Constructive. About the they spoke wall, drug trafficking, and the need to work together. On courtney collins, this is bloomberg. Im cory johnson, this is bloomberg technology. First up, text cloud and diction. How does the drive 1 trillion into the sector over the next five years. And we will break down citadels ceo, backup singer. And we will talk to the start of building a private space station start up building a private space station. Demand for Cloud Infrastructure is expected to grow dramatically. That connects the results of all the tech earnings this week. 1 trillion will be shifted into the eye injury i. T. Industry of the next five years. The executive dp of executive worldwide commercial business. I really think this is true, we are in a dramatic time in technology where all the big hardware slingers are losing their business of selling stuff to companies because the companies are looking to the cloud, but your company has made a dramatic turn right. You had 50 of revenues in the closet 15 of revenues in the Cloud Business go business . We are more excited with the momentum we are seeing with microsoft cloud. Fy 18, wetrack for posted 14 billion in this last announcement, and what we are seeing from aerospace to agriculture, Big Companies are putting their business on the microsoft cloud. , which ise 95 growth fantastic. Number two, what types of customers are you getting . In the last six months ago alone, we have announced contracts with owning boeing, mars, adobe, and others. The planet mars . Know, the candy. Enterprises around the world are benefiting from the cloud, and we see companies trying to reinvent themselves with client technology. They are choosing microsoft for that. How many of these are core microsoft customers that are moving business to the cloud because they are used to using microsoft for a lot of things . We are seeing growth from a. Ot of customers traditional microsoft customers that have come to trust our credibility over the next few imate decade, as though well as new customers who are investing in things like Artificial Intelligence to enhance their business. Olakes, theyre known for butter but they have a 13 billion Technology Business 30 billion Technology Business that is fueled by the microsoft cloud. For their it is long strong for a lot of reasons, but i do not think the dollars will shift. I think they will go to the cloud or disappear. Do you have the same notion in microsoft, that the i. T. Stem will not be moved to the cloud but companies will spend less because they go to the cloud . We used to think about Market Opportunity as total number of pcs and data servers on the planet, but now we look at opportunity relative to the total Addressable Market for i. T. Span. If you look at what is happening in digital transformation, Big Companies like boeing are betting their entire digital Aviation Business on the cloud, using moves to Microsoft Ai Technology so they can address airlines around the world on a bigger scale. This does not just translate to i. T. , this is new Business Growth coming from this. Lets say i have a big fortune 500 company that i am trying to figure out where to go with my Cloud Business. Microsoft . I go to at the end of the day, it is because of our scale, trust, and security we have built into the platform, and also our enterprise credibility and experience with working customers and the space. We know what it takes to partner with industries around the world. For example, the connected car space right now, we think there is a lot of opportunity and we are not taking the tact of building cars but we have major contracts with bmw, nissan, toyota, volvo, every auto manufacturer on the menu planet where we are powering their manufacturing. Doma ofe facing the having open systems that will allow customers to move out the second day cheap second they find a cheaper price, or having closed systems that work better because they had databases that are wedded to microsoft databases. Certainly going towards that specific api approach. What is your take on that . We think open is the right way to go. More than two thirds of the workloads we run our open so are opensource workloads. When it comes to enterprise, big businesses when they are betting the farm and thinking about how they transform, they want the trust that microsoft can provide them. Am business going to business going to be bigger than amazon, five years from now . Thats what we hope. Good luck with that. Up, we will be joined to discuss their companys latest earnings and behind the double digit growth. Were Live Streaming on twitter right now. Mbergtech is the handle. This is bloomberg. 8. 8 at vmware, but behind all this vmware ceos going to help us break it down. It is good to see you. When we look at this quarter, what is the longer trend that we can look back at over the last calendar year, and where is vmware on its transition to do more . It is always great to be with you and have a chance to chat with you. This is a great quarter. We have good performance across lines,our geos, product we exceeded our expectations. It was the perfect quarter in so many dimensions. We have been Building Momentum throughout the year with multiple raised quarters throughout the year, and we feel like our strategy has resonated well with customers, and they are getting increasingly confident with how we can enable this mobile cloud experience for ,hem and a multicloud world and be part of their digital future. It has been a good time for the company. The virtualization business changing . We were talking to microsoft about how their businesses embracing cloud and how many should companies are shifting to theeared workloads