon in New York City, McGraw-Hill in New York City, USAA, you know. So I was always raising my hand and say, I'll be part of the implementation team putting in at the time when people would put in these PBX systems.

So you got real hands-on experience putting all this—

True hands-on experience.

Big equipment in place and dealing directly with customers and issues that they had and that sort of thing, is that right?

Exactly right, and it was early days, you know, and doing these implementations, once they were installed, you know, customers would have issues and you have to go resolve them and figure them out, both Physically and through software at the early days of software at that time and how to service customers when they're not happy and they're upset about their infrastructure, in this case communication systems, their phones weren't working. So it gave you an early view of how to handle conflict, right? How to resolve issues, how to engage with clients maybe when they're not always happiest about what you're doing for them. Yeah, it was a great experience for a few years.

Your experience in ice cream and Christmas trees probably paid off in that particular way.

A little bit, I think.

In terms of customer interface, right?

Yes, definitely on the customer interface side, right? I was very fortunate with my parents always to have a customer service, you know, or engagement type of, you know, experience and personality, and it's something to this day I still enjoy doing.

So how long did you stay in that position and what attracted you to move on?

Yeah, I stayed there for 3 years and, you know, after being there for I think it was 3 years, an opportunity came. In fact, some people that were there went to a new company, a company called NET, Network Equipment Technologies, based here in Silicon Valley. So this was my first entrée into Silicon Valley, I guess it It was probably, I don't know, '89 or '90. I forget the exact year, Doug. But they were doing what was called TDM, right, and wide area network, time division multiplexing, and channel banks, which is when T1s were starting to come about, T3s. And then we got into SONET switching in the first generation of ATM switching with some acquisitions. And I was in a pre-sales role there as a pre-sales engineer. And I was there for many years, and it was a great experience working for my first, if you will, Valley company. Went through the IPO, the whole thing, and traveled around the country, but mostly was working in the Northeast corridor of the US, which is where I lived in the New Jersey, Pennsylvania area.

Right. And was there any particular Things you learned from there that sort of helped set your goals for later on?

Yeah, I think that was where my— I was a pre-sales engineer, as I said, what we called a system engineer. And then I did one year of a trial role that they called sales engineer, where I was put into the role of being both my own engineer as a pre-sales engineer and being a sales executive at the same time. So effectively, in this case, I was a one-man band doing all the design, doing the engineering, and then having to sell it to customers, which was a really fun experience. And that was an experience I will say to this day that taught me the importance of always remaining as technical as possible regardless of your role, because when you're technical and you can understand the impact that technology has against a business outcome, you have that much more credibility with your customers or prospects. So I remained very technical from that role. It really reminded me. And then it was my first job where I moved into a true sales role. My last year at NET, I moved into a sales rep role in the New Jersey, New York area before ultimately I did leave NET to go from wide area network to learning the world of local area network when I joined 3Com.

And what led to that transition?

I just was, you know, I could see the rise of, you know, local area networking. I could see the rise, you know, switching happening. I could see the emergence and growth of companies starting to take off like Ciscos and WellFleets and the Bay Networks and the ChipComs and the 3Coms. And I'm like, wow, there's something going on in that space. So I wanted to get into that business and learn the other side of networking, not just the wide area and transport, but learn the local area networking. And so I went and I applied at 3Com and happened to get the job and started a multi-year journey at 3Com.

What was your role there?

I was a sales rep, but it was also the first time while at 3Com the mid-'90s, as a young man, I got into a leadership role. I raised my hand for a local leadership role in the New Jersey, New York, Pennsylvania area, probably well before my time or I was deserving of it, but I went for it and I got the job, and that was my first real entrée to lead others, which became a big passion of mine.

And how long did you spend there?

I was at 3Com about 3 years. Had a great run there.

Sort of your cadence here, about 3 years.

Yeah, at that time it was— well, NET was a little bit longer, but then it was 3Com for 3 years, and then I joined my first foray into a pure software company called Inktomi, which which was a search engine company and a content and caching distribution network company. That was during the dot-com days, the late '90s, 2000, 2001, went public and had an incredible run there. It was one of these companies, if you go back, we're sitting here at the history museum and look at the history of Inktomi, it was probably one of the fastest rising stocks ever and probably one of the fastest decelerating stocks ever too. But it was just an incredible journey. It was one that I wouldn't give up for anything. It was just fun with great people. I met some great people there. And I spent 3 years there in a leadership role running—

Sales also?

Sales, yep, running the America sales. business at Inktomi before I left.

So you had nationwide responsibility or North American responsibility?

In North America sales at the end, yep. I started running the East and then moved into running North America sales.

And you continued to do that from the East Coast?

I did, and at the time you could do that. You were on the road, right? It wasn't like I needed to be at headquarters. Now, to be honest, I was traveling out here all the time.

Wow.

You know, sometimes, you know, 2 or 3 times a month, almost weekly, just to be here at corporate as we were, you know, building the business and would fly home on Thursday night red eyes. And, you know, and this is when my wife had, you know, our twins. And that's when I decided, wow, this is a little bit hard. This is tough on me. And I just wanted to try to get closer to home and be home a lot more and get off the road. And that's when I made my next transition.

So you moved to the West Coast? You moved to Los Angeles?

No, I was still in— my next transition was while I was on the East Coast. I decided to leave Inktomi, Doug, and I joined a small little Northeast company called EMC. And I was working out of New York City running global accounts for them. And at this time, EMC was one of the high flyers. as they came out to be the clear leader in storage. And I joined them because I would work from New York and New Jersey and Pennsylvania where I lived. And I was there for 3 weeks when I met a lady named Diane Greene through a friend who was about to join VMware. And and I met Diane, I was like, wow, if they can do what she and Mendel say they're gonna do, they'll truly revolutionize the data center business forever. Now, they didn't have it yet. They didn't have a server product.

So what year was that when you met her?

2002, I met Diane. And I remember spending some time with her looking at the technology, meeting her in New York City when she was in town, and going home and saying to my wife, Anna, I can't believe I'm asking you for support to do this after I just left the West Coast company so I could be home more. I'm going to go to a startup again. I told her who it was. Obviously, she had no idea. And She's an amazing woman. She said, if you want to do that, you know, I'll support you. Just help me with these 2 little twin girls we have, and that's why you just left the other company. And that was, again, you know, probably, if not one of the most crucible moments of my career to make that decision to leave EMC after 3 weeks, which is not easy to do.

