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Focus on the 'hybrid cloud' is driving sales, VMware CEO Pat Gelsinger says

The "hybrid cloud" may make VMware a key competitor in the cloud computing space as domestic and foreign regulators crack down on data protection, VMware CEO Pat Gelsinger told CNBC on Friday.

Gelsinger told "Squawk Alley" that the public cloud has been a driving force of growth for VMware. Partnerships with competitors Amazon Web Services (AWS) and IBM allowed the cloud computing company to capitalize on its software programs, he said.

"But we're also seeing this area of the hybrid cloud. Boy, I have so many things that might be driven by local data requirements [and] the new GDPR regulations in Europe," he said. "Our strategy focuses on delivering that unique hybrid cloud, the best of both worlds, together."

Gelsinger said that a "hybrid cloud" blends the public and private worlds of the cloud in the face of government requirements, like Europe's newly tightened General Data Protection Regulation, or GDPR. The CEO said he sees the public-private balance as the future of the cloud.

"I published some work late last year ... that says [that in] 2030, we expect these private and public worlds to be 50-50," Gelsinger said, adding that the expanding internet of things will only add to local regulatory demands.

Gelsinger also said that NSX, VMware's new network virtualization product, could replace his company's core computing product in the future. NSX showed strong customer demand over the course of 2016, though Gelsinger said the product needs more customer exposure.

VMware's adjusted fourth-quarter earnings of $1.43 beat analyst estimates by 3 cents. The Dell subsidiary said it saw profits of $1.04 on a per-share basis, with revenue of $2.03 billion also exceeding the Street's expectations of $1.99 billion.

Up about 100 percent over the past year, VMware's stock was nearing two-year highs on Friday, up almost 5 percent at $88.35 a share.