cloud. I wondered how your business is changing the face of this . We think about that most people are building new workloads in the cloud. It is less of a shifting workload to the cloud, and their workloads, a lot of and the environments, awares strategy is to be uniquely positioned across the two to enable customers and acrease flexibility, to have hybrid environments of customers do not need to change their application so they can harness the incredible power of the public cloud. Our partnerships with ibm and amazon have resonated in the marketplace. The growth of our network has been extremely well received in the coretplace, and product have done very well also. We are seeing it on both sides of the business. What is the Amazon Partnership . What we announced back in october with that vmware and amazon were coming together, the leader and public in public and leader in private cloud were coming together to have an offer of the full Vmware Software on the fully scalable amazon footprint. It brought the best of the two worlds together. We have been overwhelmingly ly responded to by the customers, so it really has brought the two leaders together. We are quite excited. It is not available yet. It will be in the middle of next year, but we are seeing customers increase their strategic commitment to vmware as a result of that announcement a couple of months ago. Thate of the speculations the way that Cloud Business is going to grow Going Forward is that you have different kinds of customers going to different vendors, and there will certainly be exceptions but big s p 500 companies that are used to doing a lot of business with microsoft are going to go there, and you will have the startups, the goobers and the airbnbs s and airbnbsr talking to ibm. How do you think that will play out from your standpoint . We think there will be a multicloud future. Not just different kinds of customers, but different workloads as well. If you want office three to 65 365 . You get back from microsoft. Maybe google and their Big Data Services will be the best. My iot factory will be on premise. Its a multicloud future. Vmwares strategy is to give the customers the networking and tools so customers can take it vantage of all them and have the best of clouds. Its like we gave the customers flexible the of their servers in the past, we will give complex ability and control of their Cloud Services in the future, and that strategy is resonating very well with customers. I that you had an eyebrow raised when you saw [indiscernible] which even on a generous protection of Revenue Growth, which was strong, would 10 times next years revenue. What do you make of that valuation on a company that is in your space . I was bit startled by the acquisition . As a company that is an important partner for us in many domains. It is mostly complementary to overall ifus, and everyone is saying this tech opportunity is moving beyond traditional i. T. , and tech is breaking out of tech and we are in the digital future, and every aspect of the business becomes a technology opportunity. We believe we are coming into a. Of accelerated growth a moment of accelerated growth overall. We are very uniquely positioned to benefit from it. But you have to think some of these Unicorn Companies are overvalued, and we might see one or two blowup in the next year. I think we win through a major adjustments went through a major adjustment in valuations last year. There have not been that many ipos, m a activity. There have been a steady stream of that but not crazy amounts of forward. It is not an overheated market. It was surprising that the valuation was paid for it. Vm has a positive track record. What has differentiated us in the m a market out of acquired companies is that we have extraordinary success rates of companies that we have brought in. We will continue to use that as part of our strategy. The prices are getting hired. Thanks for being on pat, we really appreciate it. This Network Equipment maker gave a weak outlook to its latest earnings report. Investors are focusing on close margin operating forecasts, but also product design. That has been going on since the start of the month, 1 billion 1 billion for juniper wiped out. , butey transfer service why payments . We will uncover some secret pain points to the business. This is bloomberg. This week, we sought to company make that sought to Companies Make big bets in the payment industries. At t is buying money gram. Amt is buying money gram. Do seabees companies coming together . I think part of it is because of this complexity of the payment infrastructure today. Ec airbnb reportedly you see airbnb reportedly spending 20 million to solve their payments problem where they have an using australian dollars and trying to stay in britain using british pound. Because we have an air raid that can approach 10 . Of the world is why can value not move the way thatmation move today moves today . We can stream information from mars, but i cannot get money to london in three or four days. Get 10,000way to to london would be to buy a ticket to london and fly it there. When we see this notion, they are looking to offer a beachhead into the u. S. For payments in banking. As brett pointed out, payments are such a pain point for Global Commerce and ecommerce. Ecommerce is all about not using cash, so the pain points include majestics logistics, this we moving products physically moving products from a to b. And then the payments. Groupsee the alibaba buying money gram, and it is official makes sense, seeing that jack wants to get started in the u. S. Goods toto sell u. S. China, but they do not have a payment platform to do that. They in china, but