Yeah.

Learned a lot to go through that process. Did it in the most highly ethical, responsible, and integral way to let them know I was leaving after 3 weeks. And they had, you know, I was fortunate they had saved that position while I did my transition for me to come into it. And then I'm there and I leave after 3 weeks. It just was a great life lesson to learn how to disengage from an opportunity. yet build deep relationships and friendships in doing so. So I left DMC. They all asked me, where are you going? What's this company? VMware? Like, Carl deStoddard, this is 2002. The dot-com happened. Startup days are over. This company's never going to make it.

It's a startup.

What the hell are you doing? And I said, listen, they're doing this thing called server virtualization. They're going to do it not on mainframes, not on Unix machines. They're going to do it on like you know, x86, like pizza box servers. They're going to virtualize the data center. Everyone's like, yeah, that's not going to happen. Like, what's wrong with you? You're working at EMC, the biggest storage company in the world. I said, I agree with you, but if they can do this, I think it could be a pretty unique experience to maybe build an iconic company of our generation. So I jumped in with 2 feet.

So you had been through a couple of startup IPOs and so forth.

Yeah.

So you knew what that was all about.

Well, not to the scale at VMware. I mean, when I joined Inktomi, I think it was much larger. VMware was a couple hundred people when I joined, but I'd been with smaller companies.

But you knew where it could go and you knew the model.

Yeah, I knew the industry. I knew what IPO was. I know what venture I mean, I'm, you know, now, you know, this is early 2000s, so I had been in the industry for 14, 15 years at that point.

So you weren't somebody who was coming out of a big company and didn't have this—

No, I knew, listen, I'd have to go in and build things from scratch. So, you know, there was a couple inside sales reps at the time, maybe 1 or 2 sales reps in the field, and I knew we had to go build a business and build a channel and build a market around this technology. And, um, you know, off we went in 2002. I think we were about $10 million in revenue, a couple hundred people when I joined.

Uh, now before, did you also spend some time at Alcatel?

I spent, uh, 6 months at Alcatel between 3Com, um, and Inktomi. Uh, I went there, I left 3Com with a, with a with my boss at the time who was going to run North America sales. This is when Lucent Alcatel— I shouldn't even say Alcatel, it was only Lucent, which was based in New Jersey in my backyard.

Yeah.

They decided they're going to not just be a telco equipment provider, but also get into networking. And my background at 3Com gave me a great opportunity to say, we'll go lead that. But it was hard to get a big company like Lucent to change their mindset from the old, if you will, Bell operating days, right, and Home Dell Labs and everything else to move into networking. So that was a short stint there.

So you got 6 months of learning what a big company was about.

Exactly, and realized, hmm, I like these smaller companies, especially if they have something special, maybe you can scale them.

All right, so Diane Greene brought you in. What was your position coming into the Running North America sales.

So I joined to run North America sales, which was predominantly most of the business. We really didn't have international sales at that time. So I joined to run North America sales and did that for a few years before stepping in to run, you know, all of what we called field or customer operations, global field operations.

Yep. And so tell me a little bit about what the company was like at the time.

Yeah, it was an amazing tech— it was a very technical company. What they did, right, literally has revolutionized, right, the data center. It's changed the data center forever. And it was a very technical company with deep technical talent, including the professor Mendel, who was Diane's husband and the founder, and his 5 students from Stanford are the ones who founded the company. So it was a super deep technical company. On the business side, we had to go figure that out. And I can remember days saying, we're too technical, we're too engineering-focused, we got to go build a business. I need more resources. I got to, you know, build the go-to-market team on a global basis. And then finally, I did realize how fortunate we all were that we had such a deep-rooted company based on technology, because ultimately that gave us such a differentiated product that we could then go to market and sell it and really start to scale a business. So maybe in my early days, I thought we over-rotated, if you will, being too technical and focusing only on engineering. And a couple years in, I started to realize, let's keep doing that and let's go then invest deeply in go-to-market and partners and channels and scaling the business on the go-to-market side. And when you can do both, have that incredibly talented team of engineers that we had bringing a product to market that was highly differentiated, highly disruptive, And scaled in the go-to-market, that's when things started to really click for us. And, you know, the technical talent at that company in the early days was just incredible. And a lot of those people have gone on to do great things in our industry.

Yeah. So Diane herself was super technical.

Yeah.

Her husband was super technical. So did they— I forget whether Diane had previous significant business experience or—

She did. She had another company that she was, I think, CEO of, if I recall, and she ended up selling it to Microsoft, if I remember, before Mendel created this new technology, virtualization for x86 open systems, and when she became CEO. So she was a really smart lady. I learned a ton from Diane. I'm grateful to her as I sit here today, Doug, that she gave me the opportunity to join her in those early days. And have faith and conviction and trust in me to help her build the business.

So she obviously was looking for you to help on the sales side, but perhaps also from sort of the management operations side. I mean, tell me about your overall responsibilities.

Well, I had everything go-to-market. So, you know, whether it was, you know, pre-sales, the sales team, channels, partnerships, alliances, right? So it was, you know, customer operations, everything, you know, go-to-market. I didn't have at that time finance, I didn't have HR, I didn't have marketing. All those key functions reported to Diane. Eventually, as I scaled with the company, I took on the responsibility of COO and president where I had a lot of those functions and did some of those functions even though it wasn't my primary responsibility for a while as we were recruiting new executives. But yeah, I was primarily owning everything go-to-market and everything associated with So Diane was on until 2008? Yeah, we, in 2007, we sold the company to EMC, and I think in, that was, I think we sold in 2004, and I think Diane was around, I forget the exact date, Doug, but around a few years after EMC had acquired us and after we went public.

So what was the impact of EMC's acquisition and why did they acquire you? Here you had just left the company.

Yeah, it's so funny. This is where it comes full circle, right? This is a company I left a couple of years earlier.

Was this completely accidental or did your—

No, I wish I could tell you, Doug, I was that smart and said, hey, I'm going to go to this company VMware. We're going to start to get some traction in the market and we're going to have them buy us, right? But we did have a direct impact on the storage industry as a whole because when people started to implement VMware, they would naturally upgrade their storage infrastructure and move from local storage on a server to a SAN or a file system that was outside of the servers and just leverage it for compute and memory and some local storage. So there was a direct correlation to the EMC business.