does not exist in the u. S. The flow ofping goods from u. S. To china, so that is one of the reasons you want to do this purchase. Notm surprised we have seen google, facebook, amazon look at the Banking Sector or payment sector in any serious way. I read a study recently that suggested people are willing to look at those companies if they were to offer a service and they happened. Why do you think . There was a study done that says one out of three Global Consumers would switch their Financial Institution to one of the big three if they offered it. And i agree what tim said. And financials acquisition was almost 1 billion to yet ant financials a question was almost 1 billion to come into this eighth. Bank competitors are not other banks, they are these other Companies Like facebook, apple, and amazon. Tnd what we are seeing with an financials acquisition is the first shot across the bow. The banks are trying to offer Better Services to they can compete on a level Playing Field. So the transactions would stay the same or they would move to the new technologies, or like the Cloud Businesses, the value would be the same but the money being spent would be less . There is no doubt that the cost and friction will come down to radically over the next 10 years. Overn have dramatically the next 10 years. At the end of the day, the banks will continue to be at the center of this. Some, for example, the Bitcoin Community have argued down with the banks, down with the government. Yeah, they want to replace jv sack jpmorgan and goldman sachs. Currency is not going away. Ripple takes the point of view of how can we enable banks to compete on the level Playing Field by selling them the same technologies that bitcoin is built upon, so they can have realtime reconciliation and an air rate. Vmware is talking about reliability on a very high level. Global infrastructure has 1 9 of reliability. 90 of the coin trays are happening in china. Thinking about that too and want to get a piece of that . Basically, they already had so much in the area of financial services. The fact that alibaba tried to make them into a separate Company Shows it is more than alley pay alipay. I do not think that will get selected to get so much into bitcoin itself. They already have an infrastructure in place, but as you point out so much of the transaction volume does go through china or is from Chinese Business in and out of the country. So the users in china are willing to adapt to these kinds of Transactional Services that are purely mobile. There is no physical bank to deal with and they dont mind. Tim, thank you very much. Coming up, what is up with the bromance between President Trump and elon musk . Is that why tesla shares have been rising . This is bloomberg. Courtney i am courtney collins, and you are watching bloomberg technology. Donald trump and theresa may have kicked off a new era in u. S. U. K. Relations. They held a joint News Conference at the white house today and stressed the importance of good relations between the two countries. Trump governments must be responsive to every day working people, must represent their own citizens. , we lookime minister forward to working closely with we strengthen our mutual ties in commerce, business, and foreign affairs. Courtney theresa may is the first foreign leader to meet officially with trump since the inauguration. Acceptedrmed trump has an invitation to Queen Elizabeths birthday dinner. Turningmay faces a aint Angela Merkel faces turning point in the development of the european union. She says the need to Stay Together is all the more important and that france and germany are bound by their response to extremism. Can help keepins track of potential criminals. Belgian, france, and the netherlands are introducing passport checks on euro star and your rail services. Trump is considering lifting sanctions against russia, according to kellyanne conway. She also said if Vladimir Putin and wants to join forces against isis, the administration is listening. Russia says the next round of syrian peace talks in geneva would be postponed until february. The u. N. Mediated talks in switzerland had been scheduled for february 8. Rebels fighting to remove Bashar Alassad declined an invitation to meet in moscow. Concluded a successful visit to egypt, the first by the groups leader in more than three years, according to egypt plus egypt plus staterun news agency. Israelsussed blockade, palestinian reconciliation, and lingering power outages. Global news 24 hours a day powered by more than 2600 morealists and analysts in than 120 countries. I am courtney collins. This is bloomberg. Cory this is bloomberg technology. I am cory johnson. Mark zuckerberg has come out against Donald Trumps orders on immigration. He wrote trump signed an executive order friday that aims to deny federal friends federal funds to socalled sanctuary cities. This includes trumps own new york city. There are some 11 million undocumented immigrants in the United States. We will stay with the trump sector. This week, Bloomberg News reported that ibm is touting a big hiring boom, but firing thousands of workers at the same time. Stories we of the are focused on this week. 25,000 jobs, they are touting , and yet they just so happen to be doing multiple rounds of layoffs of potentially thousands of people. They just did their third round in late november, we reported, so it sort of shows that a lot of this is all for appearance, political theater, and the actual job numbers are not so clear. Company has had 19 quarters in a row of declining revenues. Things are not looking so positive in terms of revenue, profit, and income. They are focusing on all of these new area