So did they come looking for you? Did you—

So we started to do some partnering stuff with them. I had built some good relationships with them, obviously.

So your previous— Acquaintance with them helped in building this.

There's no doubt. We got into their lab, we started to do a bunch of testing, we started to be, you know, in front of customers together. And, you know, they decided they see enough here, they heard enough about us. I think we were getting close to maybe about $100 million in revenue or bookings. I forget exactly what it was, maybe revenue. And they came in and in a very short 30, 40-day window, came in, did their due diligence, and bought us for, I think, $635 million cash at the time. And everyone thought at that time, you know, it was a software company that EMC would pull into the big mothership. And basically what would happen in those days, you'd give away software to get the hardware business.

Right.

We'll say, you know, thanks to Diane and a number of, you know, us having influence, we got them to commit to leaving us alone, let us run as VMware, an EMC-owned company based in California and not back on the East Coast in the Northeast where there were a lot of hardware businesses, the DEC, the Wangs of the day. And they let us run our own business, which was really a blessing because if they didn't, I don't think VMware would exist to the company it is today. That being said, we got a lot of benefit from EMC ownership. They were a big company with deep relationships at some of the biggest, you know, companies and multinationals in the world. So we got access to the C-suite and we would introduce this new technology. And they were very helpful in helping us scale the business by getting us access to these accounts. Interestingly enough, our biggest partners was all of their biggest competitors, whether it was IBM, whether it was HP, whether it was NetApp in the day, you know, Fujitsu, Hitachi, you name it. Like, their big competitors were all our partners. And, you know, a hat tip to Joe Tucci and team for saying, hey, listen, I'm telling my folks at EMC they got to work hard to build a better relationship with VMware than than, you know, my competitors. And we ran a business that partnered with our, you know, parent company or our ownership, you know, in EMC, as well as all their competitors. And that was an interesting dynamic, an interesting operating model. We figured out how to make it work. It wasn't like it was easy, I'll tell you that.

You had to manage that. It was your responsibility.

We had to manage a lot of that, right? And, you know, I'd be getting calls for one deal with a VMware deal with 3 different partners, just really wanting to work with you. And we had to figure out the right operating model, the engagement model. It was super complex. Yet now looking back, and even at the time, it was just a lot of fun to figure out how to navigate that. And we were in hypergrowth mode. We were growing super fast for many years. And then in 2007, EMC saw us really starting to grow quickly and they didn't think that they were getting the valuation exposure for the VMware asset that they could as it just being a division with EMC. And they decided to put 15% of the shares into the public market where we took VMware public as an IPO. And we brought in a bunch of outside investors, including Cisco. Yet EMC remained our largest shareholder with about 85% ownership when we went public in 2007. So just another complicated operating model. And now this company's public with one shareholder that's the, you know, 85% owner with all the competition around you. Yeah, just interesting times. And you learn a tremendous amount about business, the complexity of operating You know, models, and we just went on a great tear and run from there.

Now, at the time of the EMC acquisition, startup company like that, I'm sure there was always talk of we're gonna go public and so forth. And then the EMC acquisition, was, was that a discussion at the time? Was the offer so good you couldn't refuse it? What was the dynamics of the discussion?

Yeah, you know, obviously always, you know, they always have a goal, or not always, but people want to go public in a expose the company and get shareholders interested. I don't know that we were necessarily thinking about it at that time. We were probably less than $100 million.

Mm-hmm.

But we also knew we had some really big competitors. Microsoft was at the time our biggest competitor. They made an acquisition of a company called Connectix, and we were a little VMware, and Microsoft didn't support us because we were the first piece of software underneath them on a server with this platform, and it pushed our operating system on top of VMware, so we didn't get any support from them, so they decided to compete with us. So I don't know if we were nervous, but we were aware that we had some pretty big companies to compete with and deal with, and having the assurance of a bigger backing of a company like EMC in those days made us say, you know, it's a rich offer. It was over 6x multiple. I know nowadays that doesn't sound like a lot, and now everyone says to me, man, you guys sold out so early. It could have been this. And I remind people, yeah, you don't know that, right? EMC gave us a tremendous— we talked about it— opportunity and gave us access to so many different companies and prospects that we wouldn't have done otherwise. I honestly, while I think we could have been wildly successful, I don't know if it would have been any more successful if we didn't do the acquisition with EMC.

So let's talk a little bit about the culture. Coming in, it's a very technical company. You probably had some pushing to do to get people to accept the need to invest on the sales and marketing and all the non-technical side of the world, people thinking, oh, it should sell itself, we don't need all this stuff, right?

Yeah. Doug, you're making me laugh. You're taking me way back here, I must admit. There was those exact conversations that you just said. I remember a conversation where someone said, hey, listen, software is only going to be sold on the web going forward and you will no longer need sales teams. You just point people to the website and the software is bought. And I remember saying, wow, that doesn't sound good for my career and what I was doing. So, there were those conversations. There was always fights around investment dollars. Where are we going to invest next? next? On the go-to-market side? Is it on the product side? So all of those typical conversations you would expect happened. At the same time, I think, to be honest, it was a very special culture. And up until the day I left, what differentiated that place from our peers and everyone else and allowed us to attract some of the industry's best talent is the culture and the values that we built there. And I would say my 14-year journey there, that was one of the biggest highlights. It's just the people. We cared about one another. We felt like truly we were a family. A lot of times people don't want to call your place of work your family, you know, because families, you sometimes can't get rid of people, and in a business you can. But we really treated people with a tremendous amount of respect. We worked hard, we had a lot of fun, and we were highly driven and motivated, right, to succeed, but always do it with the highest level of integrity. And it was just a very special place.

So you came in, you know, obviously from a personal point of view, family integrity and, you know, core values were important, and you found that in VMware. You didn't have to change it, you didn't have to Well, I think we built it.

When I joined, there was only a couple hundred people, right? And I left, there was 20,000. But we, I think all of the leadership, including myself, definitely myself, I leaned into who I am and the core values, you know, of mine. It's not always a fit for others, but in this case, it did work, it did align. And I think it was an impact on the company values and culture. And as we scaled this thing, If you go back and talk to people who spent those early days through up through almost mid-2015 to 2020, I mean, they will tell you the difference of VMware was the values and the culture that we had.

Okay, so let's go back to Diane Greene's transition. So she was there till around 2007 or '08. I understand, you read the reports, there was some Financial downturns or whatever. It was a difficult time in the economy overall. And she was asked to leave. Is that— what's your version of the story?

Yeah. So my version of the story is we went through a CEO transition, Doug, where I think the board and Diane made a decision to do a transition. And EMC, our, you know, owner, a majority owner in the board at the time, had someone that they thought could take over the business and take it to a new level from, you know, what Diane and her husband Mendel had done. They did an amazing job. We're all blessed to be even part of, you know, VMware because of what they did. But companies go through transitions.

Mm-hmm.

And there was a decision to make a transition, and we brought in a gentleman named Paul Maritz, Paul Moritz was at Microsoft for, I don't know how long, a long time. Basically third in command behind Gates and Ballmer and Moritz. Moritz built their data center business. He's the one who's the person, people called it Wintel, Windows and Intel, right? I think he was the Windows data center guy that built that business and he joined us as CEO. He was already working at EMC because he had left Microsoft and started a company, and EMC bought that company. So they had Paul as part of their executive staff, and when a decision was made to, you know, make the transition, they brought Paul in.

So how big was the company at the time, roughly?

Oh my Lord, 2000— I'd have to go back and look.

Hundreds of millions of dollars.

Yes, absolutely. Yeah, hundreds of millions of dollars. We went public in 2007, so, you know, it was a year or so after, right, we went public. So when we were growing nicely, it was a really solid business. And then, you know, the downturn happened. And even when the downturn happened, I will tell you, we were one of the few Probably less than you can count on one hand during 2008, 2009 crisis. We were one of the few companies that actually still grew during that time. We had such a powerful value proposition in a down market. Our value proposition only became that more, much more resilient and impactful because we just saved people a lot of money by doing consolidation of their server footprint.

I presume EMC took a big hit during that period.

They did indeed. I think everyone did, you know, but they still had VMware and they did consolidated reporting, meaning, you know, our financials rolled into EMC because they were an 85% shareholder. So they did consolidated reporting. So it got the benefit of us even in that down market.

So how was the transition for you personally going with a new CEO, Diane I guess both of them are pretty technical. I don't know what Paul's background exactly is.

Super technical, both of them. It went really well. You know, listen, Paul, you know, Diane and I had a great working relationship. You know, Paul came in, he's very technical. I think if you asked Paul, he'd say he's an introvert. He'd rather stay in his office and just, you know, be to himself and, you know, be a think tank because he is very smart strategically, one of the most strategic technical thinkers I've ever seen. And we had a great relationship. He said, you go run the business, you put the numbers on the board, you help us continue to maintain this culture, and we'll have a great partnership. And it was an amazing partnership. I have a tremendous amount of respect for Paul. I miss him dearly. He is a good human being.

So what, did your responsibilities change as a result of that transition? Did he give you—

Yeah, I picked up more under Paul. Definitely, I picked up more responsibility. I moved into a co-president role, still owning a lot of the same functions that I had. For a while, I picked up human resources and responsibility for the people. So yeah, it definitely continued to grow. While I was there, I just kept picking up more responsibility and into the co-president role throughout, you know, the time Paul was there, and then the transition came to our next CEO.

Yeah, so Pat Moser came in in 2012.

Yeah, and then Pat, so interesting, you know, after 3 or 4 years with Paul, you know, the board, you know, I remember getting the call saying, Carl, I hate to tell you, we're gonna do this again. We're gonna transition to another CEO, a 3rd CEO. And I'm like, okay, who is it? I knew Pat. Pat was a former CTO of Intel, and he too then got hired by EMC and was working at EMC. So EMC, yeah. So EMC said, hey, we have another CEO for you to work with and partner with.

Here are all these extra people that we need to deal with.

Yeah. I felt like, okay, great, let's do this again. Like, you know, my role was pretty consistent the whole time. Pat came in, super technical guy, very brilliant, very smart. And then I got to partner with Pat from 2012 when he joined. all the way to, you know, 2016. And he was a great partner too, really technical. Again, very similar operating model on the technology front. He would focus on it and I'd focus on the business side. And during that time, I picked up some additional responsibilities. You know, I became president and COO of the company. I acted as a CFO of the company for 3 quarters. Our CFO had decided to leave VMware, and when he did, that's a huge responsibility. Yeah, so I would tell people it was it was probably the most challenging and stressful three quarters of my life, my career, but the most rewarding as well. And and I learned just a tremendous amount having to you know make make make the numbers, yeah, and then had to report my own numbers when you're a fifty. $55 billion market cap company and never have done one of the jobs before, and in the midst of a CEO transition, keeping it all together, and, and, and. It was pretty amazing. And it just taught me a tremendous amount about resiliency, the importance of having great teams around you to help you through those, you know, challenging times. And also just taught me never underestimate the potential of a human when their backs are against the wall, if they're a fighter.

So at the time you took over CFO, were you managing the finance operation?

It was an interim role because I never took— because we were searching for a CFO, but we were in the middle of a CEO transition and it was hard to recruit a CFO, right? They all liked me and now I'm president and COO, but the CFO wasn't going to report to me. They're like, we got to wait till Pat gets in here and we got to meet him and So in the meantime, I went to Joe Tucci and the board and said, what are we going to do in the meantime? And they said, well, you're what we're going to do in the meantime until we land a CFO. So I was out recruiting a CFO, finally did get someone to accept the role, but he couldn't start for a couple quarters because he was in transition. So I just decided to do it myself. Pat decided, okay, you're going to do it. Until our new CFO started, you know, 3 quarters later. And then, you know, he came in and did a fantastic job for us.

Yeah, that's a uniquely tough job in a public company.

Yes.

Managing all the other operations.

No doubt, Doug. I tell people it was an incredible, you know, 3 quarters of a year. And I'm super proud to say the stock never went down, but it never went up. I kept it flat for those 3 quarters.

Count that as a victory.

Yes, it was a huge victory, but it did teach me a lot about finance and the importance of finance. And in my new role now that I have today, I think that was just a great learning ground for me and what my career looks like after that.

So were you the public-facing— public company got a lot of Analyst interfaces and other things to do. Had you done that before?

Yeah, I was doing all the earnings calls and doing all the investor conferences.

Before you took on this position, or was that—

Yeah, yeah, I was even as— yes, I was.

That wasn't left to the CEO? You were—

No, no, I was, I was, you know, I was there, you know, lots of CEO transitions. I was the common thread through them all. So I did have a lot of public, you know, public interface experience with the buy side, the sell side, our customers, our partners, our conferences around the world. So yeah, I did have a lot of those responsibilities already. But doing it as a CFO is one more level up.

So was engineering reporting to you?

No, I never had engineering. Just the operations and go-to-market. You know, in the end, I had, you know, I did have marketing, I had, you know, M&A, I had corporate development. So I had a lot of the operational functions of the company, but I never was responsible for engineering and products.

So that was actually one of the things I wanted to ask about, as I went down the list of all the companies that you acquired during the time in which you were COO or Tell me about that. Did you develop a formula? Did you have a philosophy? Did you, you know, how did you— how successful were the acquisitions in general? Where did you make a big mistake? Where did you have a great result? Tell me a little bit about your experiences.

Yeah, no, I think we had a good playbook for M&A. We did quite a bit of M&A, some very successful, some not so successful. successful. But, you know, we did have a formula. It did start with culture. We always talked about since we had an amazing culture, we wanted to make sure we're bringing people in that fit our culture.

Mmhmm.

And if we thought they didn't fit our culture, that would give us, you know, reason for pause. Or if we thought that they wanted to come in and change our culture because their culture was that much stronger, we always would have to remind them, we're buying you, you're part of us Not that we can't learn from you, but we didn't want to change the culture, number one. Number two, we focused on whether or not the technology could be easily integrated into what we already had at VMware and how adjacent was it to what VMware had to offer and would it provide a 1 1 3 equation for our customers. And then last, we always focused on could we fit it into our distribution strategy. Mm-hmm. To this day, it's one of the more powerful sales machines that I've ever been part of. And I'm not just saying that because I was there from the early days to start it and see where it went, but we really had a good formula in bringing companies in, fitting it into our distribution strategy and model, and having customers very quickly buy those products, absorb them, and deploy them. That's how we looked at it. Some of them were very successful. One of the most successful ones I remember was a company called Nicira, which was a network virtualization company similar to what we did for compute. It was on the network side. So it broke the bond between the software and underlying switch fabric through virtualization. And we bought that company. We paid, I think it was $1.3 or $1.4 billion at the time for a company that had, you know, $5 million in revenues. Talk about high multiples.

Mm-hmm.

But we knew it was a strategic asset. Some of our, you know, competitors, some of our peers, some of our, you know, friends were also vying after this product. And we happened to get it and we brought it in. And within a few years, it's a half a billion dollar business. just ripping because we were able to put it into our channel, into our customers, and now we could go speak to them about, you know, what we called at the time, we created this nomenclature, the current CEO, Ray Gu, created this nomenclature called the software-defined data center, which was virtualizing network compute and storage. We had storage virtualization, we had compute, we didn't have networks, so this kind of rounded us out and really gave us— a tremendous uptick into the market, and off we went. And then there was other acquisitions that we made that were probably more associated with what we called our end-user computing business, which is really desktop virtualization. We bought a bunch of different applications thinking we could have more impact on the desktop by buying applications. And I would say some of them didn't play out nearly like we want, and we'd have to end up selling them and spinning them off.

So there was— Is that because it wasn't a fit? They didn't Deliver what you expected, or?

I think it's more of a product fit and a market fit. You know, our belief that customers would want to start to buy not infrastructure from us but applications to service their desktops probably didn't play out like we had expected it. Yeah, so we had a lot of success with M&A. Absolutely.

Yeah, so was one of the Did you ever buy a company to replace or supplant technology that you had internally that wasn't working out or whatever and move to— and for that or other reasons, were there significant layoffs associated with these or were they always sort of add to the party and let's grow together?

Yeah, I can't remember. I mean, it was such a powerful technology company. I actually can't— now you ask that question, Doug, I can't think of Anything we acquired to replace something that we had or was not doing well in the market? I don't recall ever doing that. Everything was additive. It was finding additional areas of growth outside of our organic growth business. Yeah, everything was very additive. I could be wrong. I forget all the acquisitions we did, but I think most things were additive.

And were there other— as part of the formula, was it sort of you found that it was important to do physical integration, get them moved into your own facilities, get them nearby? Or what were some of the key checkpoints? You said we got to do A, B, and C in order to make virtually anything successful.

Yeah, so there was a couple things, right? Number one, we would make them feel like they were part part of VMware. We wouldn't always make them immediately move out of their physical offices into ours. We'd go to their offices, we'd welcome them, we'd spend time with them. We would always try to figure out, technically speaking, where they would report into on the engineering side, because we always had to do a lot of integration. And I think the teams did a great job there. And then on the go-to-market side, if it was a tight adjacency, to what we were already selling, we would fold their sales teams in immediately. If it wasn't, we would keep them as an overlay sales team, as specialists that our core reps would leverage. And then the last thing I'd say is we had a really good way of introducing them into our channel. VMware built an amazing channel, and that channel sold a hell of a lot of our products, you know, Upwards of 80% of our products were being bought through channels. So we had to come up with—

Were these independent reps or other—

No, these are value-added resellers and distributors. We had a 2-tier distribution model where we had the distributors who would aggregate hundreds, if not thousands, of resellers that we would have to train on our products. So we would then take all these M&A products and get them into our channel quickly. So that was a formula for success. And then, you know, we'd always just think about culturally how to get them, you know, part of the VMware culture very quickly. I mean, we had a really good formula and it worked well.

Did— was one of the— did you ever acquire a company where there was significant disagreement internally and it was a, okay, we're going to do this, so let's agree to disagree, but go ahead? Or was sort of general buy-in a critical piece of making it a success?

Oh man, I think for the most part there wasn't always agreement. And the disagreements a lot of times came between the product leaders and the go-to-market leaders, because if we were to do these acquisitions, you'd have to build a financial framework That says, if we're going to pay X, we're going to generate Y. And on the go-to-market side, they're always like, well, I don't know if we can do that. The product team would say, hey, this is a cloud adjacency. There's a large addressable market. We will be able to. So there was always this healthy tension when making a decision on a company between engineering and go-to-market. But once we aligned, we didn't always agree, but once we aligned, we put our heads down and we just went and made it happen. I never saw people behind the scenes disagreeing and creating any issues. It just wouldn't be allowed in the culture we'd established. So we were, I think we were pretty damn good, quite frankly, thinking about it, right, at getting aligned around all of our acquisitions and figuring out how to make them successful.

So Pat Gelsinger came in, had Strong background, true blue blood in Intel, short time at EMC, I presume.

Yeah.

Very hardware-oriented. Was that a bigger transition? I mean, he's a very bright guy, he could adapt. I mean, what was the learning curve on that side?

Well, no, I think it was pretty straightforward. Pat's a brilliant guy. While he was an infrastructure person for 30-plus years, probably at that point in his career, he knew that the infrastructure and the hardware was there to support very powerful software, especially VMware. He knew VMware well. I remember working with Pat when he was CTO at Intel, and we really partnered closely with them. So it wasn't— it was a pretty easy transition. He understood software. He understood we didn't have any physical There were no atoms in our building. It was all software. So it was— and Pat was smart enough to recognize it. I think the harder part probably was how do we operate with some of our strategic partners like a Dell, like an EMC, who at times, because of the power of the VMware platform, would cause them to sell less hardware into the market.

Right. Oh yeah.

Right? So that was probably more of the challenges we always had to overcome, right? Some of our biggest partners, you know, are people that would sell less hardware if they worked with us. It was really an interesting dynamic. And the same thing with our parent company. When we started to do storage virtualization, we didn't need those big, you know, storage units and all those disks that used to exist. We didn't need them anymore. So I think that was more of the challenge. Not a challenge necessarily with Pat understanding our software industry or our software value proposition.

And he certainly fit well in the culture. I can tell the two of you must have bonded well from a personal point of view.

Yeah, it's so funny. We used to laugh, and when we'd travel around the world— he and I grew up about an hour apart from one another in Pennsylvania, so we used to tell everyone, you know, that the software virtualization capital of the world is in Pennsylvania where Carl and Pat came from. You know, we had fun for sure. I have a tremendous amount of respect for him and still talk to him quite often.

So what was your biggest challenge? And you were there 12, 14 years. What was the— did you ever think, I've got to get out of here, or this thing's all going to collapse? You know, what was the— What were the biggest challenges along the way?

Actually, no, I never thought I got to get out of here. I never thought this is too big. The biggest challenge probably for myself and the company, there were a couple years in the, you know, 2010 kind of time frame where no company had ever scaled as fast as we were. I used to tell people there was no troubleshooting guide. There was no user manual. There was no call your mentor to see how you can grow this fast and what to do next. The challenge was figuring it out and coming together with a collective set of smart people that we were able to recruit and collectively figuring it out. The hardest part was scale and the pace of scale because— There was no one, even going back to the Microsoft days, that grew as fast as we did. There's some numbers and statistics out there that maybe have been surpassed now, but fastest to $1 billion, $2 billion, like this company was just on a tear. So the challenge was how do we scale? How do we operationalize that scale? How do we go international? They were the challenges.

Mm-hmm.

I never woke up saying, man, I got to get out of here. This company is in trouble. I never felt that. If anything, every day I woke up, I believed in it that much more.

And the culture continued to evolve, and you— there was a major focus on keeping it and growing it and not letting that get distracted. So, and then Dell comes along.

Well, yeah, so Dell came along, or I should say VMware came along with EMC because Dell was buying EMC. And that was right when, you know, when I was looking to finally make a transition and start my next, you know, journey. They came in and were going to buy EMC. And with Dell buying EMC and EMC owning, so at the time, 80-plus percent of VMware, Guess what? Dell not only now owns EMC, but they were fortunate enough, and Michael and his partner at Silver Lake, Egon, came in and made one of the most strategic acquisitions maybe in history. And for $67 billion, and you get both EMC and VMware for that. It's pretty impressive what they did.

So it sounds like you had a very personal relationship with the CEO of Yeah. And you worked well with them.

Yeah, I had a great relationship with all the executives at EMC. I mean, we've been together a long time, from 2004 when they bought us, you know, all the way through, you know, the Dell acquisition.

So you were pretty— you were stable, you were there that whole time. Were the executives in EMC the same ones?

A lot of them were the same, yeah. It's interesting, they had a really strong culture. culture in the, you know, back east and northeast and Boston area. Like, their executives were around a very long time, absolutely, and great people. And to this day, some of my, you know, best friends are from EMC. Yeah.

So how did this come about? What— how were you informed? Were you consulted?

Were you told? I was I was obviously in the know just because of my role, not because of Carl, but as president and COO of VMware. And, you know, we're going to be bought by way of EMC being bought. So I was involved in a lot of conversations and the logic behind it. Yeah. So I definitely was involved and had a front row seat into everything. It was, again, another one of those learning experiences, no matter how much experience you have, you know, you go through those type of, you know, situations, you just learn that much more as well. So it was a great learning experience and being part of all of that, seeing how that works, seeing how the bankers got involved to fund such a, at the time, I think the biggest technology acquisition ever. Watch the operating model, make sure that VMware could remain that independent company. Now we don't just have one ownership and, you know, EMC, now Dell owns us and we're a software business and they're hardware and going through all of that almost again was crazy.

Well, they were a partner also, right?

Dell was one of our largest resellers in the world. So, you know, it was, you know, again, the complexity in that operating model was something that we had to work on and, you know, at times fight through almost every day.

So did you Did you actually sit down with Michael Dell? I mean, was he personally involved in all of this?

Yeah. Oh yeah.

Yes.

Michael's hands-on through the whole thing with his, you know, his big partner in this was Silver Lake, the private equity firm. So we, yeah, there was lots of meetings.

And were they, I know nothing about the Dell culture. Was this scary that you might be part of a very different kind of company?

No, I mean, I shouldn't say that. I think there was some nervousness. Maybe people, you know, think of VMware, you know, as a very innovative, very engineering-driven company focused on, you know, creating new markets. I think there was some fear that some type of an ownership structure by Dell, who comes into markets later and just has a better price and product, and not maybe thought of as the most innovative, right? Their innovation was in supply chain and other things. So I think there was probably some nervousness around it. Also some nervousness around, okay, now we're owned by Dell and our biggest partners in the world are HPs, right? I remember having conversations with Meg Whitman when this happened saying, oh my gosh, VMware, we own at the time, I don't know, they owned 50% 60% of the server market. We're one of their biggest software providers, and now their biggest competitor bought us. So we kind of went back to, I remember saying, man, I just went back 10 years now.

Yeah, didn't I have this problem before?

And didn't have this problem. And the amount of meetings we had to convince people that we will remain, VMware will remain independent and continue to work with all of our partners, both network, compute, and storage partners, we had to do it all over again. And for the most part, I think successfully did so.

And was Dell— how big of a part of EMC was VMware at the time, revenue-wise or whatever?

Oh my gosh. I'm guessing $5 or $6 billion of revenue at the time when—

Compared to— I mean, what percentage?

I don't remember.

Dell was buying EMC and, oh, by the way, they got VMware, or they were buying EMC because they wanted VMware? What was the—

You know, I think it's both. I mean, you get EMC and you get everything. Like, you buy one, you get two, right? It's like a special deal. And I do think it played a big part in their decision. And they got all, you know, EMC's, you know, today if you look at EMC, is a huge percentage of their business. Still, their storage business is doing great. And yeah, I think it was— but you get the VMware asset, which is, from a gross margin perspective, software business, as you know, Doug, compared to a hardware business, it's just that much more valuable.

So keeping VMware growing and solid and highly profitable was a—

In their best interest.

Was in their best interest. And so whatever it took to make that work, Yeah, absolutely. And so where were you in this? You were thinking of other opportunities before, after? How did that all happen?

No, in the midst of all of this, my twin girls were in 8th grade and my son was in 7th grade, and I was doing a lot of traveling at the time. I think I did over 200,000 air miles like 10 years in a row. on commercial airlines.

Really?

And my wife and I made a family decision that I was going to get off the road and be home to get my children through high school and college. And I made a decision that I was going to move on. I had a successor in place that I brought over from Europe to be able to take over a large portion of the business and breaking up the rest of my roles and direct reports. We had a plan and I I think, you know, I think it surprised probably, you know, Joe Tucci, Michael Dell, and Pat Gelsinger, but it was the right thing to do for myself and my family. And I think those high school years are formidable years, and I wanted to be there and be present and didn't know exactly what I was going to do. And, you know, I knew I wanted to work. I was 50 at the time. I was still driven, still motivated, still wanted to lead and inspire. and serve others and wasn't sure what I was gonna do. And I started having some conversations with Sequoia and some of my friends there who I had sat on some boards with. And they decided, hey, we'll take a chance, we'll bring an operator in. I don't think I was exactly the candidate they were recruiting for or looking at.

Yeah, you don't fit the mold, right?

I don't fit the mold. I'm not a pure technologist. You weren't from Stanford or whatever.

I wasn't an entrepreneur.

All of my partners were from Stanford or Harvard or MBAs or great colleges. And here I am with my 2-year certificate. And I said, listen, this is what I can bring. And let's be honest about this. Let's see if we can make it work. And I woke up and 6 or 7 years later, I was still at Sequoia, had an amazing run, worked with some of the smartest people in the world, learned the venture business. But the entire time, I was always focused on bringing my operating skills and background experience to young companies and really helping them think about how to grow and scale their business. And, you know, with my partners, made some unbelievable investments, sat on some of the most iconic company boards you could think of, from Palo Alto Networks to Zoom to Snowflake to UiPath. And it was an amazing journey that worked out well for Sequoia and myself over those years. I really enjoyed it. And I got my kids through high school and college, as I committed I would for my family.

Yeah. So what Was it hard for you to be on the board and not hands-on in these situations? Some people find it frustrating who spent their careers pulling the levers, and then you had to tell other people how they might want to pull the lever.

Yeah, no, I think probably there was some frustration at times. I'd be disingenuous if I said there wasn't, because you knew exactly the playbook to run. But at the same time, I was very respectful. I was respectful of the entrepreneurs and the founders. It's their company. We happen to be investors, and I happen to be an investor who sits on the board. You know, there was sometimes frustration when you sit around the board. There's a lot of venture capitalists around the table with you, a lot younger than me, who at times I'd be like, where do you have all this experience to be telling these people what to do and never operated anything. But for the most part, I figured out how to navigate that and use phrases like, that is a great idea, but maybe we should think about trying this. And it's up to you whether you do it or not, but let me just share with you what I think might work. So I think I earned the trust, the respect of every founder I worked with. Because I did at this time bring 30 years of experience to 2 companies and helped them recruit lots of executives, helped them build boards, was part of 7 IPOs, I think, during my years there. And hopefully I added value to both the partnership, who I'm still part of, obviously at a much less of a degree now, but added value to all those companies I got to So were you out drumming up business, looking for investments yourself?

And any, you know, what were some particularly notable wins and, uh, we'll let that one get away kind of, uh, happenings?

Yeah, no, I was, uh, you know, I went in there, as I tell people, I was probably the 2nd or 3rd oldest partner at Sequoia when I walked through the doors. Um, in 2016, yet the least experienced person in the building. And there was lots of 20 and 30 and 40-year-olds.

Mm-hmm.

And I had to come in, no ego, come in as an apprentice, learn the business. And I didn't treat myself any different than anyone else. I went out and drummed up business. I was kind of back, you know, 30 years in my sales career looking for opportunities, cold calling, prospecting, meeting with people. building a network. Now, I was blessed that I had been in the industry for 30 years, so I had a network and I could find out about opportunities. But I treated myself exactly the same as everyone else and went out and even if I didn't find the opportunity, a younger partner would find the opportunity. I would hope that I'd go out and help close and win business. I would help sell companies. We didn't need bankers because I've had relationships and could I sold multiple companies to Cisco, for example, that were great outcomes and no banker was needed because of my relationships with folks like Chuck and their CFO and all their leaders. So yeah, I was out there working hard.

Is there any particular one that in terms of an investment that you brought in that you were proud of, worked out best, whatever, or vice versa?

I think there was a— if I'm honest, there was a lot of them that that my partners and I brought in from Zoom when they had $100 million in revenue when we invested in them at $1 billion. We invested in a company called UiPath, which is now a $12 or $15 billion company that had $30 or $40 million in ARR out of Romania. We invested in Snowflake. very early on and helped build that business. Yeah, there was, I think when I left, I was on 12 boards, other companies where I was—

Yeah, I looked at the number of boards. I didn't know how many simultaneously.

Yeah, it was a lot of fun. It was a lot of work, but that's me too. I'm not just gonna sit around. I have a lot of energy. I'm very driven. And the older I get, I only wanna focus on giving back and sharing my experience with others and having impact on others. And I think in the role as a venture capitalist at an amazing partnership like Sequoia, you have the opportunity to do that, and hopefully I did.

So now you've transitioned to Workday. How did that come about?

Well, I sat on the Workday board for 5 years while I was at Sequoia. It wasn't a Sequoia Investment, but I happened to sit on the board. I've known Aneel and the company for 5 years. I also was sitting on the board of Palo Alto Networks, along with all the other investments then from boards that we made from Sequoia. And after 6 or 7 years at Sequoia, I always had this itch, and the itch never really went away to go back and do one more, do one more operating role and go back into a servant leadership opportunity.

Mm-hmm.

Once the children were through high school and almost done with college, I said to my wife, I bring it up all the time every year, and she's like, you've got to go do this. You want to do one more? I trust you. I respect you. And I know I'll be on the journey with you. And she gave me the approval, and I truly mean that. If she said, no, I don't want you to do this, I wouldn't do it. But I decided to do one more. And I felt like knowing Workday, knowing the values of the company, knowing the culture, knowing the co-founders, Aneel and Dave, knowing a lot of the executive team, knowing the market, felt like this was the right one. I looked at a few different opportunities, but I felt like this was the right one for me. To jump back in and, you know, do one more operating role. And here I am, almost a week— I'm sorry, almost a year exactly, and to the week we're sitting here, into the role.

Wow.

It's been a tremendous experience. It's exactly what I expected from the company and the values and the culture, and there's a lot more opportunity than I even anticipated as I stepped into it. And it's It's been a hell of a first year. A lot of work, a lot of fun, but I am looking back and reflecting one year from today in this conversation. I wouldn't ever give back the last year in my experience to be part of the Workday company culture and opportunity.

Do you still sit on some of these other boards, or what's your—

No, as you step into these, You know, public officer roles. I have had to transition out of all of my boards, public boards, which I had 6 or 7 of them, which is a lot. That's frowned upon even if you're not in an operating role.

Yeah, normally you stick around that long.

Yeah, our friends at ISS are not fans of that. I wasn't a, you know, I was, I think, public enemy number one with all my public boards because they're nervous, can you serve your capacity? That wasn't a problem for me. I was adding value, I believe, or the boards would have asked me to leave. That being said, I did have to give up, you know, all of my public boards. I stayed on one, and that is Palo Alto Networks. And so I'm on the board of Palo Alto Networks, and then I serve on one of our, you know, private company boards, you know, that Sequoia portfolio company called Grafana. So I have passed all those others over to my partners at Sequoia who are doing an amazing job, you know, now serving on the boards of the companies that I handed over.

Yeah. And you still have some entrepreneur— some role within Sequoia?

Yeah, I have what we call a venture partner role. Listen, if someone calls me, I like to help. I speak to a lot of the portfolio companies frequently. I go to their events. I speak at their events. Just was, you know, a couple weeks ago they had a big go-to-market event in San Francisco with all their portfolio companies where I got to be on, you know, a fireside chat stage with Doug Leone interviewing me. So I do that. And because Now, in my 37th year of my career, my network is pretty expansive. I can help them recruit or give feedback on candidates. So I stay as active as I can, but I have a pretty big responsibility also to serve at Workday. It's a big company, it's at scale, and we're doing well, but we have a lot of opportunity in front of us too.

So going just a few more points on Sequoia, was there one particular partner that you kind of gravitated towards who was a mentor to kind of get you into the— or was it a real team effort?

You know, Doug, it's an amazing partnership. You know, one person is as smart as the next there. You know, these people were all really smart, from the younger generation of partners to the people that were there.

Mm-hmm.

You know, like a Doug, you know, Leone or a Michael Moritz or Jim Goetz or Rudolph, who now runs it, to my partner Pat. I mean, I can go on and on. And, you know, Alfred Lin, like the people at Sequoia, as I said earlier, some of the smartest people I've ever worked with in my life. And, you know, I don't know if one I'd call my mentor. My mentor is my father, who's in heaven looking down on us even as we As we say here, he's who guides me and leads me even though he's not here. But I did have amazing partners at Sequoia.

So what is the— what are your goals for Workday? What, you know, as you look forward, you know, you CEO stepping into this new role. What is it, growth? Is it culture? Is it strategy? You know, what's the— what are your top priorities?

Yeah, well, you touched on a few of them. So Workday has an amazing value system. There's 6 key values that David and Aneel set out, right, to build the company upon 18 years ago, and those values can be seen and felt every single day at the company. Which leads to a great culture. I have the responsibility from this day forward to make sure that value system remains in place. Culture can change a little bit as you grow and scale and you do things slightly different, but I will never impact that value system that they established and feel like that's part of my responsibility as I serve this company going forward, number one. Number 2, I do have a growth mindset. Growth is fun. Growth means you're winning. Growth means you're taking market share. Growth means you're innovating in many different ways. So I do really focus on growth. At the same time, I think Workday is a unique company in that we can have growth and still expand operating margin and just hopefully run the company, right, with that mindset and find ways to expand our margin and drive more shareholder value. I'd say the other thing that's really important to me is making sure we don't lose the focus we have at Workday on our customers. Of our 6 core values, the first 2 are the most important, our employees and our customers. I am very customer-centric, I'm customer-focused, I spend a tremendous amount of time with our customers and our partners, so I will lean heavily into that. Because without either of them, we don't have a business. And at the end of the day, I hope I'm viewed as a very good servant leader who cares for the people and the business more than I care for myself. I want to be remembered for someone who seeks to give more than I get. And I often talk about how I focus on significance and impact others. No longer do I focus on success. And my final goal is whenever my day comes where I step away from Workday, I want to leave the company in a better place when I leave than when I joined.

Well, I think that's a great place to end.

Doug, thank you for your time and your interest in my amazing and blessed 37-year journey through technology. being able to serve alongside some of the greatest leaders of our generation. It's been interesting sitting here spending a couple hours with you. It's taken me back, I must admit, through memory lane, and I want to thank you for that. At the same time, I'm ready to keep going because I have a tremendous opportunity to serve Workday going forward and the opportunity that we have as a company. So I'm looking forward to what's ahead.

All right, thank you very much.

Thank you very much, Doug. Appreciate it.

Bye-bye.